Greater Fremont Development Council. Suitability of Available Real Estate for Target Industries. Executive Summary

Transcription

1 Greater Fremnt Develpment Cuncil Suitability f Available Real Estate fr Target Industries Executive Summary June 22, 2016

2 Greater Fremnt Develpment Cuncil Suitability f Real Estate fr Target Industries Executive Summary The purpse f this analysis is t evaluate available sites and buildings in the City f Fremnt, NE r nearby in terms f suitability fr meeting the real estate needs f prspect cmpanies in Fremnt s identified target industries. Fremnt s targets were identified in the reprt Greater Fremnt Develpment Cuncil Target Industry Analysis 2015 prepared by Redevelpment Resurces f Madisn, WI. As a result f this detailed analysis, GFDC identified the fllwing three primary target sectrs: Other Animal Fd Manufacturing Fats and Oils Refining and Blending Plastic, Wd and Metal Manufacturing While Fremnt may have identified nly three target sectrs, each f these three is very cmplex with a wide range f pssible business types. This significantly increases the ptential number f prspects frm the target sectrs frm which Fremnt may expect inquires. It shuld als be nted that the Other Animal Fd Manufacturing sectr excludes fd fr dgs and cats, which is a rapidly expanding sectr with an emphasis n nutritin and health, and shuld be included as a target fr Fremnt. Research n typical facility sizes in GFDC s target sectrs was cnducted frm a range f surces including: The U.S. Census Bureau s 2012 Ecnmic Census (the mst recent available) GFDC prspect data Infrmatin n large prject annuncements in 2013 and 2014 btained frm Cnway Data Infrmatin btained frm ecnmic develpment allies including the Greater Omaha Ecnmic Develpment Partnership; Nebraska Department f Ecnmic Develpment; BNSF Railrad; and Unin Pacific Railrad Interviews with Fremnt cmpanies in GFDC s target sectrs Other surces including extensive website review and telephne interviews with a wide variety f assciatins related t GFDC s target sectrs. Detailed results f this research are presented in the bdy f this reprt and summarized as fllws: The vast majrity f prspects are lking fr an existing building rather than a site fr cnstructin. The mst cmmn size ranges fr current GFDC prspects is 20,000 square feet r larger fr buildings and 20 acres r mre fr sites. While Fremnt receives a healthy level f prspect inquiries f a brad range f sizes, the small inventry f available buildings in the size ranges sught by prspects is limiting success. There

3 Greater Fremnt Develpment Cuncil June 22, 2016 Suitability f Real Estate fr Target Industries Page 2 is smewhat greater pprtunity fr prviding suitably sized sites, but subdivisin f larger parcels will be required. There is a lack f available sites fr larger land needs. While rail-served sites are nt a requirement f a majrity f prspects, it is still a sizeable number, and the whle Greater Omaha regin has an inadequate inventry f rail-served sites. Based n natinal data abut larger prjects (150,000 square feet r mre) frm 2013 and 2014, it appears that mst f the prjects in Fremnt s target industry sectrs will be smaller in size less than 150,000 square feet. Fremnt s current inventry f available sites includes several f suitable size t meet this size need; in fact, mst will likely require subdivisin t create smaller sites. The majrity f prspects seen by GFDC s ecnmic develpment allies are lking fr an existing building, with 50,000 square feet a cmmn size althugh there is a fair amunt f interest in larger buildings. Typical site sizes range frm 5 t 30 acres. Prjects requiring rail service a relatively strng demand tend t be tward the larger end f the size spectrum, but the Greater Omaha regin is very limited in rail-served sites. Of the three target industry sectrs identified by GFDC, the plastic, wd and metal manufacturing sectr is the mst active in the Greater Omaha regin. The fats and ils refining and blending sectr is the smallest in the Omaha regin, with very little annual prspect activity. The Greater Omaha regin has a limited supply f available buildings suitable t meet mdern prductin needs and very few shvel-ready sites; the regin is cnsidered risk-averse when it cmes t speculative real estate develpment. Eleven Fremnt cmpanies in the target sectrs were interviewed, with the fllwing key findings: The facilities f cmpanies interviewed in Fremnt s target sectrs are f substantial size with sectr averages f 92, ,000 square feet. It shuld be nted that many f these sizes reflect ne r mre expansins f the riginal buildings ver time. Fur f the cmpanies have current expansin plans r pssible needs. Expansins wuld add 100, ,000 square feet in ttal. Mst cmpany representatives were unsure f the size f the lt they were n. Several were quite large with ne at 87 acres. In several instances, this reflects the need fr substantial utdr strage r prcessing that des nt require a building. Therefre, the size f purchased land is nt just a functin f building size (nw r planned fr the future). Mst facilities require a clear height f at least 16 feet with many in the 20 t 30 ft range. Utility needs were fairly standard with n cmpany reprting difficulties in Fremnt.

