AddThis Social Bookmark Button
MILITARY BASE REDEVELOPMENT
From Site Selection magazine, July 2007

 
The Philadelphia Navy Yard, located where the Schuylkill and Delaware rivers converge, recently attracted new headquarters locations for two high- profile Philadelphia companies.


Cakes
and
Takes

Former bases draw
interest from a bakery
and the film industry.

by JOHN W. McCURRY,
john.mccurry bounce@conway.com

T
astykake snack cakes are as synonymous with the City of Brotherly Love as cheese steaks and Rocky Balboa. So it should come as no surprise that Tasty Baking Co., which has been churning out its sweet products since 1914, would choose to stay in Philadelphia for its new production facility and headquarters.
   But while Philadelphia was able to keep one of its culinary institutions from straying, the process was not exactly a piece of cake. Tasty Baking also looked at sites in several states as it went through a year- long operational review of its options to replace a six- story manufacturing facility built in 1922.
   "We looked at different sites, but we wanted to stay in the Philadelphia area," says Autumn Bayles, Tasty Baking's senior vice president of strategic planning and technology.
Autumn Bayles is senior vice president, strategic operations, for Tasty Baking Co.
"Tasty Baking has quite the history here and we as a management team wanted to stay here if we could make it work economically. We did a lot of analysis and we did our homework once we narrowed to a short list of sites."
   Bayles, who directed the company's initiative to find a new manufacturing site, says that keeping the venerable snack cake maker in Philadelphia was somewhat of a challenge due to space constraints for a large manufacturing operation within the city. A proposal to consider the Philadelphia Naval Yard, put forth by the Philadelphia Industrial Development Corporation (PIDC) during Tasty's site search, picked up steam during the process.
   "Philadelphia is a fairly old city and there were not too many options for us," Bayles explains. "We looked at the geography, and the Navy Yard is near two major highways [Interstates 95 and 76]. From a transportation perspective, it fits into our shipping network. It's a beautiful site right on the water, and fits into our criteria for making it work economically."
   Helping the site work economically are state and local incentives, including $32.6 million in low- interest development loans. Tasty has also been awarded a $600,000 Opportunity Grant by the Commonwealth of Pennsylvania. The site is also in a Keystone Opportunity Investment Zone, which will provide tax abatement until 2018.
   The company signed a 26- year lease with Liberty Property/Synterra Limited Partnership for a 345,500- sq.- ft. (32,000- sq.- m.) building on 25 acres (10 hectares). That includes the production plant, a warehouse and a distribution center. The company is also locating its 35,000- sq.- ft. (3,300- sq.- m.) headquarters in the Navy Yard's Corporate Center, about a mile away. Liberty/Synterra will develop that building as a LEED- certified facility. It will employ energy efficient HCAC, water conservation, recycled building materials and "daylight harvesting."
These renderings show Tasty Baking's planned manufacturing and distribution facility (right) and its new headquarters building (below) in the Philadelphia Navy Yard.
Tasty Baking will move its operations from its current antiquated facility to the Philadelphia Navy Yard by 2010.

   The production facility will have the latest automated equipment, and the design includes a mezzanine to allow for public tours. That's a first for the company.
   "Tours are something we haven't been able to do," Bayles says. "We like the fact that the site is accessible to consumers. It's a bonus we're really excited about. Our plant is nearly 90 years old and it's exciting to get a new manufacturing facility. The Navy Yard is such a great location and it's the best choice for our shareholders as well. The economics were great."
   The project requires a year of site work, including infrastructure preparation. Tasty management expects to begin construction during the summer of 2008 with completion in the fall of 2009. The facility will be fully operational in mid- 2010 following a transition period. Tasty also will continue to operate a production facility in Oxford, Pa., near the state's southeastern stateline with Maryland and Delaware.
   Tasty's streamlining of its operations will eliminate 215 jobs, mostly through normal attrition, during the transition to the Navy Yard site. Bayles says the new automated equipment will allow a reduction of production lines.
   The Navy Yard, located along seven miles (11 km.) of waterfront at the confluence of the Schuylkill and Delaware Rivers, is the former Philadelphia Naval Shipyard, which closed in 1996, following 120 years of service. The 1,200- acre (486- hectare) site has since been developed into industrial and office space, employing about 7,000. Another recent addition is Urban Outfitters, the trendy
Urban Outfitters found a way to grow in its hometown by outfitting five buildings at Philadelphia Naval Yard as a headquarters complex.
clothing and accessories firm founded in Philadelphia in 1970. The company moved its headquarters and 550 employees into five renovated buildings in late 2006.
   John Grady, PIDC senior vice president, says while the Navy Yard's initial targets focused on manufacturing and industrial uses related to its traditional shipyard activity, efforts have since diversified into corporate office uses. Future development is likely to include R&D projects related to energy and engineering, and manufacturing activity around that sector, he says.

