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From Site Selection magazine, November 2010

California Cultivates Food Projects

Huy Fong’s new complex in Irwindale will encompass headquarters, manufacturing and distribution functions.
Image courtesy of Seventh Street Development

nown for producing nearly half of the nation's fruits, nuts and vegetables from its US$36-billion agricultural base, the Golden State this fall harvested two major food industry projects within one week.

Mission Foods held a grand opening in the San Fernando Valley community of Panorama City for its new $50-million LEED Gold-certified plant, which will employ 400 when it reaches full capacity. Multiple efforts have been made to redevelop the former General Motors plant since it closed in 1992, including projects from the apparel industry project, Los Angeles public safety departments and a mixed-use development called "The Plant."

Now, after signing a 10-year, $16-million lease in 2007, Mission Foods will use 200,000 sq. ft. (18,580 sq. m.) of the complex to churn out tortillas. Mission partnered with SoCalGas through its Energy Efficiency Calculated Incentive Program to build the plant. Receiving design assistance from SoCalGas, as well as $45,000 in financial incentives to install preheat combustion air for corn and flour tortilla ovens and preheat cooking oil for fryers, the Panorama plant saves approximately 250,000 therms of natural gas per year.

"Working with SoCalGas has helped us to lower our manufacturing and energy costs," said Lucy Gonzalez, vice president of sustainability for Mission Foods. "We are committed to creating sustainable operations — not just lowering costs, but also reducing our carbon footprint." Other sustainable efforts include rooftop solar panels for generating some of its own electricity, heat recovery systems, and systems that minimize water use.

Refugee to Redeveloper

Down the road in Irwindale in early October, Seventh Street Development broke ground on a new $40-million corporate headquarters, manufacturing and warehouse facility for Huy Fong Foods, Inc., best known for its Sriracha Hot Chili Sauce. The company will consolidate operations currently housed in two separate locations totaling 232,000 sq. ft. (21,553 sq. m.) in nearby Rosemead to the new build-to-suit when it is completed in fall 2011 on a 23-acre (9.3-hectare) site. The California Mission style building will include 26,000 sq. ft. (2,415 sq. m.) of office space, 150,000 sq. ft. (13,935 sq. m.) of manufacturing space and 480,000 sq. ft. (44,592 sq. m.) of warehouse space all under one roof.

The redevelopment project is expected to eventually add 190 new jobs (tripling Huy Fong's payroll) and provide $1.5 million annually to the City of Irwindale over the next 10 years in the form of taxes, fees and other payments.

Seventh Street Development, based in Long Beach, was selected by the City of Irwindale in 2008 to develop the blighted site that had been vacant for more than 12 years. Seventh Street assisted Huy Fong in the acquisition of the site and negotiation of a development agreement with the City; obtained necessary entitlements and CEQA clearances for the project; selected the design and construction team; and will oversee the construction of the facility.

Huy Fong plans to grow its manufacturing capacity tenfold by 2016 to meet demand. The company was founded in 1980 by David Tran, a refugee from Vietnam, in a 2,500-sq.-ft. (232-sq.-m.) L.A. warehouse. Tran named his company after the ship that carried him and his family to freedom following the collapse of South Vietnam.

"With many of its employees living in the area, it was important to Huy Fong to stay in the San Gabriel Valley, which has been its home since 1987," said Craig Furniss, a principal at Seventh Street Develoment. "Irwindale was one of the few areas able to accommodate Huy Fong's space requirement and still make financial sense from a development and user perspective."

Bipartisan Support


he National Association of Manufacturers in early October released its analysis of voting records by the 111th Congress on issues NAM feels are most relevant to the nation's manufacturing economy. Legislators who attain a 70 percent or higher rating on NAM's key manufacturing votes earn an award. NAM identified 18 key votes in the House of Representatives and 13 in the Senate, ranging from the Healthcare Act to greenhouse gas regulations to tax increases on U.S. companies with significant operations overseas.

Most of the 211 legislators who earned NAM's award were Republicans — in the Senate, all of them were. However, there were nine territories where Democratic representatives also earned the award: Alabama, Arkansas (2), Georgia, Maryland, Mississippi, Oklahoma, South Dakota, Tennessee and Virginia.