4 Greater Fremnt Develpment Cuncil June 22, 2016 Suitability f Real Estate fr Target Industries Page 3 Fur f the 11 cmpanies interviewed are n rail-served sites. This suggests that the availability f additinal rail served sites in Fremnt wuld be a cmpetitive advantage. There were n particularly critical special building features althugh the sheer size f many f the facilities required a higher number f lading dcks than might be nrmal. Several cmpanies nted prblems frm a lcatin in Fremnt s fldplain r site drainage issues. Fremnt s levee prject will be an imprtant imprvement. Seven f the 11 cmpanies reprted a preference fr wning rather than leasing their building. If cmpanies were lking fr a new lcatin, there was a slight preference fr finding an existing building rather than a site fr cnstructin, althugh three cmpanies culd nt answer this questin because it wuld be a decisin made at a higher crprate level. These factrs underscre the imprtance f having an adequate inventry f vacant and available buildings, cupled with ready-t-g sites fr cnstructin. Average emplyment in Fremnt ranged frm 45 t 128 depending n the industry sectr, and ttaled nearly 1,000. Nearly every cmpany reprted sme level f difficulty in finding suitable new wrkers when they are needed. This is a factr that may discurage ther cmpanies frm lking at Fremnt because dialg with industry peers is a cmmn way fr cmpanies t cnduct research during a site search. These research results were used t develp estimates f minimum building and lt sizes that wuld likely typify future target sectr prspect demands; these calculatins are summarized as fllws: Based n natinal averages, the mst likely minimum sizes f new facilities in Fremnt s target sectrs are: Animal fd manufacturing 10,000 square feet Fats & ils refining and blending 36,500 square feet Plastic, wd & metal manufacturing 13,000 t 35,000 square feet depending n subsectr It is likely many prspect needs will exceed these minimums, smetimes by a substantial amunt. This becmes apparent when these sizes are cmpared with thse f target sectr peratins already in Fremnt as discussed in this analysis. When factring in Fremnt s maximum lt cverage regulatins and typical land purchase t allw future expansin, these minimum facility sizes translate int minimum lt sizes f: Animal fd manufacturing ¾ t 1 acre Fats & ils refining and blending acres Plastic, wd & metal manufacturing 1 t 3 acres depending n subsectr

5 Greater Fremnt Develpment Cuncil June 22, 2016 Suitability f Real Estate fr Target Industries Page 4 Again, these are minimum sizes with many prjects requiring substantially larger lts; this is cnsistent with GFDC s experience with a mst cmmn size range fr current prspects at 20,000 square feet r larger fr buildings and 20 acres r mre fr sites. The minimum lt sizes fr different building sizes reflect maximum cverage ratis allwed in Fremnt s industrial districts and the assumptin that enugh land wuld be acquired t allw a future dubling f the building size are as fllws: Building Size (SF) Minimum Lt Sizes t Accmmdate Building Sizes Minimum Lt Size at Maximum 60% Lt Cverage (BP District) Minimum Lt Size at Maximum 70% Lt Cverage (LI and GI Districts) 20, , , , , , , , , , , Sme new facilities wuld require even larger sites t allw fr substantial utdr strage and/r prcessing, the ability t install a rail spur, r taking advantage f Fremnt s cmpetitive land pricing when cmpared with ther lcatins. On March 9, 2016, the prject cnsultant was given a tur f 11 sites and 5 buildings cnsidered ptentially suitable (largely based n size) t meet the space needs f cmpanies in GFDC s target sectrs. This judgment was made based n a preliminary understanding f what thse space needs are, and was subject t refinement. Subsequently, ne f the buildings was remved frm cnsideratin because it had been cmmitted t the Hbby Lbby prject (but had already been judged unsuitable fr target industry manufacturing r distributin uses due t the cmmercial nature and lcatin f the building). The cnsultant and GFDC then cnducted substantially mre research n the prperties under cnsideratin. Primary findings are: There are nly three buildings f adequate size and ther characteristics t meet target sectr prspect needs in the Fremnt area, and tw f these are in Nrth Bend, a cnsiderable distance frm an Interstate-quality highway. This lack f available buildings is a significant cmpetitive disadvantage fr Fremnt in recruiting new manufacturing r distributin peratins t the area.

