Lawmakers decide rail ownership, direct SPA to sell Daniel Island property

By Molly Parker
mparker@scbiznews.com
Published May 14, 2009

As lawmakers scramble to wrap up the current session, state senators sent the governor a massive state budget bill Wednesday that also transfers property rights of a controversial railroad line in North Charleston to a division of the S.C. Department of Commerce.

And in the House, lawmakers overwhelmingly gave key approval to a bill that would have far-reaching financial and governing implications on the S.C. State Ports Authority, forcing the agency to sell its valuable Daniel Island property by 2012, among other things.

Budget bill bequeaths railroad
The exchange of railroad ownership to Commerce from the Charleston Naval Complex Redevelopment Authority — the state entity created to divvy out the land when the Navy base closed — is called for in a one-paragraph amendment tucked inside the budget bill that stretches on for hundreds of pages.

The redevelopment authority is currently in a legal battle with the Noisette Co. over who has rights to the track and the land underneath it.

Noting it is a “very big budget bill,” Gov. Mark Sanford’s spokesman, Joel Sawyer, said the office is “not ready to weigh in on specific provisos yet.” The budget bill requires Sanford’s signature to become law.

Sanford has already promised swift veto action on budget items related to federal stimulus money, but he has yet to weigh in on this explosive regional debate about providing dual rail access to the Port of Charleston’s customers.

Commerce wants the rail line so that S.C. Public Railways has the option of operating an intermodal facility on the former Navy base property and running a rail line through the northern end of the former base — something Mayor Keith Summey opposes and promises to fight in the courts. S.C. Public Railways also says ownership is necessary because it uses the line currently to serve customers on the former base.

“Access from the north exists today,” said Jeff McWhorter, president of S.C. Public Railways. “This just provides ownership of the rail line to S.C. Public Railways of a line we’ve been operating on since the mid-’90s.”

North Charleston officials did not immediately return a call seeking comment.

Sen. Larry Grooms, R-Bonneau, sponsored the amendment. He said previously that the purpose is to preserve the state’s right to run rail out of the north, in case a compromise cannot be brokered allowing Norfolk Southern and CSX equitable access via rail lines to the south of the SPA’s new container terminal.

Meanwhile, lawmakers in the House voted 103-4 Wednesday to move a bill to the Senate that restructures the S.C. State Ports Authority board and mandates the SPA to sell property where it is not operating a terminal, among other things. As it stands, the bill is a drastic departure from the original version sponsored by Grooms, and passed earlier in the session by the Senate. The upper chamber would still be required to sign off on it before it moves to the governor.

The deadline was extended for passage of this bill beyond next week’s scheduled adjournment.

Among the key tenants in S. 351:

• Orders the S.C. State Ports Authority to have its Daniel Island property under contract by 2011 and to close a deal by 2012.
• Deeds the Daniel Island land to the state’s Conservation Land Bank or to Berkeley County — there are conflicting amendments — if the agency cannot sell the property by that year. The SPA owns 1,300 acres there where it had planned to build the Global Gateway terminal.
• Mandates that the SPA sell the now-defunct Port of Port Royal land in Beaufort County by December 2010.
• Requires the port to pay $800,000, or 10% of proceeds, whichever is greater, from the sale of the Port of Port Royal property for the construction of a public boat ramp on the northern end of Broad River in Beaufort County.
• Says that members of the General Assembly can require the SPA staff to turn over confidential materials related to the negotiation and sale of these properties and forbids lawmakers from sharing the information with the public.
• Sets the terms of all current board members to expire Jan. 15, 2011, though nothing prohibits the reappointment of a sitting member. A new governor will be in place by then and would have the authority to clear the entire board.
• Requires the governor to appoint one member to the board from each of six congressional districts, plus one at-large member.
• Establishes that the secretary of commerce and the secretary of transportation serve on the board as ex officio members.

The railroad amendment in the budget bill says:
“Any, track, spur, switch, terminal, terminal facility, road bed, right of way, bridge, station, railroad car, locomotive or other vehicle constructed for operation over railroad tracks … and all associated structures and equipment that was necessary for the operation of any railroad located on an applicable federal military installation … shall be transferred, and immediately vest, in fee simple absolute, to the Department of Commerce, in the Division of Public Railways.”

