News

GYEDC Seeks Solutions to Need for Industrial

Dec. 3rd, 2012
Joyce Lobeck

Finding the right building for a prospective industrial client is a challenge, one that too often has resulted in Yuma losing out on a new business that would have brought economic growth and jobs to the community. It’s a challenge for which community leaders are seeking new and innovative solutions. Greater Yuma Economic Development Corp. has come up with a three-pronged approach, said Julie Engel, president and CEO of the organization that is tasked with attracting new industry to the area. One is to find users for existing buildings. Another is to form a consortium of developers and property owners to invest in speculation properties. And a third is to pursue a concept of virtual buildings. “Lack of available buildings continues to be the No. 1 impediment to Yuma County’s potential growth,” Engel wrote in the organization’s annual report. “Every project GYEDC works is looking for a solution that is ready for occupancy and will not add to their up-front capital costs.” And they want that solution quickly once they make the decision on where to locate, Engel said. “The appetite for building to suit isn’t there. The companies are willing to invest in equipment and manpower but not buildings.” While it may seem like there’s a lot of buildings sitting around vacant, few meet the requirements of industrial clients, she said. Some of them are zoned commercial and located in retail areas that aren’t appropriate for industry. Other impediments are they lack sufficient power to meet today’s industrial needs, they don’t have adequate water and sewer services or they need ready access to rail service or Interstate 8. Or the building simply doesn’t meet the client’s needs because of space and layout. In the past year, GYEDC had 47 leads that were considering Yuma County for their expansion or relocation projects, Engel said. Of those, 29 percent were looking for 20,000 to 50,000 square feet of space, and 27 percent wanted 100,000 to 300,000 square feet. Yuma County has three available buildings under 70,000 square feet — two are zoned light industrial and one is zoned heavy industrial. All three are missing at least one necessary infrastructure requirement for a manufacturing operation. There is only one available building in Yuma County in excess of 100,000 square feet — the former Meadowcraft building — but it does not have water and sewer onsite and lacks any type of air conditioning. GYEDC had 27 opportunities to land a user in one of these four properties, Engel said, but was unable to do so because any one of them would have required considerable time and expense to meet the clients’ requirements. Jonathan Matheus, an agent with A.T. Pancrazi Real Estate, illustrated some of the challenges he sees. He’s working with an existing light manufacturer who now operates out of three locations in the Yuma area but wants to consolidate in one central location. “They need something bigger and with more power than they have now.” Matheus said the agency also is getting a number of calls from clients who need rail service, “but there are few areas with a rail spur along with the necessary real estate.” And when they do have a rail spur, the tracks may not have been maintained. He noted one location on Avenue 4E north of 32nd Street that has an old rail spur that would cost $70,000 to bring up to standards. In addition, it likely would cost several hundred thousand dollars to bring adequate power to the building there. A nearby building has power but not access to the rail spur. There are, however, a number of smaller buildings available for industrial and warehousing, he said. With today’s sluggish economy and tight lending market, trying to build speculation buildings has its own challenges, said Ken Rosevear, executive director of the Yuma County Chamber of Commerce. “It’s difficult to front a building when you don’t have a tenant in sight,” he said. “It makes financing difficult. Developers are hesitant to put up buildings without a tenant. The old adage ‘build it and they will come’ isn’t applicable in this economy.” That’s why Engel sees virtual buildings as the most viable solution. Virtual buildings are those that have been designed and gone through the permitting process. They would be ready to be built when a tenant is identified, perhaps with only minor modifications to meet that tenant’s specific requirements. It could be ready for occupancy in six months, Engel said. That’s as fast as retrofitting an existing building that could take six to eight months. Joyce Lobeck can be reached at jlobeck@yumasun.com or 539-6853. Find her on Facebook at www.facebook.com/YSJoyceLobeck or on Twitter at @YSJoyceLobeck.

Joyce Lobeck
Staff Writer
The Sun
Dec. 3rd, 2012