Roads, River, Rail Spur Market for Warehouse Space
YOUNGSTOWN, Ohio -- Warehousing and distribution plays a big role in the economy of northeastern Ohio and western Pennsylvania but the industry is driven by more than freeway access and proximity to large markets, development specialists say.
Randy Seitz, president and CEO of Penn-Northwest Development Corp. in Mercer, Pa.; Tracy Drake, CEO of the Columbiana County Port Authority in East Liverpool; and Sarah Boyarko, vice president, economic development, North America, for the Youngstown/Warren Regional Chamber in Youngstown, all cite factors and specific company requirements beyond intrinsic regional assets that influence demand for space.
At any given time, around 500,000 square feet of warehouse space is available in Mercer County, Pa., Penn-Northwest’s Seitz reports. Some of that space is located within the Keystone Opportunity Zone, “which is virtually a tax-free zone,” he says.
Among the available options in the county is the property operated by Yourga Trucking Inc. in Wheatland, which has at least 90,000 square feet of warehouse space and a dedicated rail line that runs from Chicago into the site, Seitz says.
Other available space includes former Westinghouse properties in Sharon; the old Cooper-Bessemer manufacturing plant in Grove City, which has about 100,000 square feet of space available; and the Greenville-Reynolds Industrial Park, which has about another 100,000 square feet available for warehousing, logistics and distribution, according to Seitz.
While he doesn’t have precise employment numbers for the warehouse and distribution industries. Seitze points out that Mercer County’s unemployment is 6.8%, down from 9% a few years ago. He attributes much of that decrease to logistics and distribution centers bringing in companies, particularly in the oil and gas industry.
Penn-Northwest is frequently contacted by companies and consultants looking for locations to base operations so they can comply with new federal regulations on the hours truck drivers are permitted to drive, Seitz says. One such company that selected the county earlier this year was a food distributor, he says.
“Their trucks leave their facility in the Poconos at 7 a.m. and they want those trucks to be back in the facility at the end of the day. So they figured out that the distance they can drive and make that happen puts them right in Mercer County,” Seitz reports.
“We have at least two companies that have chosen Mercer County as a place to locate because of that.”
Location is also key to the growth of warehousing and distribution centers in Columbiana County, says the Columbiana County Port Authority’s Drake.
“We’ve got a major area of inbound-outbound cargo based off maritime,” with 11 private terminals along the Ohio River, he reports. The county’s major warehousing and distribution operations include S.H. Bell Co.’s East Liverpool terminal, the former Parsons Coal terminal in East Liverpool, and Marathon Petroleum Co. in Wellsville.
There are also about 10 trucking companies in the county hauling cargo to and from places, Drake points out. Directly and indirectly, warehousing and distribution operations account for “a couple thousand jobs” in the county, he estimates.
And demand is growing, Drake continues. If he could find more riverfront acreage, he’d have it leased.
“Riverfront property is finite. It’s like diamonds, particularly flat riverfront property,” he says.
“I’m scrambling as fast as I can to find sites for new industries who are interested in distribution. It’s kind of an art form in finding that because they need certain attributes and you’ve got to put them together.”
After desirability of the location and its access to major markets – the Cleveland-Pittsburgh corridor is the fourth largest market in the United States, Drake says – distribution centers are looking at access to multiple modes of transportation, such as truck, rail and barge.
“If you go away from the river, the perfect example would be what’s going on at the former National Refractories site [in the village of Columbiana], which is now a major truck hub,” Drake says. “The port authority looked at that site many years ago as a potential transportation-distribution site and the Stoneburners have brought the project off,” he remarks.
Meantime, the port authority continues to develop its Wellsville Intermodal Facility. “There’s about 2,000 acres of additional ground on the hilltop across state Route 7 that I think will be developed based upon the ability to access the Wellsville Intermodal Facility,” Drake says.
In Mahoning and Trumbull counties, about 1.6 million square feet of distribution center space is available, the Regional Chamber’s Boyarko says.
Several other available properties, including sites once occupied by “big box” retailers, could be converted to warehouse and distribution space depending on the user’s needs, bringing available warehouse space to more than 5 million square feet, she estimates.
One large space that soon will come available is the Toys R Us distribution center in Youngstown. The 244,000-square-foot building is scheduled to complete outbound shipments Aug. 1, company officials reported in June.
For companies that need rail access, the Ohio Commerce Center in Lordstown and the Defense Logistics Agency’s Warren Depot are among the options, Boyarko suggests.
The downsized Gerdau operation in North Jackson provides another option with rail access, demand for which has increased in recent years, she adds.
Other alternatives with rail access include the former RG Steel property in Warren, Castlo Industrial Park in Struthers and Lee Industrial Properties in Masury.
Companies also are looking for buildings with high ceilings so that inventory can be stacked higher “and they want direct highway access for sure,” Boyarko says.
“Outside storage is huge,” she continues. “That’s considered part of warehousing.”
Virtually every oil and gas lead the chamber has received required “a significant amount of outside storage space” for their products, she says. “They’re not going to use interior square footage to store these big pieces of equipment and tanks that are going to be outside anyway,” she said.
An estimated 2,200-plus are employed locally in direct distribution, at centers operated by companies such as Anderson-DuBose Co. and Macy’s. And the total logistics/distribution industry here, including operations such as United Parcel Service and FedEx, represents nearly 4,500 jobs, Boyarko says.
Other active operations include the Kmart Distribution Center in Warren.
Looking at the list of projects the chamber is anticipating could come to fruition within the next 12 to 14 months, 90% of them have some warehouse and distribution component to their process, Boyarko says.
“As you’re aware, we’re a great location for accessing specific markets.”
Pictured: The Toys R Us distribution center in Youngstown soon becomes available for a new occupant. Outbound shipments are scheduled to complete outbound shipments Aug. 1.
Copyright 2014 The Business Journal, Youngstown, Ohio.
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