Enhancing competitiveness

TACOMA INDUSTRIAL DISTRICTS ROLE IN THE LOCAL ECONOMYEllen Walkowiak and Robert LevinCommunity & Economic Development Department

November 2012

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1INDUSTRIAL DISTRICT LOCATIONS2

2INDUSTRY PROFILEIndustrial Classification# Establishments# Workers and % of Tacomas WorkforceNAICS 23Construction581,110 (1.2%)NAICS 31-33Manufacturing2026,287 (6.7%)NAICS 42Wholesale Trade1042,205 (2.3%)NAICS 48-49Transportation & Warehousing702,620 (2.8%)TOTAL43412,222 (13%)Source: WA-ESD33WHY INDUSTRIALManufacturing workers earn $11,325 annually more on average (including pay and benefits) than non-manufacturing employees

Generates considerable economic multiplier

Supports sustainable use of existing assets

Contributes to diversified economy

44MAJOR EMPLOYERS (50 EMPLOYEES)5

5MAJOR EMPLOYERS50 150 Employees (Total of 43 firms)Carlson FormetecGlobe Machine Manufacturing

151 250 Employees (Total of 11 firms)Concrete Technology CorporationGeneral Plastics Manufacturing

251 500 Employees (Total of 3 firms)Bradken FoundryManke Lumber Company

>500 Employees (1 firm)Simpson Investment Company

66PRODUCT INNOVATIONNanomaterials (GR Silicates)

Ultra-high molecular weight polyethylene (Polymer Industries worlds 3rd largest producer)

Ion-charged water to treat inflammatory diseases (Revalesio)77INDUSTRIAL STATISTICS$13 million paid annually to City in B&O taxes

Schnitzer Steel Industries Inc. and U.S. Oil Refining among Citys top 10 B&O tax contributors

$3.6 million paid annually to City in property taxes

12,200+ jobs

$68,806 ($33.08/hour) - annual average manufacturing wage

88Recent ExpansionsCompanyProduct2011-2012 ExpansionBradken Foundry3021 S. WilkesonSteel and iron castingsTotal Jobs: 393$7 million building/equipment2012 44 new jobs (13% growth)In 2013 26 new jobs (7% growth)Targa2628 Marine View DrivePetroleum productsTotal Jobs: 45$35 million2012 5 new jobs (11% growth)U.S. Oil Refining3001 Marshall AvenuePetroleum productsTotal Jobs: 180$15 million rail unload facilityFred Tebb & Sons1906 Marc Street (Port)SawmillTotal Jobs: 762012 16 new jobs (27% growth)General Plastics Mfg. Co.4910 Burlington WayFlexible and rigid foamTotal Jobs: 165 2012 11 new jobs (7% growth)Globe Machine Mfg.701 E. D StreetMachinery and systems; materials handlingTotal Jobs: 122 2012 30 new jobs (33% growth)Precision Machine Works1952 Milwaukee WayMetal structural componentsTotal Jobs: 184 2012 19 new jobs (12% growth)Tucci & Sons3601 Taylor WayAsphaltTotal Jobs: 1502012 20 new jobs (15% growth)TOTALTotal Jobs: 1,315 145 NEW JOBS IN 201299Site-Specific Analysis of INDUSTRIAL Sites in TacomaAreaNet Usable AcresPort: Wheeler Osgood17Port: Commencement Bay6Port: 12th Street35South Tacoma: Pinnacle Foods (Nalleys)22South Tacoma: BNSF75South Tacoma: Super Cell6TOTAL1611010SITE LOCATIONS11

11Site-Specific AnalysisAll sites have good transportation access and can accommodate minimum 50,000 sf buildings

Most sites have minimal environmental liability risk

1212Site-Specific AnalysisSites are not development-ready

Substantial infrastructure investment required in 4 sites

Additional site preparation work on 3 sites

Other site challenges include easements, existing rail or future roadway that would bisect property1313Regional Analysis of INDUSTRIAL buildings/sitesCriteriaTacomaFrederick-sonDuPontPuyallupFifeSumnerKent ValleyLand Area50.1 sq. mi.11.6 sq. mi.5.9 sq. mi.13.9 sq. mi.5.7 sq. mi.7.5 sq. mi.28.6 sq. mi.Building Size (For Sale/Lease)Existing 1,012 sf 162,650 sfProposed 0 sfExisting1,200 sf 181,066 sfProposed: 1,478,000 sfExisting 23,150 sf 630,115 sfProposed 1,838,386 sfExisting 905 sf 580,180 sfProposed 544,683 sfExisting 1,200 sf 501,250 sfProposed 1,343,528sfExisting 1,064 sf 521,674 sfProposed 1,477,489 sfExisting 1,040 sf 1,600,000 Proposed371,417 sfVacancy Rate8.1%11.6%0.7%9%10%15.8%9.2%Building Age (For Sale)15/76 post 19694/15 post 19997 post 1969

4/7 post 20001/1 post 200845/63 post 19692/45 post 199936/37 post 19691/36 post 199926/30 post 196922/26 post 1999112/128 post 19696/112 post 1999Industrial Land (For Sale)24 acres620 acres352 acres239 acres126 acres27 acres142 acresBuildingLease$1.32/sf - $27.00/sf$4.80/sf - $9.30/sf$6.60/sf - $7.26/sf$3.00/sf - $30.00/sf$3.00/sf - $27.12/sf$3.84/sf - $7.80/sf$2.40/sf - $19.44/sf1414Regional AnalysisTacoma is the largest, most urbanized area, but has least industrial land product currently available

Many of Tacomas industrial structures are obsolete80% (61) of Tacomas available industrial buildings constructed pre-1969Nearly 85% (22) of Sumners available industrial buildings constructed post-1999

No building developments are proposed in Tacoma

1515Regional Analysis1616Regional Analysis1717Regional Analysis1818Tacomas Opportunities to Attract INDUSTRIAL InvestmentProximate to growing markets in Puget Sound, Pacific NW, California, China and other areas

Local industrial sites that can be made available for development have excellent transportation accessI-5, SR-509 and SR-7BNSF, UP and Tacoma Rail lines

Adequate backbone utility infrastructure in place

1919Tacomas Opportunities to Attract INDUSTRIAL InvestmentQualified local labor pool

Very competitive electric rates and high reliability

Extraordinary quality and quantity of water available

Supportive business climate and incentivesJob tax creditsFinancing and energy efficiency rebatesBusiness-friendly development process

2020Tacomas challenges to Attract industrial InvestmentLack of suitable, development-ready sites

Antiquated buildings that require modernization

Investment needed in site infrastructure

Few resources and incentives to compete globally

2121recommendationsProactively enable existing companies to expand and support those in jeopardy of relocating in cooperation with EDB and Chamber

Partner with Port to sustain growth of Tacoma companies

Establish Industrial Business Association to retain, expand and attract companies

2222recommendationsSolve development challenges collaborativelyNorth access road to BNSF siteRedevelopment of former Nalleys site

Work with TPU to identify best industrial buildings for energy efficiency upgrades

Market development sites, competitive utility rates, system reliability and business incentives

2323DISCUSSIONQuestions?2424