Orangeburg seeks $278m for Charleston railroad plan

By MOLLY PARKER, Charleston Regional Business Journal Tuesday, May 12, 2009

Orangeburg County has filed a request seeking $278 million in federal funds to help implement a controversial rail plan that calls for construction of an intermodal facility on the former Navy base in North Charleston and running trains through the base’s northern end.

The proposal to U.S. Rep. Jim Clyburn also requests money for a separate intermodal facility on the Macalloy property on the base’s southern end, several rail overpasses in North Charleston and a rail line running into Orangeburg County, where Jafza International is planning to build a massive logistics park.

“Orangeburg and Jafza understand that, unless this issue is addressed and corrected in Charleston, their project is in trouble,” said Jeff McWhorter, president of S.C. Public Railways, a division of the S.C. Department of Commerce that would purchase the Orangeburg rail line, according to the proposal.

Though only a portion of the requested funding is for projects in Orangeburg, McWhorter said, “That was the avenue by which we ended up pursuing money for Charleston, as well.”

The proposal specifies the locations for the rail yards, but McWhorter said he doubts that a federal funding commitment would be contingent upon sticking to those plans. Furthermore, he said, funds were submitted for both rail yards with the understanding “that one or the other would work.”

North Charleston Mayor Keith Summey has promised a legal fight against any state entity that attempts to force rail through the northern end of the former Navy base.

Last week, Summey said he was frustrated that he was not consulted about the federal funding request.

“This is one of those things that annoys you. People don’t talk to you,” Summey said. “I think it’s a little unusual the subject wasn’t broached with us. If the two locations are off the Navy base and in the south end, we’d be more than happy to work with them. I would think they would at least want to talk with us, get our opinion, what-have-you.”

The S.C. State Ports Authority is building a new container terminal on the former Navy base property, and the Noisette Co. has designed a live-work community there — and Summey is adamant that rail not run through that city-backed business and residential development.

The aim of the proposal, McWhorter said, is to secure enough federal funds to build rail yards that would service both of the region’s Class 1 railroads — CSX and Norfolk Southern — and provide them equal access to the Port of Charleston’s customers.

Gregg Robinson, executive director of the Orangeburg County Development Commission, called the rail plan, and the request for federal funds to implement it, “a regional concept to a statewide problem.” The proposal was presented to Clyburn, the House majority whip, who helped spearhead the Jafza project, and to other members of the S.C. congressional delegation, Robinson said.

“The statewide problem is we do not have adequate rail currently and we need to improve it,” Robinson said.

Orangeburg officials also want to ensure that both CSX and Norfolk Southern can service the Jafza project, which includes plans for millions of square feet of warehousing and manufacturing space in that county.

A portion of the requested federal funds is for the potential purchase by S.C. Public Railways of CSX’s line running between Creston and Harleyville adjacent to the Jafza property.

If S.C. Public Railways owns the line, the companies at Jafza could access CSX and Norfolk Southern services through his agency, McWhorter said. As it stands, CSX is “not agreeable to that,” McWhorter said, but the federal money was requested in case the railroad company changes its mind and decides to negotiate.

Robinson said his opinion is not “relevant at this time” about where the rail yards should be situated in the Charleston region.

“What I’m trying to accomplish is of mutual benefit to a number of different parties, and we’re working via S.C. Public Railways to get this accomplished,” Robinson said. “This is a team effort to try to improve our overall approach to be able to handle business.”

Robinson said now is not the time to point fingers about why this plan was not put into place earlier.

“Let’s move forward,” he said. “We know it’s a problem; we have to collectively come together and figure out how to best solve the problem. We are going to continue to lose market share if we don’t fix it.”

On the Web: www.charlestonbusiness.com

Gazeley's G.Park Blue Planet at Chatterley Valley awarded first BREEAM

Global provider of sustainable logistics space, Gazeley, today announces that its new completed £50 million scheme, G.Park Blue Planet at Chatterley Valley, is the first development in the world to be awarded the new BREEAM (Building Research Establishment Environmental Assessment Method) “Outstanding” rating (design stage). This is the highest sustainable accolade available in property development.

