Power Points - Site Selection Magazine

Let’s say Johnson County, Indiana, is deemed the perfect location in which to open a manufacturing operation or distribution center. It’s close to Indianapolis — itself a logistics powerhouse — and is well served by north-south Interstate 65.

Now the question becomes whether to locate at a site, in a business park or otherwise, served by an Investor Owned Utility (IOU) or Hoosier Energy. The latter provides wholesale power to distribution cooperatives — independent member-owned businesses established to provide at-cost electric service. In this scenario, that would be Johnson County REMC, one of 18 Hoosier Energy cooperatives.

“We serve roughly two-thirds of the surface territory in the county, and an IOU serves one third,” says Chet Aubin, CEO of Johnson County REMC, based in the county seat of Franklin. “It’s the reverse on the number of consumers. Both service territories have industrial parks. We do compete, but it’s a friendly competition. We both know that if a company locates in the community, the community benefits by being able to improve the quality of life here. If we win it, a lot of people employed by the company will have homes in and do business within the IOU service territory, and the reverse is true.”

Johnson County REMC was a founding member of the Johnson Co. Development Corp., says Aubin, and works closely with site developers to help them open new industrial parks in the county. Five are in place today, and two more are in development. “When a developer opens a site, we work with the cities and other utilities to make sure there is plenty of gas, water and sewer. We always loop the individual sites with electric so there is a dual feed. We also provide a looped service for fiber, because we have a subsidiary fiber business in which we sell off bandwidth to industries and commercial operations.”

‘Reliability Is Very High’

Aubin says capital investment prospects begin looking at cost competitiveness “right up front — one of their first questions is about the cost of electricity based on their usage pattern. We’re very fortunate that with our mix of members and industrial customers we are very competitive on energy rates. Reliability is a big issue for a lot of industries, and one advantage we do have is with our service territory being capable of dual feed or back feed for almost all our services. Reliability is very high.”

If rates are a wash, then what’s the motivation for taking the REMC route? In fact, there are two — one intangible and one tangible.

“Energy provision is just one factor,” Aubin relates. “Building a relationship with prospects and their being comfortable with the service we give is where our real benefit is. Being a small organization we can react quicker. A key accounts person will meet with the company on a quarterly or monthly basis, depending on their size, always looking to see if they have some additional needs down the road or if they have issues with power quality. There is an interaction between us and the industry, and we let them know that right up front, which helps sway them over to our service area.”

Chet Aubin
CEO
Johnson County REMC

The tangible benefit is the high-quality internet service Johnson County REMC makes available to its customers. “We can provide up to 10 gigabits at an industrial site if they’re interested in that,” says Aubin. The REMC has networked its 12 substations around the county with high-speed fiber, he explains.

“When we built that fiber out, we made sure we built through where the industrial parks were going to be so we could provide bandwidth to the parks,” says Aubin. “Our partner, NineStar, provides the bandwidth for us to sell off. Most of our industrial customers are taking advantage of this, which is an additional revenue source for us. That helps us control costs. One of the nice things about commercial and industrial accounts is it helps us spread our costs so we can control our rates for all our members.”

This Investment Profile was prepared under the auspices of Hoosier Energy. For more information, visit www.hoosiersites.com, or contact Harold Gutzwiller at (812) 876-0294

The world’s largest stand-alone Building Integrated Photovoltaic (BIPV) power project connected to the energy grid in Shanghai on July 18 — and not a moment too soon. Later that week, the Paris-based International Energy Agency announced that China had surpassed the United States as the world’s largest consumer of energy. More such projects are likely as China works to meet its growing energy demand from renewable power sources.

The BIPV project at Shanghai’s Hongqiao Station, part of the Beijing-Shanghai High Speed Railway, was funded and developed by the China Energy Conservation and Environmental Protection Group (CECEP). It utilizes awning roofing on both sides of Hongqiao Railway Hub with coverage of 61,000 sq. m. (656,970 sq. ft.), and includes more than 20,000 solar panels. The 6.688-MW solar system can produce 6.3 million kwh of electricity annually to meet the needs of more than 12,000 Shanghai households. (For more signature energy projects around the world, see the Energy Innovations feature.)

In many places around the globe, the routing of traffic is as pressing a matter as the routing of energy. Major tunnel projects in Miami and underneath the Hudson between Manhattan and New Jersey figure to promote huge economic benefits as they are completed in the coming years.

