1

TACOMA INDUSTRIAL DISTRICTS’ ROLE IN THE LOCAL ECONOMY

Ellen Walkowiak and Robert Levin

Community & Economic Development Department

November 2012

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INDUSTRIAL DISTRICT LOCATIONS

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INDUSTRY PROFILE

INDUSTRIAL CLASSIFICATION

# ESTABLISHMENTS

# WORKERS AND % OF TACOMA’S

WORKFORCE

NAICS 23Construction 58 1,110 (1.2%)

NAICS 31-33Manufacturing 202 6,287 (6.7%)

NAICS 42Wholesale Trade 104 2,205 (2.3%)

NAICS 48-49Transportation & Warehousing 70 2,620 (2.8%)

TOTAL 434 12,222 (13%)

Source: WA-ESD

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WHY INDUSTRIAL

Manufacturing 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

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MAJOR EMPLOYERS (≥50 EMPLOYEES)

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MAJOR EMPLOYERS

50 – 150 Employees (Total of 43 firms) Carlson Formetec Globe Machine Manufacturing

151 – 250 Employees (Total of 11 firms) Concrete Technology Corporation General Plastics Manufacturing

251 – 500 Employees (Total of 3 firms) Bradken Foundry Manke Lumber Company

>500 Employees (1 firm) Simpson Investment Company

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PRODUCT INNOVATION

Nanomaterials (GR Silicates)

Ultra-high molecular weight polyethylene (Polymer Industries – world’s 3rd largest producer)

Ion-charged water to treat inflammatory diseases (Revalesio)

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INDUSTRIAL STATISTICS

$13 million paid annually to City in B&O taxes

Schnitzer Steel Industries Inc. and U.S. Oil Refining among City’s 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

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RECENT EXPANSIONS

COMPANY PRODUCT 2011-2012 EXPANSION

Bradken Foundry3021 S. Wilkeson

Steel and iron castingsTotal Jobs: 393

$7 million building/equipment2012 – 44 new jobs (13% growth)In 2013 – 26 new jobs (7% growth)

Targa2628 Marine View Drive

Petroleum productsTotal Jobs: 45

$35 million2012 – 5 new jobs (11% growth)

U.S. Oil Refining3001 Marshall Avenue

Petroleum productsTotal Jobs: 180 $15 million rail unload facility

Fred Tebb & Sons1906 Marc Street (Port)

SawmillTotal Jobs: 76 2012 – 16 new jobs (27% growth)

General Plastics Mfg. Co.4910 Burlington Way

Flexible and rigid foamTotal Jobs: 165 2012 – 11 new jobs (7% growth)

Globe Machine Mfg.701 E. D Street

Machinery and systems; materials handlingTotal Jobs: 122

2012 – 30 new jobs (33% growth)

Precision Machine Works1952 Milwaukee Way

Metal structural componentsTotal Jobs: 184 2012 – 19 new jobs (12% growth)

Tucci & Sons3601 Taylor Way

AsphaltTotal Jobs: 150 2012 – 20 new jobs (15% growth)

TOTAL Total Jobs: 1,315 145 NEW JOBS IN 2012

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SITE-SPECIFIC ANALYSIS OF INDUSTRIAL SITES IN TACOMA

AREA NET USABLE ACRES

Port: Wheeler Osgood 17

Port: Commencement Bay 6

Port: 12th Street 35

South Tacoma: Pinnacle Foods (Nalley’s) 22

South Tacoma: BNSF 75

South Tacoma: Super Cell 6

TOTAL 161

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SITE LOCATIONS

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SITE-SPECIFIC ANALYSIS

All sites have good transportation access and can accommodate minimum 50,000 sf buildings

Most sites have minimal environmental liability risk

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SITE-SPECIFIC ANALYSIS

Sites 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 property

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REGIONAL ANALYSIS OF INDUSTRIAL BUILDINGS/SITES

CRITERIA

TACOMA

FREDERICK-SON DUPONT PUYALLU

PFIFE SUMN

ER

KENT VALLE

Y

Land Area 50.1 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 sf

Existing1,200 sf – 181,066 sfProposed: 1,478,000 sf

Existing 23,150 sf – 630,115 sfProposed

1,838,386 sf

Existing 905 sf –

580,180 sfProposed 544,683 sf

Existing 1,200 sf – 501,250 sfProposed 1,343,528

sf

Existing 1,064 sf – 521,674 sfProposed 1,477,489

sf

Existing 1,040 sf – 1,600,000 Proposed371,417 sf

Vacancy Rate 8.1% 11.6% 0.7% 9% 10% 15.8% 9.2%

Building Age (For Sale)

15/76 – post 1969

4/15 – post 1999

7 – post 1969

4/7 – post 2000

1/1 post 2008

45/63 – post 1969

2/45 – post 1999

36/37 – post 1969

1/36 – post 1999

26/30 – post 196922/26 –

post 1999

112/128 – post 1969

6/112 – post 1999

Industrial Land (For Sale)

24 acres 620 acres 352 acres 239 acres 126 acres 27 acres 142 acres

BuildingLease

$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/sf

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REGIONAL ANALYSIS

Tacoma is the largest, most urbanized area, but has least industrial land product currently available

Many of Tacoma’s industrial structures are obsolete80% (61) of Tacoma’s available industrial buildings

constructed pre-1969Nearly 85% (22) of Sumner’s available industrial buildings

constructed post-1999

No building developments are proposed in Tacoma

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REGIONAL ANALYSIS

Tacoma

Sumner

Fife

Kent Valley

Puyallup

DuPont

Frederickson

0 100 200 300 400 500 600 700

South Puget Sound Industrial Acres Listed for Sale

Acres

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REGIONAL ANALYSIS

Frederickson

DuPont

Fife

Sumner

Kent Valley

Puyallup

Tacoma

0 10 20 30 40 50 60 70

Buildings Constructed Pre-1969 Listed for Sale

Number

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REGIONAL ANALYSIS

Tacoma

Kent Valley

Puyallup

Fife

Sumner

Frederickson

DuPont

0 500,000 1,000,000 1,500,000 2,000,000

New Industrial Building Inventory Proposed

Square Feet

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TACOMA’S OPPORTUNITIES TO ATTRACT INDUSTRIAL INVESTMENT

Proximate 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

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TACOMA’S OPPORTUNITIES TO ATTRACT INDUSTRIAL INVESTMENT

Qualified 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

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TACOMA’S CHALLENGES TO ATTRACT INDUSTRIAL INVESTMENT

Lack of suitable, development-ready sites

Antiquated buildings that require modernization

Investment needed in site infrastructure

Few resources and incentives to compete globally

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RECOMMENDATIONS

Proactively 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

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RECOMMENDATIONS

Solve development challenges collaborativelyNorth access road to BNSF siteRedevelopment of former Nalley’s site

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

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

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DISCUSSION

Questions?