Hollywood Zooms In
   The vastness, available infrastructure and locations of most former military installations have caught the attention of at least two groups seeking to build film studios.
   An effort involving the South Weymouth Naval Air Station, located about 15 miles (24 km.) south of Boston, hinges in part on a pending Massachusetts legislative bill that would boost existing filming and production incentives.
   "We've had some movie producers who've been successful in Hollywood look at the site," Massachusetts Rep. Ronald Mariano tells Site Selection. "They were looking for a place to do cutting and editing of films produced on the East Coast and Canada. They had been looking in New York City and couldn't find anything that big. While they were searching on the Internet, the saw the site for South Weymouth and did a virtual tour on the Web. They then contacted me through folks who used to work for our film bureau in Massachusetts."
   Mariano, who represents part of the area that includes the base, says the producers are looking to build a campus- type project. The investment could eventually reach $80 million and the project could occupy up to 30 acres (12 hectares), he says.
   "We took a tour and had folks from the governor's office in for the meeting," Mariano says. "We talked about what types of incentives they needed and then we came up with this bill that gets them to where they want to be as far as being competitive with other states. In some cases, it's better than what other states are offering."
   Mariano says the former base offers a lot of advantages in addition to being close to Boston. These include direct highway access and the future construction of a multi- modal transportation site. It is also near a commuter rail line.
   The bill had its first hearing on June 5, and Mariano expects the Legislature will bring it to a vote quickly.
   On the other coast, filmmakers and comedians the Wayans brothers are reported to be behind an effort to develop two sections of the former Oakland Army Base. The project would include a film production studio and a business park targeting creative companies.
The Wayans brothers have big film production plans in mind for the former Oakland Army Base in northern California.

San Antonio Base Draws Investment, Award
   DPT Laboratories, a DFB Pharmaceuticals company, opened a new 258,000- sq.- ft. (24,000- sq.- m.) R&D, manufacturing and distribution facility in San Antonio's Brooks City- Base last November.
DPT Laboratories moved into its new facility in San Antonio's Brooks City- Base last November.
John W. Feik
DPT, which specializes in contract drug development and manufacturing, moved from another San Antonio location and anticipates increasing its employment over time from its current 136 to about 250.
   John W. Feik, DFB president and COO, says his company looked at many alternatives before picking Brooks City- Base.
   "Brooks offered a unique opportunity and timing in the sense that we were looking for space," Feik says. "We enjoy the San Antonio environment and the critical mass of scientific engineering here. We had an immediate need of some considerable size, about seven acres [2.8 hectares] under one roof."
   Feik says DPT also has mid- and long- term expansion needs, and the Brooks location fills those needs.
   "We didn't want to tie up a lot of capital and land. The Brooks Development Authority, the city and the Department of Defense made a very accommodating package."
   Another plus, Feik says, is that Brooks has a long history of DoD medical research. Feik expects DPT will add another 50,000 sq. ft. (4,650 sq. m.) within five years and then expand even more in subsequent years.
   Feik says he is pleased with the Brooks location thus far, and believes DPT's presence will help attract future investment.
   The Association of Defense Communities (ADC) gave its 2006 Community Innovation Award to Brooks City- Base, the former Brooks Air Force Base. Brooks City- Base, a unique partnership between the city of San Antonio and the Air Force, is being developed as a technology and business center.
   Brooks was sold to the city in 2002 and leased back to the Air Force. The Air Force leased only a portion of the base, and it was placed on the BRAC closure list in 2005.
   ADC lauded the Brooks Development Authority for attracting high- tech companies like DPT and upgrading infrastructure to attract a new $24.5- million city/county emergency operations center.

Bases Leasing Excess Property
   Operational military bases are optimizing excess property through the Dept. of Defense's Enhanced Use Leasing program, which allows bases to enter into long- term leases for cash or in- kind considerations.
   One of the latest examples of this is the Picatinny Applied Research Campus (PARC), which is being developed at the very active Picatinny Arsenal, a 6,500- acre (2,630- hectare) installation in the northwest corner of New Jersey that is one of U.S. military's key armament R&D centers. The project is being developed by Advance Realty Group through its Forge Technology affiliate, which has closed on a 50- year lease with InSitech, a partnership intermediary for Picatinny Arsenal.
   The first phase of the project, slated for groundbreaking this summer, is development of 100,000 sq. ft. (9,300 sq. m.) of office and lab space within the boundaries of the base's high- security enclosure. Future phases involve development of more than 1 million sq. ft. (92,900 sq. m.) on an additional 120 acres (49 hectares).
   Developers anticipate demand from government contractors at Picatinny and from research universities, nanotech and emerging technology companies. Tenants would have access to Picatinny's $1.5 billion worth of high- tech equipment, more than 60 laboratories, and intellectual assets.

Site Selection
TOP OF PAGE

Top of Page | Letter to Editor | Site Selection Online | SiteNet

Site Selection Online – The magazine of Corporate Real Estate Strategy and Area Economic Development.
©2007 Conway Data, Inc. All rights reserved. SiteNet data is from many sources and not warranted to be accurate or current.