6 Greater Fremnt Develpment Cuncil June 22, 2016 Suitability f Real Estate fr Target Industries Page 5 While the inventry f sites inspected included 11 prperties ttaling 950 acres, this verstates the site availability fr typical prductin r distributin facilities in GFDC s target sectrs because several f the prperties are unsuitable fr industrial use due particularly t zning and/r surrunding neighbrhds. Only the fllwing are cnsidered primary sites fr target industry facilities: Site Acres Hills Farms Fremnt Business Park 80 Brad Street Farms Nrth Industrial Site Mrningside Nrth Business Park 45.56* Nrth Industrial Site 2 29 Ttal Acreage *Mrningside Nrth Business Park can be expanded by acres by adding land nrth f the existing Park, bringing the ttal shwn in Table 11 t acres. While this may appear t be a substantial inventry, many f these sites currently have limitatins such as the lack f full utilities, the need fr rezning, unknwn develpment csts (particularly fr thse that might take a rail spur and t prvide adequate utilities), lcatin in a fldplain, r ther site specific factrs. If the Hills Farms site is cmmitted t the prject currently cnsidering it, Fremnt s inventry f land suitable fr prjects in its target sectrs will be reduced t just ver acres (depending n whether the Mrningside Nrth Business Park is expanded) which, depending n the sizes f actual prjects, culd be depleted in a relatively shrt time. Given that it typically takes tw t three years t btain cntrl f land, master-plan it, and install necessary infrastructure s that it is ready fr develpment, Fremnt shuld start planning fr expanding its inventry very sn. This reprt cncludes with a number f primary cnclusins and recmmendatins, summarized as fllws (the sectin n Cnclusins and Recmmendatins prvides additinal details). 1. The Fremnt area has an extremely limited inventry f available buildings and ready-t-g sites fr industrial use (manufacturing and/r distributin). Availability f gd quality buildings is particularly limited, which is a cmpetitive disadvantage when the vast majrity f prspect cmpanies are lking fr an existing building. 2. GFDC shuld cnsider develpment f ne r mre speculative buildings t imprve its inventry f available buildings. Given the risk-averse character f the entire Omaha regin with regard t speculative develpment, this will require a mre detailed market analysis and/r develpment prspectus than is cntained in this reprt t determine the ideal size f the building t be develped and the underlying site size.

7 Greater Fremnt Develpment Cuncil June 22, 2016 Suitability f Real Estate fr Target Industries Page 6 3. While GFDC shws an inventry f 950 acres in larger sites (25 acres r larger) fr prspect cmpanies, the City s effective inventry fr target sectr cmpanies is 723 acres. If Prject Rawhide uses all f the Hills Farm site as is currently being cnsidered, this wuld reduce the inventry t nly acres depending n whether the Mrningside Nrth Business Park is expanded. While this may appear t be a substantial number if nly small prjects ccur in Fremnt, the supply can rapidly dwindle if larger prjects cme t Fremnt. GFDC shuld start t identify and plan the next generatin f sites nw. 4. GFDC shuld begin active planning nw t expand the Mrningside Nrth Business Park by cmbining it with the adjacent acres that is shwn fr Industrial purpses in the newly adpted Future Land Use Map. 5. Where pssible, new land develpment shuld be master-planned and develped t meet the Greater Omaha Ecnmic Develpment Partnership s GO Ready site certificatin standards. A new park f 150 t 200 acres shuld be develped. 6. Typical initial prjects undertaken by target sectr cmpanies will be buildings in the 30,000 45,000 square ft range. Site requirements will be larger than initial building size wuld require, allwing fr significant future expansin, utdr strage and/r prcessing, installatin f rail spurs, r ther factrs. Typical site requirements wuld be in the acre range. 7. Given Fremnt s cmpetitive land pricing, it is likely that sme cmpanies will be interested in acquiring larger sites than the acre size range shwn in the prir item. Hwever, unless Fremnt s inventry f available sites is increased, care must be taken t nt reduce the inventry by landbanking. GFDC shuld cnsider establishing guidelines that articulate certain minimum levels f develpment ver a specified timeframe t discurage depletin f its inventry. 8. GFDC shuld undertake an analysis f the cmplexity and csts f prviding full utilities t thse sites currently lacking them as well as any new sites added t the inventry. 9. Rail-served sites will prvide Fremnt with a cmpetitive advantage. GFDC shuld wrk with the tw majr railrads serving the area (BNSF and Unin Pacific) t evaluate the feasibility and apprximate cst f prviding rail service t key sites. 10. Future updating f the Cmprehensive Plan shuld specifically identify the availability f adequate real estate pprtunities as a critical aspect f Fremnt s cmpetitiveness. 11. All prperty listings available frm GFDC s website shuld be reviewed regularly fr accuracy. 12. Fremnt s Animal Fd manufacturing sectr shuld be enlarged t include fds fr dgs and cats.

