Week of November 29, 2004
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Massive & Multimodal:
LYNE, Site Selection Executive Editor
FORT WORTH, Texas If you build
it, they may or may not come. But if you build it as massive
and as multimodal as If you build it, they may - or may not - come.
But if you build it as massive and as multimodal as AllianceTexas
, the odds that companies with ambitious expansion designs will
indeed come soar way up above average. Already rich in its
transportation and site options, AllianceTexas has now grabbed a huge
chunk of additional cachet on that account. Hillwood
Properties, the Fort Worth-based developer of AllianceTexas,
announced on Nov. 18th that the mammoth site is expanding by a whopping
1,671 acres (688 hectares).
BNSF Providing Rail-Loading BoostBNSF is doing the heavy lifting on the rail piece of the project. The owner of the nation's No. 2 freight railroad is adding 327 acres (130 hectares) at its Logistics Park-AllianceTexas to set up direct rail access.
"The ability to provide our carload customers with direct rail service is the one component missing in this industry-leading logistics park," BNSF Vice President of Business Development Fritz Draper commented after the deal was sealed. The addition of direct-rail loading is the latest step in BNSF's evolution in AllianceTexas. The pre-merger Santa Fe Railway first located inside the development, setting up an automotive industry logistics facility. BNSF continues to operate that 55-acre (22-hectare) facility, which serves as a major distribution site for DaimlerChrysler, Honda, Hyundai and Kia. But a significant part of the company's current focus is on Logistics Park- AllianceTexas. Spanning 750 acres (300 hectares), the operation already ranks as one of the largest U.S. intermodal facilities.
Providing direct rail-car loading strengthens the ability of Logistics Park- AllianceTexas to assuage a growing concern in site-selection logistics. Truck transportation's cost-saving allure has faded of late, what with multiple revenue drains that include soaring fuel costs, mandated shorter drive times for truckers and ever-worsening traffic congestion. Those factors have made many companies wary of locating at sites that depend entirely on truck transportation. They want choices - the more, the better.
"By adding this important component to Logistics Park-AllianceTexas," said Draper, "we will be able to provide our customers with a full suite of transportation options - intermodal, trans-load, automotive and carload service, with distribution and warehousing - in one location."
BNSF's expansion includes purchasing 38 acres (15 hectares) for rail-spur right of way. Specifics and financial terms haven't been made public for the numerous land buys involved in the AllianceTexas expansion. BNSF also hasn't
Alliance Airport's Longer RunwaysHillwood Properties President Mike Berry, however, did estimate that the Texas development's huge addition to its acreage will generate 10,000 jobs and $40 million in annual property taxes.
May Draw Aerospace Manufacturers
"It's only natural for Hillwood, the M.T. Cole Trust and BNSF to work together to continue to attract new businesses, jobs and economic development to AllianceTexas," Berry said. "The additional acreage increases AllianceTexas' position as one of the world's premier logistics centers. We can now offer rail- served buildings at Logistics Park-AllianceTexas and more runway-accessible land to make the development even more appealing as a site for aerospace manufacturing."
The development's additional runway access is part of how M.T. Cole Trust figures in the project. Created in the 1930s, the trust owns more than 10,000 acres (4,000 hectares) in southern Denton County. Far more to the point for this project, the group had long owned about 3,000 acres (1,200 hectares) in and around Alliance Airport, AllianceTexas' centerpiece.
Acquiring that acreage will do more than allow the development to add more runway-accessible sites. The Cole land acquisition will also enable Alliance Airport to extend its runways to 11,000 feet (3.33 kilometers),
Project Bolsters Development's HandAdding direct-rail linkage and more runway site access also better positions AllianceTexas to meet the challenging demands of today's often very large warehouses.
To Handle Ever-Larger Distribution Centers
That wasn't supposed to be the shape of things to come. Technology would surely drive the creation of smaller distribution centers, prevailing conventional wisdom once had it. That, however,
Distribution facilities of between 100,000 sq. ft. (9,000 sq. m.) and 125,000 sq. ft. (11,250 sq. m.), for example, were the size norm in the middle and latter part of the 1990s. All that's changed, though. Many companies are putting strong emphasis on rationalizing inventory and optimizing distribution efficiencies by creating fewer, larger operations.
