Wednesday, November 26, 2008
Economic Zones World’s plans to lay some 4 million square feet of warehousing and distribution space in Orangeburg County by 2020 is a long-term goal that requires looking past current economic conditions.
But even in the short term, the excitement around the company based in Dubai, United Arab Emirates, might have economic benefits for the rural county that are hard to measure.
Called “derived externalities,” the spin-off from subsidiary Jafza South Carolina LLC’s planned industrial park is the retail, housing and other businesses that are looking to secure a place in what is being billed as the state’s future trade hub.
“People will say, ‘Wait a minute. Here’s one of the best in the world and it’s chosen an inland spot in South Carolina. What are we missing?’ ” said Gregg Robinson, executive director of the Orangeburg County Development Commission. “Why does Lowe’s follow Wal-Mart? Because they know it will be successful.”
The buzz is creating interest outside the state, Robinson said, with a business on the West Coast having called recently about an existing speculative building it found while researching Orangeburg County after hearing about Jafza’s plans.
“That’s what’s so great about the impact, because the quality-of-life issues are those derived externalities,” Robinson said.
A lot is riding on Jafza’s blueprint.
‘Corridor of shame’
The logistics development is planned for an area along Interstate 95 that has been called the “Corridor of Shame” because of the high unemployment and poverty numbers the communities register.
Economic developers and political leaders who gathered in November at the 2008 Orangeburg County Economic Development Summit trumpeted the project as the economic engine that will pull one of the state’s poorest areas out of the doldrums.
“We will develop the wheel today to move these communities forward,” said House Majority Whip Jim Clyburn, D-S.C., one the event’s keynote speakers.
Clyburn said he first started working on a project such as this for Orangeburg County during his initial bid for Congress in 1992. Bringing it to fruition meant scrapping conventional wisdom that the area’s residents were destined to remain in poor conditions, he said.
Looking past the economy
The company plans to turn Orangeburg County into a place where goods from the Port of Charleston are stored and prepped for shipping across the East and Midwest. The location makes sense, planners say, as the Port of Charleston expands its capacity with a new terminal on the former Navy base and inland Charleston is relatively tight on space for this type of project.
Steve Eames, Jafza’s project manager, said that in a dozen or so years, the facilities in Orangeburg County would be able to handle 660,000 20-foot-long shipping containers a year.
By that year, Eames said, the development would have created an estimated 3,765 jobs in Orangeburg County and an additional 1,500 jobs across the state.
But with all the bad economic headlines of late, it’s hard to envision a rural Santee sod farm turning into an international logistics center any time soon.
Eames said the company is moving forward with confidence that market conditions will turn around.
“Let’s get ready for the wave, ’cause it’s coming,” he said.
At the summit, Eames laid out a rough sketch of the company’s development plans, which will be rolled out in phases until 2032. The majority of buildings would be up by 2020, a year Eames called “not too hazy.” At least some facilities, he said, will be out of the ground by 2013. Jafza plans to start designing horizontal infrastructure next year and begin site preparation in late 2009.
Getting in early
Some of the parties interested in securing a piece of the action aren’t waiting until then. The Miller-Valentine Group completed a speculative warehouse facility this fall inside the Orangeburg City/County Industrial Park.
Colliers Keenan, which is charged with leasing or selling the 150,183-square-foot building, notes its proximity to Atlanta and the Interstate 85/385 corridor, but also the major Jafza development that’s on the way.
“Orangeburg will soon be home to the fastest-growing port operator in the world,” broker Hagood Morrison said.
Jafza is a subsidiary of Economic Zones World that aims to create industrial and logistics parks around the world to serve its diverse customer base. The park in South Carolina would serve as Jafza’s entry into the United States, Eames said.
Orangeburg’s Robinson said the company’s potential success in the United States outside of South Carolina would further help solidify Orangeburg’s position in the global supply chain.
“I’m all for it,” Robinson said.
Reach Molly Parker at 843-849-3144.
Tuesday, November 25, 2008
Published Nov. 24, 2008
An otherwise grim economic landscape has had at least one bright spot for taxpayers: State highway officials are getting more bang for the buck on road and bridge improvements.
Buck Limehouse Jr
“This will allow us to move further down our priority list of projects for critical needs across the state.”