On average G.Park Blue Planet scored 85.49%, which classifies it as outstanding under the new tougher 2008 ratings for environmental performance introduced in June 2008. The development scored particularly well under the BREEAM rating in the management, health & wellbeing and water (all 100%); energy (87.5%); and waste (85.71%).

Jonathan Fenton-Jones, Director of Sustainability and Global Procurement at Gazeley said, “Receiving the first BREEAM ‘outstanding’ rating is the highest recognition for Gazeley’s focus on sustainable logistics. With G.Park Blue Planet at Chatterley Valley, we believe we have created an industry blue print for cutting-edge developments. Not only does it deliver significant environmental savings, it also creates total energy and water cost in use savings of up to £300,000 per annum.”

Gazeley partnered with Newcastle-under-Lyme Borough Council and regional development agency, Advantage West Midlands (AWM) to create the world’s greenest logistics developments as part of the first phase of the wider Chatterley Valley park, North Staffordshire.

Located on a former colliery site, G.Park Blue Planet at Chatterley Valley is a 35,500 sq m development that was recently completed. It houses the UK’s first truly carbon positive logistics development, with its own biomass micro power station. What sets this development apart is that 100% of the energy and heat is supplied by renewable sources. This has helped it exceed the UK Governments Climate Change Bill targets for both 2020 and 2050 in 2009.

Paul Gibbon, Director of Sustainability at BRE Global, the developers of BREEAM, said, “Obtaining the first ever BREEAM outstanding is a remarkable achievement. This development scored very highly in all sections of BREEAM and achieved exemplary credits on the key areas of daylighting, reduced CO2 emissions, construction waste management and use of low carbon technologies. What is more the development shows that achieving a high BREEAM standard can also mean lower running costs.”

The sustainability credentials that have led to this prestigious award include:

• Thermally efficient buildings with air tightness and thermal insulation
• Kinetic plates which capture energy every time a vehicle enters or leaves the site
• Efficient systems for further building energy reduction, utilising cutting-edge lighting, maximum use of natural light, under floor heating and an energy panel wall
• The latest solar cell technology implanted into special rooflights which eliminate night time light pollution
• The majority of materials used in the building being either A or A+ rated in BRE Globals’ Green Guide to Specification
• The development targets zero waste send to landfill

Steven Holland, Head of Asset Management at regional development agency, Advantage West Midlands, said, “We’re delighted to see the hard work at G Park Blue Planet being rewarded. It is truly one of the most exciting developments we have in the West Midlands region. This is a tangible example of moving talk about climate change into demonstrable action, and showcases the West Midlands as a region which is embracing the opportunities of the new low carbon era.”

The overall Chatterley Valley park is a joint venture between Advantage West Midlands and the North Staffordshire Regeneration Zone, Newcastle Borough Council, Stoke-on-Trent City Council and Staffordshire County Council. The park totals 70 hectares of land that will be transformed over the next decade, creating a total of around 4,000 jobs.

A Short List of Top Logistics Locations

Which locations are ready to handle your next logistics facility?

Christopher Steele, President, CWS Consulting Group LLC (LDW: Logistics, Distribution & Warehousing 2009)

As global trade continues to change along with fluctuations in the value of the dollar, fuel costs, and the overall state of the economy, several communities stand as true winners in the global logistics game. The lists that follow contain cities that have performed well in diversified screenings in the recent past, are poised to capture significant new volume, or are otherwise likely to be centers of innovative logistics activity.

Of course, as with any ranked list, it is important to note that each and every location decision is unique and reflects the specific requirements of a company as it works to meet the needs of its customer base efficiently. Hence, there are a lot of good locations that will not appear below that will serve as excellent bases of operations for some companies. Likewise, the locations below will not work for every company’s need.

No specific weighting and ranking has been used to develop these lists. While tempting, such a concept would provide a false ranking for the reasons cited above. As a result, these lists are — to some degree
— subjective.

