INDUSTRIAL LAND IN A POST-INDUSTRIAL CITY District of ...

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District of Columbia Industrial Areas Study DC Office of Planning Prepared by Phillips Preiss Shapiro Associates, Inc. To better understand these factors, a survey of industrial users was undertaken for this study. A full summary of the survey results is included as an appendix. Respondents were directly asked about their relationship with DC customers and the factors that favor a DC location. The highlights were as follows: When asked, three-quarters of respondents agreed that their access and proximity to DC customers is a significant advantage, while only 4 percent disagreed. A majority of 86 percent still want to be operating in the District five years from now. A majority of 65 percent achieve half or more of their sales from DC customers. For only 14 percent does this share fall below 25 percent. Nearly 60 percent agreed that their location in DC is an advantage from the standpoint of their customers. Of businesses planning to stay in DC, 38 percent plan to do so due to proximity to their customers. Of businesses planning to depart, only 4 percent are doing so because the move will bring them closer to their customers. Much more important factors for businesses contemplating a move are the cost of land (19 percent) and taxes (20 percent). Proximity to their customer base in all cases outweighed accessibility to their workforce for survey respondents. Clearly, these results further underline the linkage between DC’s PDR businesses and the purchasing sectors of the DC economy. Likely, these relationships are a two-way street: PDR suppliers benefit from the competitive advantage of a DC location, while buyers benefit from reduced turnaround, lower costs, and/or other advantages that decrease the cost and hassle of conducting a business in the District. 2.1.4 INTERVIEWS The data presented above provide an overview of trends within PDR industries. For a more detailed view of what particular industries most desire space within the District, industrial real estate brokers and economic development officials were interviewed. These interviews revealed that the strongest demand for industrial space today comes from the following types of PDR users: Food and beverage services: In addition to traditional alcoholic beverage distributors (required by law to be in the District), newer specialty spirit distributors are seeking space in the District. Another source of demand are distributors to smaller grocery stores, hotels, and restaurants, and distributors of specialty (e.g., ethnic) foods. This latter market is particular strong, but also particularly hard to capture, as it is difficult to meet their requirements. Some are looking for larger sites, 40,000 to 50,000 square feet; many are looking for space with cold storage, all at a competitive cost. Interviews - 31 -
District of Columbia Industrial Areas Study DC Office of Planning Prepared by Phillips Preiss Shapiro Associates, Inc. with the hospitality industry suggest the food distributors most likely to be in the city are those distributing the most perishable products—produce, meat, seafood, baked goods. While the bulk of food products delivered to the hospitality industry are provided by distributors such as US Foods or Sysco (both located outside the District), businesses dealing in products that require frequent delivery are more likely to be located very close to their customers. Transportation: This includes all manner of auto-related uses, including used auto dealers; auto/motorcycle service/repair; tow truck companies; limousine companies (fleet parking); and truck, bus, and auto fleet storage. Since auto repair involves leaving a prime means of transportation at a location for some time, these uses preferentially like to locate close to places where people live or work, and where alternative transportation (buses, taxis) is available. Construction/building services: Demand is typically from small contractors looking for space for building supplies or staging yards. However, it has been reported that contractors needing to store heavy equipment on site are often reluctant to locate in DC due to the fear of vandalism or theft. This underlines the need for greater security in many of DC’s industrial zones. Telecommunications: The combination of the national government, news media, and large office economy makes DC a hub for advanced telecommunications. DC’s industrial zones house satellite dish farms, telco hotels, as well as more mundane tecommunications equipment storage. Verizon is a notable presence in DC’s industrial zones. Waste management services: These services want to be in the District to cut down on transport costs and times. They include trash hauling (truck storage); and transfer stations. These are high-impact uses, and there is obviously little additional space for such users outside of where they are already found. Attempts to capture more of this sector would undoubtedly meet with NIMBY objections. Light manufacturing: Some businesses have expressed an interest in locating in the District, looking to the city for free or low cost PDR space for their operations in exchange for significant job creation. Interviews revealed such interest from a corrugated cardboard assembly operation and an industrial laundry seeking to serve the District’s hospitality industry. Among the sectors identified above, the two that appear to be most promising from the standpoint of attracting desirable and employment-generating PDR users are the warehousing, wholesaling and distribution of specialty foods for the hotel and restaurant industries; and contractors in the building trades. The former is well represented in certain areas such as the Florida Avenue Wholesale Market; and many hotels and restaurants want the quick delivery of perishables that can be provided with a DC location. While the provision of perishable wholesale goods to the hospitality industry is likely to continue, expansion of this market will be limited. Interviews suggest that many hotels’ purchasing decisions are constrained by centralized purchasing agreements made by their national management companies. - 32 -
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INDUSTRIAL LAND IN A POST-INDUSTRIAL CITY District of ...

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