The Port of Miami Tunnel will connect Watson and Dodge Islands by going under the Government Cut, a man-made shipping channel. The $1.1-billion tunnel project, which includes US$607 million in design and construction costs, will be developed as a public/private partnership under a concession agreement. The tunnel is the centerpiece of three major infrastructure projects connected to the port that are being developed for, and timed with, the Panama Canal expansion.

The other projects are dredging the main channel harbor to accommodate the world’s largest container vessels and a planned $45-million investment in the current railway at the port and a four-mile (6.4-km.) segment that leads to an intermodal yard.

“Currently, there is one point of access at the port, a bridge that ultimately leads you through downtown,” says Kevin Lynskey, assistant port director. “As we have been growing, the downtown has grown and we have close to a million truck trips in and out of the port each year. If we grow at an average 5-percent clip, we will have double the number of truck trips over the next 20 years. If the tunnel was not in place, we would no longer go along our natural growth trajectory. It ensures the port will continue to grow for a 25-to-30-year period.”

The Port of Miami has been authorized to deep dredge to a depth of 50 feet (15 m.) to accommodate the huge post-Panamax ships it anticipates will be coming to the port following the Panama Canal expansion. Lynskey says the Port is currently trying to secure the $75-million federal share of the $150-million dredging project. The Army Corps of Engineers is currently conducting an engineering study for the project.

Lynskey says the port is developing relationships with large landowners, warehouse companies and freight forwarders for its anticipated growth.

“If we get the deep dredge, we could have a real spurt in growth from 2014 to 2020,” he says.

Lynskey says 70 percent of the cargo that comes through the port ends up in Dade County’s warehousing districts and the remainder departs on rail or long-haul trucks. He says logistics company officials in Asia are taking an interest in Miami’s expansion plans.

“When you break down where the cargo opportunity is in South Florida, a lot is in the Asian trade,” Lynskey says. “Now, we get beat out by ports on the West Coast of the U.S. or Savannah and Charleston. A lot of the work we are doing today is aimed at 2014 to partake more of the Asian trade.”

Lynskey says the port improvements will help its statewide economic reach.

“Moving containers around actually pays very good wages for people who don’t have a college education. Our last study showed that port activity helps to generate 160,000 jobs throughout the state.”

Flagler Development and its sister company Florida East Coast Railroad currently use a 400-acre (162-hectare) tract near Miami International Airport as a railyard. Flagler plans to develop Flagler Logistics Park on 60 acres (24 hectares) of the tract. The company plans to break ground in 2011 on the 1-million-sq.-ft. (92,900-sq.-m.) park.

“We are going to take part of the rail-yard and put in freight forwarders and freight consolidators that do business with both the airport and the seaport who are looking for rail connections,” says Jose Gonzalez, vice president at Flagler Development.

Construction on the Port of Miami Tunnel began on May 15, and completion is anticipated in May 2014. Twin tubes, each 3,900 feet (1,189 m.) long and 41 feet (12.5 m.) in diameter, will reach a depth of 120 feet (37 m.) below the water.

“The most challenging aspect is the geotechnical aspect,” says Teresa Alvarez, Florida DOT district consultant management engineer. “We are on soft ground there and all kinds of testing has been done to make sure the tunnel is designed for the geotechnical conditions.”

Alvarez says a $45-million tunnel-boring machine, now under development in Germany by tunneling equipment specialist Herrenknecht, is being specially designed for the soil conditions. The tunnel will be by far the largest in the state. The only other underwater transportation tunnel in Florida is the Kinney Tunnel, which runs under the New River in Fort Lauderdale.

ARC Targets Manhattan Commuter Traffic

Construction on the $8.7-billion Access to the Region’s Core (ARC) Trans-Hudson Express Tunnel project, which will connect New Jersey to Manhattan via two commuter train tunnels, began in 2009 and is projected to be complete in 2018. ARC is aimed at improving commuter traffic between New Jersey and Manhattan.

New Jersey Transit and The Port Authority of New York and New Jersey say a “conservative” estimate is that the tunnel project will create 6,000 construction and related jobs during peak years of construction, and will generate some 44,000 permanent jobs after work is completed. The Port Authority is contributing $3 billion toward the Mass Transit Tunnel project, while the federal government is expected to contribute $3 billion under its “New Starts” transit funding program. Another $2.7 billion will come from a combination of other federal funds, including stimulus and clean air funding, as well as the New Jersey Turnpike Authority’s contribution.

