IAMC INSIDER
Van Baker began his railroad career 40 years ago in the accounting department of Southern Railway. Retired as of April 1, he now leaves his corner office in downtown Atlanta to Patti Carroll, one of six corporate active members from Norfolk Southern who now belong to IAMC.
Name:
Van Baker
Title & Organization:
Portfolio and Operations: Norfolk Southern Corp. is a Norfolk, Va.-based company that controls a major freight railroad, Norfolk Southern Railway Co., which operates approximately 21,000 route miles in 22 eastern states, the District of Columbia and Ontario, Canada; serves all major eastern ports and connects with rail partners in the west and Canada, linking customers to markets around the world. Norfolk Southern employs approximately 31,000, with 45 employees in the real estate department. We own approximately $22 billion in properties over the entire system which includes both operating-right-of-way and non-operating properties.
Our facilities are primarily owned, with over 7,000 active leases (mostly land) across the system. The real estate department is first and foremost a service department: supporting rail operations and interacting with every business unit within the company; working closely with our operating department to acquire properties for expansions of mainline tracks, intermodal yards and with our industrial development group for new industries. Second, it provides a steady and consistent income stream from sales of surplus properties, leases, and other programs including wires and pipe crossings, farm and timber, fiber optics, and billboards. Half of the $100 million we make a year in the real estate department comes out of repetitive income.
To whom do you report?
How many years have you worked in the profession?
Where and what did you study?
Describe the most important transaction or project for which you were responsible.
Moving its regional headquarters into the David R. Goode Building in 2004 was a timely, cost-efficient and employee-friendly move for Norfolk Southern.
What is the biggest professional challenge you face on a regular basis?
How is the role of manager of real estate evolving?
Which technology do you consider to be essential in your professional life?
Not only did real estate benefit from this, but many other business units did as well, such as tax and accounting. As with any other technology, you must keep your database current – we are now into our third generation of rewrite, going to a Web-based system.
Equally important to information is communication. As everyone knows in the real estate world, timing is everything, and fast, accurate communication is a must. We have gone from only the head of the department having a cell phone, to all real estate agents having high-speed notebooks and, most recently, everyone having a Blackberry. We haven't had a GPS system, and we now have one – we're buying mobile units for all of our field people that will interact with our engineering GPS. When someone is out in the field trying to determine where our property ends and begins, they'll have this piece of equipment that will tell them exactly. We looked at buying some products out there on the shelf, and there was nothing that looked like it would work as well as something we could do in house.
What is the value of IAMC membership to you?
IAMC's University Connections
Stern Student Center on the campus of the College of Charleston
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y the time you read this, IAMC's latest post-Forum university session will have taken place at Arizona State University's prestigious W.P. Carey School of Business. The session is fast becoming a tradition that corporate active members want to take part in, a) because their companies, like everybody else's, want to fill their talent pipelines, and b) because they want to show the next generation just what corporate real estate is all about.
In addition to these fruitful sessions, the university community already is well represented in the coast-to-coast ranks of IAMC membership. Academic members include Stephan Lauzier, director of real estate for Cornell University in Ithaca, N.Y., and John Lombard, director of the Center for Real Estate & Economic Development at Old Dominion University in Norfolk, Va.
But the higher education link extends even farther: Over its more than five years of existence, IAMC has boasted a small but steady stream of university students. As of April, they included Bradley Johnson of the University of California Los Angeles (UCLA), Raniero Fini of Cleveland State University in Ohio, Brendan Redeyoff of the College of Charleston in South Carolina, and Robert DiPiero of New York University. Several of these schools are widely recognized for their real estate and economic development curricula.
DiPiero, who is pursuing a master's degree, is in the midst of an internship with Meridian Development Partners, known for its redevelopment of former industrial sites, including the recent conversion to flex space of a glazed and unglazed mosaic tile manufacturing plant formerly belonging to IAMC active member firm Dal-Tile near Jackson, Tenn.
Redeyoff has pursued his own internship with a CB Richard Ellis industrial broker in Charleston over the past two years, while he majors in Business Administration with a focus on real estate and supply chain management. He plans on becoming a CBRE associate upon graduation, with a focus on port-related businesses and others in the Charleston, Greenville-Spartanburg and Savannah markets.
"I hope to learn and stay up to date with current issues corporations are dealing with in regards to their supply chain and real estate decisions," says Redeyoff of his IAMC membership. "I plan on also making use of the extensive network of professionals in the corporate real estate industry."