H.B. "Buck" Limehouse Jr., S.C. Transportation secretary
The state Department of Transportation’s highway and bridge construction contracts awarded from August through October have come in at $15 million less than estimated.
Transportation Secretary H.B. “Buck” Limehouse Jr. attributed the savings to economic and market conditions that have increased competition among contractors.
The DOT’s experience mirrors the slump in the construction industry. On Friday, the state Employment Security Commission reported that the jobless rate had soared to 8% in October, the highest rate in 25 years. The job shrinkage was led by the construction sector, which has shed 18,600 jobs in the past year.
The recent drop in fuel prices has reduced costs for contractors and also contributed to the lower bids, Limehouse said.
In August, 34 projects were estimated at $61 million. Bids from contractors for all 34 projects were $54 million, $7 million less than the estimate.
In September, 25 projects as a whole were estimated at $42 million. Bids from contractors were $42 million.
In October, 34 projects that as a whole were estimated at $69 million. Bids from contractors for all 34 projects were $61 million, $8 million less than anticipated cost.
“This will allow us to move further down our priority list of projects for critical needs across the state, such as highway resurfacing or bridge projects,” Limehouse said. “Any money saved will go directly toward our state’s transportation system.”
Limehouse said transportation revenue, which comes primarily from gasoline user fees, is down 5% for the fiscal year beginning July 1 when compared with last year. Revenue in September was down 8% compared with the same month in 2007.
Limehouse said DOT administrative cost savings of $18.7 million will be used to maintain highways and bridges.
Oct 17, 2008
Bernard S. Groseclose Jr.
Additional 20 Million Square Feet in Development to Double Industrial Space
CHARLESTON, SC - October 17, 2008 - More than 20 million square feet of Class A industrial space is in development within 30 miles of the Port of Charleston. Now, the South Carolina State Ports Authority (SCSPA) has launched a new tool for importers, exporters and logistics companies to join Charleston’s rapidly expanding distribution center cluster.
A new Web site, www.PortCharlestonDC.com, shows how Charleston’s industrial space is set to double in the next six years. Hillwood, Trammel Crow, Johnson Development, Rockefeller Group, Pattillo Construction, Childress-Klein, Lauth and others have already launched major spec building projects.
One million square feet came on the market recently and has been absorbed. Developers are expected to bring three million square feet online in 2009.
The new Web portal provides project and contact details, as well as intelligence on the Port of Charleston’s distribution and industrial market.
“Everyone is competing for access to the Southeast region,” said Bernard S. Groseclose Jr., president & CEO of the SCSPA. “Based on the tremendous investment we’re seeing, the private sector has great confidence in Charleston’s role as the gateway to the Southeast region. Charleston offers a powerful mix of new port capacity, the deepest channels and superior access to a growing Southeast market.”
The South’s population is projected to expand 43% by 2030, according to the U.S. Census Bureau. The region is a well-established industrial zone with significant production, considerable foreign direct investment and expanding consumption.
Driving the impressive push in private-sector investment is the Port of Charleston’s unique combination of natural and operational advantages. Charleston offers the quickest and most reliable access to the I-85 corridor, which includes the commerce and trade hubs of Raleigh, Charlotte, Greenville/Spartanburg and Atlanta.
Distribution and international transportation are an important focus of the state’s economic development strategy. The state offers incentives to encourage increased international trade, and recently, the S.C. Department of Commerce added a senior project manager to work on industrial investment and the recruitment of distribution and logistics centers.
Beyond the 20 million square feet in the Charleston market, several major projects are underway in close proximity to the port, including in the Orangeburg “Global Logistics Triangle” about 60 miles from Charleston. Projects in this area include Jafza USA’s 1,300-acre site near the intersection of interstates 26 and 95.
The Port of Charleston can accommodate post-Panamax ships today, making it particularly well-positioned for trade following the expansion of the Panama Canal. In addition, construction of a new container terminal in Charleston Harbor is underway, which will boost port capacity by 50%.
“If you are an importer, exporter, 3PL, or site selection consultant, you need to know what’s happening in Charleston,” said Groseclose. “The level of commitment and investment is impressive, and we look forward to serving new cargo accounts through these projects.”
Monday, November 24, 2008
By GENE ZALESKI, T&D Staff WriterSunday, November 23, 2008
ELLOREE -- The Town of Elloree's Web site contains the slogan: "Small Town, Big Ideas."