Top - 10

U.S. Distribution Logistics Locations
1. Northern Illinois/Indiana
2. Riverside/San Bernardino, CA
3. North Central Texas
4. Central Georgia
5. Greater Kansas City (KS, MO)
6. Memphis, TN
7. Eastern PA (Lehigh Valley, Scranton/Wilkes-Barre)
8. North Carolina Piedmont
9. Northwest Virginia
10. New Jersey

Port-Related Intermodal Sites
1. Los Angeles/Long Beach, CA
2. Port of New York/New Jersey
3. Norfolk, VA
4. Jacksonville, FL
5. Savannah, GA
6. Charleston, SC
7. Houston/Galveston, TX
8. Prince Rupert, BC
9. Lazaro Cardenas, MX
10. Guaymas, MX

Emerging Logistics Locations
1. Central Ohio (Rickenbacker/National Gateway)
2. Prince Rupert, BC
3. Guaymas, MX
4. Lazaro Cardenas, MX
5. Savannah, GA
6. Winter Haven, FL
7. Orangeburg, SC
8. Fayetteville, AR
9. Toledo, OH
10. Cleveland, OH

Reinvestment in the legacy freight hubs of the United States has gained steam over the past couple of years. In general, the above locations provide access to the largest and/or most rapidly growing consumer bases in the Unites States. All have very strong multimodal connections, and what had been the historic mega rail hubs of Chicago, Memphis, Atlanta, and Dallas from decades past have all experienced new growth in trucking and air, and have seen dramatic new re-investment in rail. This growth has been particularly strong in the Southeast, where investments in new manufacturing facilities, port expansion, and rapid population growth have converged to drive a major need for investment in the distribution network. This is particularly relevant to the regions around Atlanta, Central Florida, and North Carolina. Southern California continues to experience dramatic growth through the repackaging and distribution of goods entering from the Pacific Rim. Other areas such as Eastern Pennsylvania and Northwest Virginia serve as alternate, lower-cost distribution locations to the heavily populated Northeast, while trying to avoid some of the congestion along the I-95 corridor.

Port capacity in the United States is strained, with large investments along both coasts attempting to compensate for limited capacity and increasing regulation at traditional U.S. ports. Los Angeles capacity issues and environmental regulations have spurred growth in both Mexico and Canada as a means to satisfy the need for imported goods from Asia. Also gaining — as a result of Pacific trade seeking easier routes to large U.S. markets — are the new ports of Lazaro Cardenas and Guaymas in Mexico and Prince Rupert in British Columbia. All have direct links to less-congested Class I rail mainlines. Lazaro Cardenas will expect up to 700k TEU per year in Phase I, expandable to 2.0m. Guaymas will be built to a 850k TEU capacity.

Certainly Los Angeles/Long Beach and New York/New Jersey have — and will continue to have —
a very large share of overall port-related activity, but Norfolk, Savannah, and Charleston have experienced and will continue to gain significant growth in the near term due to the size constraints in the Panama Canal. Other facilities such as Melford in Nova Scotia may soon join this list once they become fully operational.

Port-related intermodal facilities create an interesting challenge in that they require new and innovative approaches to utilize limited property available along the waterfront. In the case of most legacy port cities, investigation into agile port systems and other initiatives have become more numerous as the country copes with its current capacity issues. In addition to better utilizing space, ports have also started to become increasingly conscious of the environment. This is most relevant in the ports of Los Angeles and Long Beach, where strict environmental regulations are scheduled to take effect in the coming months and years, with limits on the types of fuel and number of trucks into and out of the port among some of the more stringent guidelines.

As transportation has grown more important, investment is taking place in some expected and, indeed, some unexpected places. Major infrastructure hubs are upgrading facilities and infrastructure to help to improve the ability of goods to flow through their system. The goal for many of these locations is to serve as alternative ports of entry or waypoints to the traditional logistics hubs, allowing those operators to relieve congestion and mitigate the impact of increased population growth and trade on any one particular location.

Two of the largest investments are occurring in the state of Ohio, with Norfolk Southern’s Rickenbacker project and CSX’s National Gateway project. Both are expected to serve as alternatives for multimodal transportation, with an added benefit of mitigating the downturn in the economy by creating jobs in one of the regions most in need. Other areas, such as Toledo and Cleveland, are expected to gain through increased water traffic through the St. Lawrence.