That trend is reflected in research from ProLogis. Today's distribution centers average more than 250,000 sq. ft. (22,500 sq. m.), according to the Aurora, Colo.-based distribution solutions specialist. Distribution facilities as large as 1 million sq. ft. sq. ft. (90,000 sq. m.), in fact, are actually a fairly commonplace phenomenon in today's environment.
Largeness is also obviously part of AllianceTexas' latest extension of its boundaries. But that expansion ranks only as the second-biggest addition in the development's history. The still-reigning standard was set by the 2,300 acres (920 hectares) that AllianceTexas tacked on in 1994 through the purchase of the adjoining Circle T. Ranch.
Today the Circle T acreage houses not only corporate campuses, but also championship golf courses and a wide range of recreational options. (Today's AllianceTexas has another significant non-just-business component: Heritage, a high-tech mixed-use community.)
To date, some 4,000 acres (1,600 hectares) of AllianceTexas have been developed for occupancy. More than 130 companies have set up operations inside the development, housing 20,000 jobs in 23.5 million (2.12 million sq. m.) of space.
AllianceTexas' other A-list tenants include American Airlines, Bell Helicopter, Federal Express, General Mills, Hewlett-Packard, Intel, Kraft Foods, Maytag, SC Johnson Wax, United Parcel Service and Textron.
Pump It Up: Novo's $100-Million
Carolina Expansion Creating 187 New Jobs
by JACK LYNE,Site Selection Executive Editor of Interactive Publishing
State Incentives, Wal-Mart Pact, BadNovo, however, hasn't been idling its growth engines in Carolina since it put its earlier expansion on the back burner. The company recently completed a $12- million, 19,000-sq.-ft. (1,710-sq.-m.) expansion that began in 2003 at the high- volume operation in Clayton, 16 miles (26 kilometers) southwest of Raleigh. The new two-story structure increased the operation's quality inspection and cold storage capabilities, as well as enlarging its quality control lab space.
Habits: All Boosting Novo's U.S. Growth
The company has more than doubled its U.S. market share since 1999 after entering into a key alliance with Wal-Mart. Compensating for Novo's lack of a major American sales force, that marketing deal allows the world's largest retailer to sell Novo's insulin under Wal-Mart's ReliOn label. Wal-Mart, which accounts for around 8 percent of all U.S. insulin sales, markets ReliOn through its Wal-Mart and Sam's Club pharmacies.
Novo is reportedly currently seeking to further enlarge its U.S. market share through forming additional alliances with other major American vendors. In addition to Wal-Mart, the company's current U.S. alliance partners include Aradigm Corporation, with which the Danish firm has a co-development agreement for a pulmonary insulin delivery system, and Abbott Laboratories, with which Novo has a U.S. and Latin American licensing agreement for Gabitril, an epilepsy treatment.
Novo's U.S. sales have also gotten a boost from the American public's poor eating habits and lack of
In the company's Clayton expansion, however, North Carolina is the key alliance partner. Novo will receive as much as $2.3 million over 10 years through the state's Job Development Investment Grant program.
Gov. Mike Easley (D) called the expansion by "a world leader in diabetes care . . . a real win for our state. This announcement builds on our already thriving pharmaceutical industry here in North Carolina. This is further proof that our investments in education, infrastructure and work-force development are paying off."
Full Circle: Training AidNovo's aggressive designs on the U.S. market could generate more growth at the Clayton site in the future. When the Danish company completes its latest expansion in 2007, it will still own 210 vacant acres (84 hectares) adjacent to the Carolina operation.