But some are hoping this small, rural town will be able to keep its attractiveness as a big idea takes hold of nearby Santee.
"I would love for my town to stay an agricultural town," said Keitt Brandenburg, owner of Brandenburg Radio Service. He says he is not too happy about a foreign company investing in the area and bringing more traffic and people to the sleepy town.
"I would not have sold an inch of land if it belonged to me," he said.
Jafza South Carolina, a subsidiary of Jafza International, announced last week its plans to develop a $600 million logistics-industrial park near Santee. The 1,322-acre, five-phase park will include light manufacturing, a public intermodal facility, a truck plaza, warehousing and mixed-use offices and commercial spaces.
The Dubai-based company estimates the project could create about 3,700 direct jobs in the county over the next 12 years and between 1,500 to 2,500 indirect spin-off jobs.
Elloree Mayor Van Stickles says he is all in favor of the Jafza project.
"We want to be an attractive town and a nice place for people to live," he said. "On the economic side, it will make us more attractive for businesses to come and make the downtown area even more alive than it is now."
Stickles, who has lived in Elloree since 1979, said he has seen the town come full circle. Its ongoing downtown revitalization project has created an eye-pleasing town for potential investors.
"We want to be good neighbors to the Jafza project," he said. "We want them to be good neighbors to us."
But Brandenburg, a self-described "old timer," said in his estimation the town peaked about 25 years ago and has declined ever since. He says more people bring more crime.
Stickles said he understands the concerns about the project's potential impact on the Elloree community.
"We could double in size and we would still be a small town," he said. "There is a percentage of people attracted to the small town life that we offer. This is still what we want. We will always have our own identity being Elloree."
Bob Hickman, a longtime Elloree resident and real estate agent, said "At this point in time, there would not be an overwhelming sentiment, not a majority sentiment, of people who would want to see major transformations in Elloree."
"Not that they are against growth but there will be a continuous concern ... amongst the people who lived there and spent their life in that area," he said. "Some people are concerned about the kind of growth that would result in substantial changes to Elloree and their lifestyle."
As a real estate agent, Hickman said he has seen interest in the Elloree market growing.
"I personally know of developer-type of people who are more and more looking at Elloree as a place where they can see a lot of potential and even more of a potential in the future," Hickman said. "Elloree's future largely relates to the revitalization of the downtown area and the historic areas."
As part of this development, earlier this year Hickman and Phil Roland partnered in the planned development of a 32-acre tract of land located on the eastern edge of town. Barkley Place will be a gated community with 60 two- and three-bedroom homes.
Hickman said the engineering and infrastructure work on the Barkley Place project are ongoing with an active marketing campaign planned for the spring of 2009.
"We have more people in the last few months inquiring about the possibility of Elloree," Hickman said, noting most of the property in the Santee area has already been tied down. "It is a natural situation ... that people start looking beyond the immediate vicinity of Santee. It is recognized that Elloree is an attractive area in itself."
Corner Store Elloree Diner owner Raj Patel said he is keeping an open mind and cautiously optimistic attitude toward the Jafza project and its potential ripple effects on the town.
"I have not seen a change," Patel said when asked about the town over the past two years since his arrival. "But I do think people will be able to get the jobs over there (in Santee) and that will expand the economy here locally."
T&D Staff Writer Gene Zaleski can be reached by e-mail at email@example.com or by phone at 803-533-5551. Discuss this and other stories online at TheTandD.com.
Friday, November 21, 2008
Bud Badr’s voice is the kind that falls welcomingly on the ear, much like a good, soaking rain falls on parched earth.
Badr laughs easily and often during conversation, which is a good thing when you consider that as the chief hydrologist of the S.C. Department of Natural Resources, what he’s talking about it is a serious issue — drought.
The availability of water in South Carolina made headlines all summer, especially with regards to business.
Once upon a time, the textile industry boomed in South Carolina, in part because of the availability of water. Though the textile manufacturers have pulled up stakes, several other industries took their place, including automotive and advanced materials. Most recently, Google and mega-logistics operations, such as Jafza International, have put down roots in South Carolina, and all the companies require a plentiful water supply.
With all that economic growth, the state’s population has more than doubled in the past 50 years, bringing the total to more than 4 million thirsty bodies.