The Regional Plan Association released a report in July that says the tunnel project will significantly increase New Jersey and New York home values near train stations, with a cumulative increase in home value of $18 billion.

The deepest underwater transit tube is progressing in Istanbul, Turkey. The Marmaray Tunnel will connect the European and Asian sides of the city by going under the Bosporus Strait. The $3.3-billion tunnel is currently due to be completed in 2013.

Who’s Recovering Best?

The need for smoother roadways is a constant. That’s why so many thousands of them are supported by funds from the American Recovery and Reinvestment Act of 2009. But the sheer number of resurfacings can conceal meaningful economic development projects like so much layered asphalt.

So we looked a little closer at 19,502 projects supported by Recovery Act Funds as of June 18, 2010, according to the U.S. House of Representatives Transportation & Infrastructure Committee. For instance, what percentage of all those projects would you guess mentioned an industrial or business park somewhere in their descriptions? If you guessed 0.19 percent (37 projects), you win the prize. The vast majority of the projects are associated with the Federal Highway Administration. But other agencies got support worth noting by corporate real estate site seekers.

Among the Corps of Engineers and U.S. DOT projects are a number having to do with widening and deepening of shipping channels and harbors, in such locations as Savannah, Ga.; Jacksonville, Fla.; Mobile, Ala.; Norfolk, Va.; Baltimore, Md.; Wilmington, N.C.; and Oakland, Calif. More than $158 million is headed toward projects in Houston, Texas City and Galveston.

Among the DOT’s 51 TIGER (Transportation Investment Generating Economic Recovery) grant recipients are such projects as the Otay Mesa Port-of-Entry I-805/SR-905 Interchange in San Diego ($20.2 million); the Kent Central Gateway Multimodal Transit Facility in Kent, Ohio ($20 million); rail improvements at the Port of Gulfport, Miss. ($20 million); all the Class I railroad intermodal freight corridor expansion projects; and the collaborative freight rail effort known as CREATE in Chicago ($100 million).

The top dollar attractor among the 68 projects receiving ARRA funding through the Economic Development Administration is a project that will use $6.4 million to extend a main water line, and provide a 1,400-gallons-per-minute pumping station and a 1-million-gallon water storage tank to serve the 1,000-acre (405-hectare) Highlands development site owned, operated and maintained by the Ohio County Development Authority near Wheeling, W. Va.

The Federal Transit Administration is administering 1,031 Recovery Act fundings. Many are going toward maintenance and upgrades of established systems on the East Coast. Others include nearly $139 million for a light rail project and maintenance facility (and some bus purchases) in Salt Lake City, and $87 million for a package of improvements in Houston that includes 19 light rail cars. Other communities seeing funding for rail transit include Portland and Salem, Ore.; and Phoenix, Ariz.

Among the largest awards from the Maritime Administration’s small shipyard program is more than $11.1 million for cranes and a dry bulk conveyor system for the Toledo Lucas County Port Authority in Ohio.

The same community in July saw approval to proceed by the Ohio Rail Development Commission (ORDC) on a $12.3-million expansion and upgrade of intermodal capacity at Norfolk Southern’s Airline Yard. Half of the funding will come from ARRA, with the remainder coming from the ORDC, the Ohio Department of Development and Norfolk Southern. Because of congestion, many intermodal trains recently have been bypassing Toledo for other intermodal facilities in the Midwest.

“With the anticipated demand to move freight by rail nearly doubling over the next 20 years, these public-private partnerships benefit our nation’s transportation infrastructure,” said Bob Huffman, NS vice president intermodal operations. According to the Association of American Railroads, intermodal traffic in June was up 19.2 percent compared with the same month in 2009, the largest year-over-year monthly gain since AAR records began in 1990.

While big dollar figures tend to get the most attention, some of the most meaningful Recovery Act actions don’t necessarily cost the most money.

Take the $425,000 going toward construction of a new 300-gallon-per-minute water well at the Copiah Industrial Park in Copiah County, Miss. The line item description in the federal committee report is one of the few containing this language: “will retain 500 manufacturing-related jobs.”

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