Will Involve Site Novo Donated
Novo in December of 2003 donated eight acres (3.2 hectares) of its large tract in Clayton to the Johnston County Industrial Development Corporation (JCIDC). The JCIDC entered into a marketing agreement with Johnston Community College. The county group agreed to build a 30,000-sq.-ft. (2,700- sq.-m.) on-campus center for corporate training and continuing education. In addition, the JCIDC will also staff and develop the curriculum for the center, which is scheduled for completion in August of 2005.
In a sense, Novo's donation is coming full circle with the Clayton expansion. The state's incentives include a $250,000 training grant from the One North Carolina Fund. And the state's community college system will deliver the customized training program for Novo employees.
"One of the main reasons Novo Nordisk is expanding here is because of the training their employees will receive through the community college system," Easley said.
Worldwide, Novo employs some 19,600 workers in 69 nations. In addition to insulin, the company is a major player in areas that include growth hormone therapy, women's hormone therapy, and hemostasis (which involves stopping blood flow during surgery).
American Woodmark Does Maryland Again
with New 250- Worker Operation
by JACK LYNE,Site Selection Executive Editor of Interactive Publishing
GARRETT COUNTY, Md. American
Woodmark's expansion pace in west Maryland is beginning to recall
Secretariat's 1973 Triple Crown clip at the Baltimore-based Pimlico
Race Course. It was only five months ago that the Winchester, Va.-based
cabinetry manufacturer announced that it would locate a new 500-employee
assembly plant in Allegany County, Md. And now American Woodmark is
at it again, unveiling plans on Nov. 19th for its new lumber drying
and milling operation in west Maryland's Garrett
County that will create 250 more
announcing the project. Preparation will begin immediately at the site,
located just west of the city of Grantsville, Gosa explained. American
Woodmark hasn't yet determined an exact construction timetable for the
Garrett County operation, company officials said.
Project Will Help Meet StrongSatisfying that priority was the catalyst for American Woodmark's earlier decision this year to build the Allegany County plant.
That Maryland operation announced in June is adding a badly needed missing link in the company's U.S. production network. Demand for American Woodmark's products has been particularly strong in the U.S. Northeast and Mid- Atlantic regions. At first, the company met that demand from its Berryville, Va., assembly plant. The Virginia plant, though, was soon swamped with more volume than it could handle.
So American Woodmark scrambled to fill that gap - albeit cost-ineffectively. The company used its existing plants in Gas City, Ind., and Jackson, Ga., to serve unmet Northeast and Mid-Atlantic demand. The Allegany County assembly plant, which is on track to come online by early next year, will give the company "the ability to maximize synergies with its existing operations in Virginia and West Virginia, and to more easily supply the growing Northeast and Midwest markets," Gosa explained.
The new Garrett County facility will further muscle up American Woodmark's ability to serve Northeast and Midwest demand. The lumber drying and milling operation in west Maryland will lie near both the Berryville plant and a new cabinet-component plant near Moorefield, W.Va., that the company announced last year.
"American Woodmark's decision . . . to acquire additional land in western Maryland is truly a
Maryland Projects ContinueAmerican Woodmark's double-shot Maryland expansion continues the firm's rapid growth in recent years. Aided by America's housing and remodeling boom and historically low interest rates, the company last year recorded fiscal-year sales of $667.5 million, an annual increase of more than 18 percent.
Company's Rapid U.S. Expansion
American Woodmark moved to meet that bullish demand in its 2003-04 fiscal year by expanding existing plants in Kingman, Ariz.,
State and county officials said that they'll be providing the Garrett County project with a package of subsidies. Those incentives' total estimated value hasn't yet been announced. The Maryland Department of Business and Economic Development will provide project assistance for land acquisition, work-force training and recruitment. Garrett County's aid will consist of strengthening the project's infrastructure.
Garrett County Commissioners Board Chairman Ernest Gregg called American Woodmark's new mill "a great fit for Garrett County. [It] represents the culmination of years of effort to expand Garrett County's value-added and secondary wood business base.
"In addition to the direct jobs associated with the American Woodmark operation, the project will generate additional jobs for businesses providing raw materials and support services," said Gregg, who is in his fifth term on the Garrett County board.
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