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Connect Industrial: Supply Chain Chat

By Amy Sorter

An important part of the supply chain is moving products to their end user. This requires infrastructure, such as rail, and intermodal. Which was the reason for the “Rail Port and Intermodal Services: Moving Makers to Market” session at the recent Connect Industrial conference. During the session, panelists discussed everything from rail-served properties, to investor and developer incentives.

One main discussion focused on two Houston-area developments; the 15,000-square-foot Cedar Port Business Park, a rail-served development in Baytown, TX; and Generation Park, a 4,000-acre, mixed-use commercial development, which has logistical components. NAI Partners’ Holden Flushing (who markets Cedar Park Business Park) and John Flournoy, with Generation Park’s developer, McCord Development, allowed that each project has its advantages to tenants. While Cedar Port is undeniably a rail-served park (both Union Pacific and BNSF have a strong presence there), Generation Park is more focused on amenities. Basically, if a tenant requires a rail component, “they’ll look at us,” Flushing commented. “If not, they’ll look at Generation Park.”

And, given that railroads are an important part of various intermodal center, the question introduced by Tim Baker with FCL Builders was how, exactly, railroad companies were to work with. The panelists agreed that working with the main rail companies can be challenging, especially if a project isn’t in their best interests. Erin Poulson Morris with Wonderful Real Estate Development allowed that the company’s 1,625-acre Wonderful Industrial Park in Shafter, CA, is BNSF-Certified, meaning working with that rail carrier has been made somewhat less onerous. “It wasn’t easy to do that,” she said. “But now we have the authority to set up rail, and make it work for them.”

When discussing municipal and state incentives for attracting tenants, Morris explained that California is an “incentive-light” state, especially with vacancies closer to the Ports of Los Angeles and Long Beach at an “all-time low.” The two motivators as to why companies lease industrial land in California, she explained, was cost, and labor. “Obviously,” she said, “if you want to be close to the largest ports in the country, you come out here. You don’t come here for the state incentives.”

While Texas is anything but incentive-light, Flourney and Flushing were split on whether incentives attracted tenants. Flushing, for one, indicated that just about every deal coming into the Cedar Port development has some kind of incentive to it. “It’s important, it’s a drive,” he said, adding that among the 13 counties in the Houston MSA, “many have become aggressive (with incentives) over the past few years.”

Flournoy, however, indicated that Generation Park has a Foreign Trade Zone. However, in attracting larger corporations to the project, the FTZ hasn’t necessarily been a critical factor in the decision-making process other than a box that can be checked. “Companies either want to be in a location or they don’t,” he added. “They might hem and haw over incentives . . . but operating costs will be higher if they’re in inadequate locations, chasing incentives.”

Pictured (L-R): Tim Baker (FCL Builders); John Flournoy (McCord Development); Erin Poulson Morris (Wonderful Real Estate Development); Holden Flushing (NAI Partners)

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Connect Industrial: Supply Chain Chat

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