— Adam Bruns
Campbell Stays the Course
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fter considering just a headquarters expansion as well as a wholesale move to central New Jersey, Campbell Soup Co. announced in late February a revised plan for the Gateway District in Camden, N.J.,
Campbell Soup Co.'s headquarters and office park plans are still moving forward, despite having encountered numerous obstacles over the past year.
"We have considered many options, but have decided that our goal is to remain in Camden," said Campbell President and CEO Douglas R. Conant. "We are prepared to begin constructing our new building as soon as possible, and look forward to helping revitalize the area by developing an office park in the city."
Under a revised agreement with the state of New Jersey, the city and county of Camden, and the Camden Redevelopment Agency (CRA), Campbell will build an 80,000-sq.-ft. (7,432-sq.-m.) employee services building as originally planned. The new project development agreement (PDA), which was slated to be voted on in March, will not include an amendment to re-zone the city's current Gateway Redevelopment Plan from "light/industrial office" to "office campus zone."
Additionally, the new plan will not add the Sears building to the list of properties to be acquired as part of the efforts to develop an office park to attract business tenants to the city. The carefully worded release touched on the company's longstanding issues with Sears building ownership:
"Removing the Sears building from the list of properties to be acquired will enable Ilan Zaken, the building's current owner, to restore the vacant and long-neglected building," said the company, essentially calling Zaken's bluff. "Mr. Zaken, who has outlined his intention to move his operations into the building, has indicated he would invest approximately $1 million in repairs. Campbell has estimated the cost of repairing the building at more than $6 million, based on inspections conducted by environmental, engineering, and construction experts. Zaken took ownership of the building in October 2007."
Finally, the proposed office park, for which Campbell will serve as master developer,
Bob Zane, vice president, real estate operations, Campbell Soup Co.
"While we believe the original proposal represents the best development opportunity for the Gateway District, we are prepared to move forward with a revised plan," said Robert Zane, vice president, real estate operations, Campbell Soup Co., and a former chair of IAMC. "We have acquired a sufficient amount of real estate in the area to proceed with plans to develop an office park."
The company has used its own funds to acquire two vacant buildings, both of which have been razed to clear the way for eventual redevelopment of those parcels. Separately, the New Jersey Superior Court in January had voided the Camden Planning Board's approval of the company's new building based on the Chairman of the Planning Board's apparent conflict of interest. In order to get things moving forward, Campbell has chosen not to appeal the ruling, and has refiled its applications with the city for site subdivision, building variances, and street vacations. The Camden Planning Board and the Camden City Council will again hold public meetings on the project.
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AMC member firm International Paper in March signed an agreement with fellow IAMC member company Weyerhaeuser to purchase its Containerboard, Packaging and Recycling (CBPR) business for $6 billion in cash, subject to post-closing adjustments. "Weyerhaeuser has low-cost, well-run assets that complement our existing mill and converting system and offer significant synergies," said Carol Roberts, senior vice president of International Paper's packaging business. "The acquisition expands our geographic presence in the U.S. and Mexico and diversifies our customer base in key product lines."
International Paper has identified profit improvement opportunities of about $400 million annually from the acquisition. The company expects to achieve at least 40 percent of the improvement within 12 months of completing the deal, with the remainder fully realized by the end of the third year, as a result of reducing duplicate overhead costs, integrating manufacturing operations, optimizing product mix, and improving operational and supply chain efficiencies.
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AMC member firm Corrections Corp. of America, the nation's largest provider of corrections management services, announced on February 22 a $143-million, 350-job investment in a new company-owned correctional facility in Trousdale County, Tenn. "We are proud to announce our latest investment in our home state of Tennessee," said John Ferguson, CCA President and CEO. "With this new endeavor, CCA brings enhanced economic vitality to northern Middle Tennessee through purposeful careers and millions of dollars in salaries, benefits and tax revenue. This infusion of capital improves the lives of families and bolsters public services."
"I am thankful to CCA for their continued investment in the people of Tennessee," said Matt Kisber, commissioner of IAMC member organization the Tennessee Department of Economic and Community Development.
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innesota, Pennsylvania and California are the beneficiaries of investments announced by IAMC member firm United States Steel Corp. (USS) in the past several months. The company will invest more than $300 million in its iron ore
Steelmaking requires coke making and iron ore mining. Both activities are slated to receive major investments from U.S. Steel at sites in Minnesota and near Pittsburgh, at the company's Clairton plant.
"This would represent the largest investment of its kind in our region since the construction of Pittsburgh International Airport and would help to ensure the long-term viability of U.S. Steel's entire Mon Valley Works, which employs more than 3,000 people and is Allegheny County's largest manufacturer," said Allegheny County Chief Executive Dan Onorato.
— Adam Bruns
