VOL. 121 | NO. 125 | Monday, June 19, 2006
'If You Build It'
By Andrew Ashby
FIELD OF JOBS: This 600,000-square-foot warehouse could be the first of 11 others about a mile from the Union Pacific intermodal rail yard in Marion, Ark., on the border with West Memphis. When the overall project is completed, it could supply hundreds of jobs for area residents. -- Photograph By Andrew Ashby
In the 1989 movie "Field of Dreams," a mysterious voice tells Kevin Costner's character, Ray Kinsella, "If you build it, they will come," referring to the construction of a baseball field in the middle of Iowa farmland. A Chicago-based development company is taking that approach, except with a large-scale warehouse project at the northwest edge of West Memphis, Ark., touching the border of Marion.
The project is being built on Infinity Boulevard, but will not have an address until the utilities are connected in a few weeks.
The project's first step includes two 600,000-square-foot warehouses that could bring hundreds of jobs to the area.
The project started in June 2004, when the city of West Memphis approved Chicago-based TCB Development Corp.'s master plan, which showed 11 buildings with 5.5 million square feet of warehouse space within a mile of the Union Pacific intermodal rail yard in Marion. The entire project could fill 420 acres, with the buildings varying from 400,000 square feet to 1 million square feet.
Guaranty Loan and Real Estate Co. owns the property, and TCB is buying the land and developing it at the same time. TCB is getting closer to completing the first phase of the plan, with a 600,000-square-foot warehouse scheduled for completion in July - and is preparing the building foundation for another 600,000-square-foot warehouse.
The $17 million project includes the initial 90 acres and the two warehouses. Memphis-based Jameson Gibson Construction Co. Inc. designed and is building the first two warehouses.
"As they get tenants and lease those, they can go back and buy some more property," said Dennis Sorrell, a civil engineer who designed the streets and drainage for the project. The completion date of the entire project depends on how fast the tenants buy the properties.
"The buildings will be built as (TCB) rents the space they've got," Sorrell said. "It could take five years (or) it could take 10 years to build that park out."
'Built to suit'
TCB Development Corp.
600,000-square-foot warehouse to be completed in July.
Building pad set for another 600,000-square-foot warehouse.
Master plan calls for 11 buildings with a total of 5.5 million square feet.
Could create up to 500 jobs.
The warehouses are the first in West Memphis to be built without a predetermined buyer or user, said Van Spear, a broker with NAI Saig Inc. who is working for TCB on the project.
"Everything else is owner-occupied or built to suit," he said. "You have people that built a warehouse for their own particular use or they built it because somebody wanted that particular building for that particular location. (TCB is) building it and betting they will be able to put a tenant in it."
One reason the company might be able to fill the space is the fact that 36,000 train cargo containers come into the Union Pacific yard each month, Spears said. The warehouses are less than a mile from the yard, much closer than large storage facilities in Memphis and Southaven. This could help companies that ship containers through the Union Pacific yard with cost-cutting.
"They can save $150 to $160 per container by locating at this warehouse versus locating in other locations," Spear said.
Companies use warehouse space near intermodal yards for several reasons, such as breaking up the contents of large containers to send to multiple locations. Damaged goods might need to be unloaded for inspection. Containers also can be overloaded and have to be broken down to travel via truck on local, state and federal highways.
"Here's a place you can do it almost at the point of origin," Spear said. "With trucking, it's all about distance. If you have to go one mile out of the way, it's generally two miles because generally you have to go back to the point of the beginning. Any money you can save a company, that's money in their pocket."
Tony Vaccaro, vice president of Jameson Gibson and the warehouses' project manager, said he thinks the area's proximity to Interstates 40 and 55 also could help in finding tenants for the buildings.
"There are about 3,000 trucks a day that drive past this warehouse," he said. "I'm sure they'll find someone to lease it with that many trucks going by it."
West Memphis mayor Bill Johnson said he thinks the warehouses will be leased, although the buildings will have an effect on the city's economy earlier than that.
"Just the construction itself and jobs that are created as a result of it are an economic benefit," he said.
Logistics, a rising star
After the warehouses are completed, the economic impact on the city will be determined by which companies lease the space.
"Depending on the tenants that are attracted to utilize these buildings, there will be from 250 to 400 jobs per warehouse created in our community," Johnson said. "If you want to narrow it down to one building with 250 new jobs, that alone is certainly a factor in the economy of West Memphis. With just the two buildings, we're excited to have the potential of a minimum of 500 new jobs as a result of what's underway right now."
West Memphis has an adequate labor supply to fill those jobs as the area has become devoted to warehousing and transportation, Johnson said.
Mid-South Community College hosted a job fair in April and one company received 3,000 applications from local residents, Johnson said.
Schneider National Inc., a Green Bay, Wis.-based transportation company, runs a facility in West Memphis and is the city's largest employer. Watkins Motor Lines Inc., a transportation company that FedEx Corp. bought for $780 million in May, also operates a terminal in West Memphis.
Johnson said he thinks the city has room for more transportation growth, pointing to its access to I-40 and I-55. He also said the city still has open land that's relatively flat and that doesn't require much groundwork to prepare.
"The two (buildings) which are being constructed now are a tremendous benefit to us, and you can only compound that if (TCB) completes (its) master plan," Johnson said.