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VOL. 128 | NO. 208 | Thursday, October 24, 2013

Industrial Revolution

Patience, persistence pay off as Pidgeon nears capacity

By Amos Maki

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Frank C. Pidgeon Industrial Park was completed in 1967, but it’s only now, four-plus decades later, that the property is finally realizing its full potential.

More than four decades after being completed, the Frank C. Pidgeon Industrial Park is finally realizing its full potential with tenants such as Canadian National Railway Co.

(Daily News File/Lance Murphey)

The 3,500-acre industrial park was developed when Memphis and Shelby County paid roughly $4.5 million to buy the land in the late 1950s after city, county and Port Commission leaders saw the need for a large industrial park following the creation of Presidents Island.

“The concept was very innovative for its time and very impressive,” said Randy Richardson, vice president of port and industrial properties for the Economic Development Growth Engine of Memphis and Shelby County and executive director of the Port Commission. “I’m sure at the time when they purchased it they thought it was a lot of money, but if you look at it over the long term the return on investment is significant. But you had to have the vision to look that far into the future.”

For years that vision was difficult for many to see. Pidgeon, tucked between Interstate 55 and the Mississippi River off Mallory Road south of Downtown, took years to realize its potential and Port Commission officials had to deflect criticism over the years for the park’s slow slog to success. Even though Pidgeon was completed in 1967, decades passed before the first private industry – Birmingham Steel – located at the industrial park in 1995.

“There was no industrial access road,” Richardson said. “Up until that point it was a chicken and egg type of thing. To get the big industries you needed the road and the big industries wanted the industrial access road. Birmingham Steel was big enough to pull in the commitment for the road.”

Today, Pidgeon can boast about tenants that include Electrolux, Canadian National Railway Co., Tennessee Valley Authority and Nucor Steel, which eventually took over the Birmingham Steel site. Now, only 150 acres of the 3,500-acre industrial park are uncommitted.

“Here, they had the vision to say if you build it they would come, they would work, they would contribute to the economy,” said EDGE president Reid Dulberger. “We have a project which is successful today but is on the verge of becoming enormously successful.”

CN will be a major contributor to that success. The Montreal-based company plans on exercising an option to buy 95 acres to expand its Intermodal Gateway-Memphis terminal, which it shares with CSX Corp. on Paul Lowry Road. CN also has an option to buy another roughly 825 acres nearby for a large distribution and logistics park for customers who want to be near the expanded intermodal facility.

“The traffic is picking up and they’ve exercised their option to expand,” Jim Martell of Ridge Property Trust, which is partnering with CN on the development, recently told EDGE and Port Commission officials. “Getting CN to make this additional investment really supports Memphis’ position in the world logistics market.”

Once again, an industrial access road will be a key piece of Pidgeon’s development.

“The concept was very innovative for its time and very impressive. ... You had to have the vision to look that far into the future.”

–Randy Richardson
Executive director, Port Commission

Paul Lowry Road, the main north-south access road in Pidgeon that currently terminates at the intermodal yard, will need to be extended south by just more than a mile for the intermodal expansion and planned distribution center. The extension of Paul Lowry Road would provide a second, southern access point for the intermodal yard.

As CN expands and Nucor and Electrolux continue to grow, the need for more road access will only increase, Martell said.

“It’s a very critical piece of linkage,” Martell said. “The growth of this area is really contingent on providing that outlet. Infrastructure is very important because the amount of traffic that is growing will be significant as success breeds success.”

Paul Lowry Road and Riverport Road, the main east-west artery inside Pidgeon, were created as a result of the Birmingham Steel project.

“Land is important, but if you don’t have infrastructure then investment becomes more difficult,” Dulberger said. “The history of Pidgeon really begins with Birmingham Steel and the construction of the infrastructure to get there. If not for Birmingham Steel and the infrastructure the city invested there, perhaps Pidgeon would still be this vast expanse of undeveloped land.”

Dulberger said EDGE was in the process of hiring an engineering firm to provide a cost estimate for the road extension. CN, capitalizing on the city’s transportation and logistics infrastructure, would double its current intermodal operations and plans for the distribution center call for up to 6 million square feet of industrial space.

“We anticipate strong demand for that space,” Dulberger said.

Touted for years as the largest urban Greenfield site in the country, Pidgeon experienced a long, slow road to its current success.

Birmingham Steel was the industrial park’s first private sector success, but the plant was shuttered in 2000, costing 225 people their jobs and once again leaving agriculture as the dominant industry at the site.

Residents questioned the public investment in the Birmingham Steel project while developers and real estate officials grumbled about the Port Commission asking too much for land inside Pidgeon, but Richardson said Port Commission officials over the years remained focused on long-term investment and producing the highest possible return on investment.

“Whenever you have somebody who wants to buy something from you they don’t want to pay for it,” said Richardson, who first became an administrative manager of the Port Commission in 1990.

“We’re competing with states all over the nation for these large industries and they’re offering all these incentives, including land options.”

Nucor Steel eventually took over the idled Birmingham Steel plant and city and county leaders were able to convince Electrolux to build its manufacturing facility there.

“The whole purpose is economic development and jobs for people and at the end of the day, for what they paid for it and what they’ll get back in tax money, it will absolutely be a positive return,” he said. “If you look back over the entirety of time, it has worked.”

The planned CN expansion at Pidgeon coincides with a proposed 700-acre expansion of Presidents Island, which is also nearing capacity.

Economic development and civic leaders say the projects, which would greatly enhance rail and river transportation while providing for millions of square feet of new developable space, are driven by the same long-term vision that lead to the original creation of Pidgeon and Presidents Island.

“The two projects dovetail very well,” Dulberger said.

PROPERTY SALES 55 127 3,204
MORTGAGES 30 92 2,192