8 Greater Fremnt Develpment Cuncil June 22, 2016 Suitability f Real Estate fr Target Industries Page 7 Building Name (Number is as shwn n Map 1 r 2) S. Unin Street E. 23 rd Street 4. TEK Services Fulfillment Space Table 1 Available Buildings in the Greater Fremnt Area Inspected During the March 9, 2016 Site Tur Size (Square Feet) Expandable? Clear Height (Feet) Available Buildings Site Size (Acres) 60,000 Yes plus 7 adja cent Current Zning Rail Service Utilities Available Suitable Telecm Services Other Ntes Industrial Adjacent W, S, E, G Yes UP rail adjacent. Metal building. Fr sale at $2,950,000 = $49.17/SF 24,330 N Cmmercial N W, S, E, G Yes Cmmercial building. Lease at $1.50/SF/year plus taxes 35,000+ N Industrial Yes W, S, E, G Yes Available fulfillment space at TEK Services. Metal building W 7th Street, Nrth Bend 65,250 In 2 Buildings Bldg 1 29,250 Ttal 21,625 Mfg 7,625 Office Bldg 2 Yes Eaves 20 Peak Industrial N W, S, E, G Yes Metal buildings 17± miles west f Fremnt. Lease at $2.50/SF/year 36,000 Wrhse Surce: GDFC website infrmatin analyzed by Garnet Cnsulting Services, Inc. Utility infrmatin prvided by the Fremnt Department f Utilities

9 Greater Fremnt Develpment Cuncil June 22, 2016 Suitability f Real Estate fr Target Industries Page 8 Table 2 Available Sites in the Greater Fremnt Area Inspected During the March 9, 2016 Site Tur Available Sites Site Name Site Size Utilities Suitable Telecm Subdividable? Expandable? Current Zning Rail Service (Number is as shwn n Map 1 r 2) (Acres) Available Services Other Ntes 1. Hills Farm (4 parcels) If existing rads are clsed Yes Minimum 50 acres N 3 parcels zned Industrial 1 zned Agriculture but applicatin pending fr rezning t Industrial Adjacent W, E N Bth BNSF & UP rail adjacent. Flat site. Irregular shape. Prpsed beltway and levee culd reduce site size slightly. $22,000/acre 2. Deer Pint Cmmercial Yes N Cmmercial N W, S, E, G N Flat site. Planned fr residential. Price negtiable 3. Excess Menards Land (13 parcels) 89 Already ac. N Cmmercial N W, S N Flat site. Retail area. Price negtiable 4. Fremnt Business Park 80 Yes Dwn t 1 ac. N Business Park N W, S, E, G Yes Flat site. Free t $100,000/acre depending n jb creatin and investment. 5. Brad Street Farms Yes Yes acres 6. Nrth Industrial Site N Yes acres Agriculture Adjacent S, E N BNSF rail adjacent. Flat site. Trapezidal shape. $11,000/acre Agriculture Adjacent S, E N BNSF rail adjacent. Flat site. Irregular shape. $17,283/acre Limited Industrial N W, S, E, G Yes Flat site. $19,300/acre Agriculture N W, S, E, G N Flat site. $21,667/acre 7. Mrningside Nrth Business Park Yes ac. Yes acres 8. Mrningside Suth Yes Yes 88 acres 9. Nrth Industrial Site 2 29 Yes N General Industrial Adjacent E Yes BNSF rail adjacent. Flat site. Trapezidal shape. $16,000/acre 10. Funtain Springs 27 Yes N High Density Residential N W, S, E, G Yes Flat site. Adjacent t medical cmplex. Planned fr 32 senir rental units. $100,000/acre 11. East 1 st Street N N Agriculture N S, E N Flat site. Triangular shape. $15,000/acre Surce: GDFC website infrmatin analyzed by Garnet Cnsulting Services, Inc. Utility infrmatin prvided by the Fremnt Department f Utilities

10 Greater Fremnt Develpment Cuncil June 22, 2016 Suitability f Real Estate fr Target Industries Page 9 Map 1 Prperties in Freemnt s Nrthern Sectin Surce: GFDC

11 Greater Fremnt Develpment Cuncil June 22, 2016 Suitability f Real Estate fr Target Industries Page 10 Map 2 Prperties in Freemnt s Suthern Sectin Surce: GFDC