Some other facts to consider:
Even though 99% of the state’s water is underground, because of convenience and availability, surface water from rivers and lakes is the source for the major water suppliers in the state.
We share water with North Carolina and Georgia because, even though South Carolina contains all or most of four major river basins, the headwaters of the two largest are in North Carolina and another is in Georgia. This complex issue has already triggered U.S. Supreme Court involvement to ensure that North and South Carolina share the water fairly.
No limitations exist as to the amount of water that can be withdrawn from a river, and groundwater withdrawals are regulated only in coastal counties.
“The question is,” Badr asked, “How much water do you really need?”
He explained that South Carolina has gotten an average of 48 inches of annual rainfall for the past 100 years. “We lose about 36 inches for evaporation,” he said, “leaving approximately 20 inches available in our streams. If we don’t use that, it goes to (the) ocean.”
Badr took a deep breath and continued. “South Carolina’s total use is 5 inches per 31,000 square miles, of which 98 percent is used by hydropower, then by municipalities. If we have that average rainfall, then we have four times what we need — but it doesn’t mean we have it when we need it, because of floods and droughts, and more users with more demand.”
Rainfall is 30% lower than normal and stream flows are at historic lows, according to Badr, which is precisely why we are where we are now.
Badr has co-written a plan for water use in the state, which says in part, “Water is a limited natural resource and is a major factor for economic development.” It also states, “There are regional and temporal variations in the amount of available water and in the demand for water, and there are both intrastate and interstate competing demands for that water.”
To avoid over-allocating and to know how much is available for all sites for future use, Badr said that DNR will be working with the Department of Health and Environmental Control on permitting.
David Baize, assistant bureau chief at DHEC, said, “Droughts are hard to deal with; they cause a lot of grief. But they are typically shorter-term events, even though we’ve been in and out of one for the past 10 years. Dealing with the effects of drought and water management planning can overlap, but they are not necessarily the same thing.”
Columbia businessman Don Tomlin is proposing a new way for developers statewide to do business: make sure large-scale residential projects have schools linked to them.
Tomlin, who developed Lake Carolina in Northeast Richland, among other projects, pledged that he would never again spearhead a major residential project without making schools a centerpiece of the planning.
He urged others to do the same during a meeting Wednesday on schools and real estate with State Superintendent of Education Jim Rex and about two dozen developers, public education advocates and legislators. Tomlin and Rex gathered the group to discuss ways to build innovative environments for learning.
“I’m not going to count on luck again,” said Tomlin, saying he was simply lucky that “great” schools were already part of the landscape at Lake Carolina and in Charleston, where he and his brother developed Park West, a 1,700-acre residential community.
The idea stems, in part, from Tomlin’s frustration with trying to collaborate with local school leaders on master plans for new developments.
But he said he also has been a witness to public school choices that work — such as charter schools and magnet schools, enabling entire communities to benefit.
Good schools drive up property values, Tomlin said.
“The real estate industry needs to give back to education,” he said. “More than making houses, and making lots, they need to innovate, and spend the time, effort and money into education.”
Leaders at the meeting were attentive, but pointed out many concerns with creating the kinds of developments they hope for.
Mainly, developers said they constantly fight a negative perception of their goals. Relationships with local school boards, school funding constraints and lack of legislative incentives also are concerns.
But Rex was encouraged that the two dozen leaders who gathered were willing to do something to help.
They understand, he said, “that you can’t have great communities without great schools, and that that needs to be a part of their concept from the very beginning.”
The concept reportedly is working in Denver, Colo, where education officials and real estate developers are building multimillion-dollar projects that include schools, community services and homes for struggling areas.
That effort was spearheaded by a developer-led nonprofit group, the Foundation for Educational Excellence.
Key players in that effort helped the group see how it could work in South Carolina, something Rex and others say is possible.
Gregg Robinson, executive director of the Orangeburg County Development Commission, said it’s time to consider and do such options in South Carolina.
“We’re seeing some of our brightest students leave,” he said.
Partnerships with businesses, developers and schools can change that, Robinson said.
“What helps sustain communities — is it education or is jobs?” he said. “It’s really one big thing.”
Reach Woodson at (803) 771-8692.
Wednesday, November 19, 2008
Container volume up 6% over same month in '07
Bucking a trend of falling container volume, the S.C. State Ports Authority Tuesday reported a nearly 6 percent increase for October compared with the same month last year.