IREM Office Analysis Yields Potent Data


ccording to the 2010 edition of the "Income/Expense Analysis®: Office Buildings", a new benchmarking study available for purchase from the Institute of Real Estate Management (IREM®), total collections for suburban office complexes nationwide in 2009 increased 1.0 percent from 2008 levels to $19.75 per sq. ft. of net rentable area. Downtown properties experienced a mere 0.2-percent year-to-year rise to $21.89 per sq. ft. Total actual collections for downtown properties were 10.8 percent more last year than their suburban counterparts.

The annual study analyzed operating income and costs for 1,980 private-sector office complexes in major metropolitan areas and regions in the United States. Among other findings:

Total operating costs for suburban buildings in 2009 decreased 0.5 percent from the prior year to $8.80 per sq. ft., while operating costs for downtown properties decreased 1.9 percent to $10.09 per sq. ft.

Net operating costs for suburban buildings decreased 3.1 percent to $6.20 per sq. ft. in 2009 vs. 2008, whereas those for downtown properties decreased 4.9 percent to $7.13 per sq. ft.

Three of five major expense categories for suburban properties rose last year. All but one of the five major expense categories for downtown properties decreased last year from the year prior. Overall, suburban properties proved 12.8 percent less costly to operate in 2009 than their downtown counterparts, with all expense categories less than those in downtown buildings.

The national vacancy rate for suburban office properties in operation for 12 months rose 4 percent in 2009 vs. 2008, while the rate for downtown properties rose 2 percent. The 2009 vacancy level for suburban properties was 11 percent; that of downtown properties was 7 percent.

Median annual energy consumption by suburban office buildings, defined in thousands of BTUs per sq. ft., was highest (71.81) in 2009 in the south-central region, defined as comprising Texas, New Mexico, Oklahoma, Arkansas and Louisiana. It was lowest (38.89) in the region comprising California, Nevada and Arizona.

Census Bureau Proposes Criteria Redefining Urban Areas


he Census Bureau in August proposed six major modifications to the criteria for defining urban areas based on the results of the 2010 Decennial Census. The changes have the potential to change how some federal resources are allocated.

Among other proposals, the Bureau plans to identify business districts and commercial zones located both on the edge and in the interior of an urban area that would not qualify as urban based on residential population measures alone. Other proposals include lowering the minimum annual enplanement threshold from 10,000 to 2,500 passengers to provide a better inclusion of airports in adjacent urban areas. The move would result in an additional 152 airports included in urban areas. Finally, the Bureau is considering splitting large urban agglomerations along MSA boundaries in order to aid more meaningful analysis.

To access the 12-pp. Federal Register entry about the changes, visit Comments, suggestions, or recommendations concerning the criteria are to be submitted in writing no later than November 22, 2010.

While Commuters Wait, A New Path for Freight

A passenger train is pulled by the inaugural locomotive to pass through the newly expanded Bergen Tunnel, part of the newly established Liberty Corridor Freightway, which will enable expanded intermodal train access to and from the Port of New York and New Jersey.
Photos by David Calderwood, Euro-Pacific Multimedia

hile a major passenger rail corridor project hangs in limbo this fall, a less heralded but no less effective one has been launched into service.

On Oct. 8, CSX, the State of New Jersey and the Port Authority of New York and New Jersey celebrated the opening of the Liberty Corridor Freightway, a major public-private partnership that provides expanded access for intermodal freight to the Port of New York and New Jersey. The corridor is expected to ease truck traffic, as one Liberty Corridor Freightway train carries the cargo of 250 trucks and emits one-third the nitrous oxide and particulate matter.

Construction was a logistically complex undertaking that raised the clearance of two tunnels in New Jersey to accommodate double stack freight trains. One tunnel, which dates from the administration of Abraham Lincoln, passes through more than 4,000 feet (1,219 m.) of dense rock directly beneath Jersey City, N.J.

That same day, New Jersey Gov. Chris Christie held a meeting with U.S. Transportation Secretary Ray LaHood, after having terminated New Jersey's commitment to the "Access to the Region's Core" (ARC) commuter rail tunnel project, thus bringing the US$8.7-billion project to a screeching halt. Christie said the state and its $2-billion share, during trying budgetary times, simply couldn't abide by the cost overruns associated with the project, which he said could balloon the cost to some $14 billion.

However, estimates vary widely for what is the largest public works project in the nation. After the meeting with LaHood, Christie announced a special study group formed with federal officials to try and salvage a solution that would make the project viable once again to his administration.

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