That's especially significant because perennial rival Savannah, which saw a 15 percent increase in volume in the latest fiscal year, while Charleston lost 10 percent, dropped more than 6 percent year over year for October, local officials said.
Bernard Groseclose, the SPA's chief executive officer, said the upswing last month was reflected in every area of local port business.
"I'm very cautious about a celebration, because it's one month, but I'm also somewhat encouraged by the fact that we're not seeing quite the decline being seen in other ports," he said.
SPA officials reported at a board meeting Tuesday that volume is down 2.3 percent between July and October compared with the same time last year, but that other ports are feeling a greater strain.
Groseclose said the SPA was hurt so much in the fiscal year that ended in June largely because of the business decline experienced by its largest customer, Maersk Line.
He said the SPA's advantage now comes from its various trade routes and the economic buffer created by that diversity. If the agency relied solely on Asian cargo, for instance, current trends would be less optimistic, he said.
"My hope is that we've seen in our trade a bottoming out and can prepare ourselves for some turnaround," Groseclose said. "I'm not suggesting we're at the beginning of this trend and business is going to continue to escalate. I think what we're hearing from our customers is it's going to be some time before we're going to see some real pickup."
He said he doesn't expect any notable changes until "well into next year."
Across the U.S., 2008 is expected to be the slowest year for cargo volume since 2004, according to the National Retail Federation. Projections put total volume down more than 7 percent for the year.
In other business, the SPA board said it will begin accepting bids Thursday for a major security enhancement project at the Wando Welch Terminal in Mount Pleasant.
The multimillion-dollar project will include new infrastructure and electronics, such as "intelligent video surveillance." That means cameras around the terminal would filter out birds flying by but zero in on individuals walking the perimeter.
Federal maritime security regulations put in place after Sept. 11 are the impetus for the project, according to port officials. The SPA will receive $4 million in federal funding.
The board plans to award a contract in December.
Reach Allyson Bird at 937-5594 or firstname.lastname@example.org.
Monday, November 17, 2008
As the Jafza South Carolina project in Santee moves forward, officials say a key component of the infrastructure is development of the interchange at U.S. Highway 301 and Interstate 95.
Currently, the interchange south of Santee is considered a “Texas diamond,” though not like the more traditional diamond-shaped interchanges such as Exit 139 on Interstate 26.
Randy Young, S.C. Department of Transportation Midlands regional production engineer, said of the four interchange options looked at by the DOT over the past year, a traditional diamond interchange would be the most likely “modification” for I-95/301.
“We have not narrowed down an exact interchange,” Young said. “It will depend on our continuous traffic report and the traffic data we gather. “A diamond interchange is the one you start with as the simple design.”
Young said there is no time line as to when construction will begin.
“We are still analyzing the schedule,” Young said. “There are a lot of variables that we will review and nail down before we can estimate when construction will start.”
SCDOT had initially identified four design alternatives for the interchange with a cost of between $37.2 million and $56.8 million, depending on the design. A diamond-shaped interchange would fall on the lower cost estimate at approximately $40 million.
Currently, about $9 million – $3.92 million in federal monies, $3 million from SCDOT and the Lower Savannah Council of Governments, as well as $2 million from the Orangeburg County capital project penny sales tax – have been allocated. U.S. Sen. Lindsey Graham says there is more money coming in from the federal government.
About $1 million more is pending in the Senate for 2009. There is nothing yet pending in the House, said Andrew King, Graham’s liaison to the Jafza project.
“Infrastructure needs to be developed. ... That includes roads, water, sewer and the interchange,” Graham said Wednesday during the Orangeburg County Economic Development Summit, noting that rail will also be a key component. “We can’t rely on trucks. Congressman (James) Clyburn is one of the most powerful men in the House in the history of the state. I am trying to do my share in the Senate.”
Graham said funding beyond the $1 million already earmarked in 2009 depends on needs.
“Whatever money we spend here is going to pay off by a factor of many,” he said. “This is the best investment you can make in this part of South Carolina. It will be up to the private sector to develop the property, but we can help with the road, water, sewer and the interchange to make it a place where the company can do business and be successful.”
“Consider us a partner, but a partner that will not get in your way,” Graham told those gathered during the summit’s morning session. “You give us the game plan, tell us where we need to play and we will fulfill our assignment.”
Alternatives under review include a diamond interchange, a partial cloverleaf and two additional partial cloverleaf designs that include fly-overs in two different configurations.
Transportation officials have estimated that $2 million will be needed in the first year for preliminary design work.
Depending on the start date of the actual work and the design chosen, the estimated amount of money needed for following years is roughly $4 million, $13 million, $13 million and $6 million, respectively.
The price of each of the four alternatives includes a short extension of U.S. Highway 301 near Santee.
County economic development officials have cited the need for a reconstructed intersection, not only for the Jafza project, but also because Santee has just opened a new convention center.
Orangeburg County Administrator Bill Clark said options for the interchange are DOT’s decision. All are still under review.
“They will come forward with a series of public hearings and bring that down to the community and show it to everybody and answer questions,” Clark said. “In the interim, we will construct a secondary access road in the property and access the property from the south. We have two options under review for that as well.”
The access road will allow construction crews to move through the area.
No cost estimate or specifics on the options have been determined.
n T&D Staff Writer Gene Zaleski can be reached by e-mail at gzaleski @timesanddemocrat.com or by phone at 803-533-5551. Discuss this and other stories online at The TandD.com.
Orangeburg County economic development officials say the game plan is in place, the motivational speeches given and now is the time to translate talk into action.
“The future is nothing but a string of nows,” Orangeburg County Development Commission Executive Director Gregg Robinson said, reflecting on last week’s economic development summit. “This is going to be a coordinated effort.”
With Jafza South Carolina planning to proceed with the development of its $600 million logistics/industrial park, there is not much time to waste, officials say. Jafza this week provided more details about its plans to build a 1,322-acre, five-phase park near Santee.
The company plans to break ground on the project in late 2009. It estimates it could create about 3,700 direct jobs in the county over the next 12 years.
Officials say the county must improve its infrastructure to handle the activity from Jafza and potential spin-offs.
Orangeburg County Council Chairman Harry Wimberly said council’s next step will be to have a meeting with Jafza leaders to better pinpoint the company’s specific road needs.
“We have to get a cost estimate on it and work from that standpoint and the funding we have available,” Wimberly said. “I think that will be the top priority for the county.”
The county’s infrastructure is being addressed through the capital penny sales tax. From the tax, $7 million has been set aside for water, wastewater and road improvements within what the county has trademarked the “Global Logistics Triangle.”
About $1 million of the $7 million will be spent on water and wastewater lines from the town of Bowman along S.C. Highway 210 to Interstate 95, Exit 165.
Additional money from the penny tax will go toward tying municipalities in the eastern part of the county to the Lake Marion Regional Water Agency project. Water lines will also be constructed to the John Matthews Industrial Park at U.S. Highways 301 and 176.
In addition, preliminary engineering studies are under way for a 1.5-million-gallon wastewater treatment facility to be built behind the Matthews Industrial Park.
“This is just the beginning,” Orangeburg County Development Commission Chairperson Jeannine Kees said. “The baton has been passed to us and we have to take it and run with it.”
Another issue facing the county is rail access.
“We (the county) can’t put in additional rail, but we can keep all focused,” Kees said. “We realize we have done the preparation and invested in ourselves. It will take a lot of work.”
Jafza believes that by 2020, its project could generate about 50,000 daily traffic trips with about 60 percent of the traffic using the interstates and the adjacent Interstate 95-U.S. 301 interchange.
“Rail is a significant issue,” Robinson said. “For years, with gas being a buck fifty, we said truck to truck. But let’s look at what the future offers. We are telling the people it is coming. We can embrace it or we can benefit from it or we can miss it.”
Currently, the Jafza property has about one mile of CSX rail line. But Jafza and local officials would also like for Norfolk Southern to serve the site.
Without dual access, goods destined for a location CSX does not serve would have to be transferred to Norfolk Southern – a timely and costly endeavor, they say.
Kees said another issue is education.
“We need to identify the types of training we need for the work force,” she said. “This means looking at the educational process of our young people so there are opportunities for them in the future.”
n T&D Staff Writer Gene Zaleski can be reached by e-mail at gzaleski @timesanddemocrat.com or by phone at 803-533-5551. Discuss this and other stories online at The TandD.com.