Top - 10

U.S. Distribution Logistics Locations
1. Northern Illinois/Indiana
2. Riverside/San Bernardino, CA
3. North Central Texas
4. Central Georgia
5. Greater Kansas City (KS, MO)
6. Memphis, TN
7. Eastern PA (Lehigh Valley, Scranton/Wilkes-Barre)
8. North Carolina Piedmont
9. Northwest Virginia
10. New Jersey

Port-Related Intermodal Sites
1. Los Angeles/Long Beach, CA
2. Port of New York/New Jersey
3. Norfolk, VA
4. Jacksonville, FL
5. Savannah, GA
6. Charleston, SC
7. Houston/Galveston, TX
8. Prince Rupert, BC
9. Lazaro Cardenas, MX
10. Guaymas, MX

Emerging Logistics Locations
1. Central Ohio (Rickenbacker/National Gateway)
2. Prince Rupert, BC
3. Guaymas, MX
4. Lazaro Cardenas, MX
5. Savannah, GA
6. Winter Haven, FL
7. Orangeburg, SC
8. Fayetteville, AR
9. Toledo, OH
10. Cleveland, OH

In addition to those projects, CSX is investing additional monies into a large intermodal facility in Winter Haven, Fla. JAFZA (Jebel Ali Free Zone Authority) has created a U.S. headquarters near Orangeburg, S.C., and is working to develop a multimodal distribution concept in order to serve the rapidly growing Southeast consumer market. Such developments also provide useful solutions to community environmental concerns and demands for reduced traffic, while serving increasing and changeable consumer demand.

In Texas, Dallas, San Antonio, and the areas along the Gulf Coast are all working to increase capacity both as a means to accommodate a growing consumer base, as well as to accommodate increased container and import traffic coming over the Mexican border from the growing Mexican ports of Guaymas and Lazaro Cardenas. As container volumes shift to these ports, increased development in infrastructure for handling the entry of these containers must be developed. Union Pacific is currently developing an intermodal terminal in San Antonio expected to handle many of these consumer goods. In addition, Southern Dallas is investigating the development of logistics and supply-chain facilities and is already home to Union Pacific’s Southern Dallas Intermodal Terminal, a potential BNSF intermodal facility, and the Lancaster Municipal Airport, a future cargo airport.

All in all, this is a very exciting time to be working with logistics and shipping. Shippers have rediscovered the value of diversity in their shipping options, and this rediscovery results in a host of opportunities for communities and developers in looking to accommodate these changes. Some of the communities on these lists are at the forefront of preparing for these changes and are poised to be real centers of major activity for the next quarter century.

Chris Steele is president of CWS Consulting Group LLC. He was formerly with TranSytems’ real estate consulting group. With over 17 years of direct experience in real estate, location, and development advisory, he has worked with a wide range of industries and users, ranging from banks and high-tech companies through heavy industry and intermodal development.

Making the top 10

By GENE ZALESKI, T&D Staff Writer Monday, April 20, 2009

The Orangeburg County Development Commission touts its trademark Global Logistics Triangle logo and slogan every time it has an opportunity.

Whether it is to a local audience or overseas, the triangle - bordered by Interstate 95, Interstate 26 and U.S. 301 - is a prime selling point for the county's economic development arm.

The promotional efforts have worked.

Orangeburg is listed as the seventh top 10 emerging logistics location in the February/March 2009 issue of Area Development Site and Facility Planning magazine.

The bimonthly magazine touts itself as 'the leading executive magazine covering corporate site selection and relocation." The publication has approximately 45,000 subscribers.

The Orangeburg area was ranked as the result of plans by Jafza Americas to build a 1,324-acre industrial park near Santee.

Jafza is a subsidiary of Jafza International, a Dubai-based Economic Zones World company.

"It is a prestigious magazine and one that is recognized as a voice for the development of the our nation," OCDC Executive Director Gregg Robinson said. "It is one that industries and companies consider as a resource in the site-selection process."

Robinson said the ranking speaks volumes about how Orangeburg, which typically is tied into the Charleston and Columbia markets, has come into its own.

"Being recognized is a large part of Jafza and is also in part due to our Global Logistics Triangle," he said, explaining that development is on the horizon. "It is coming and we have to be prepared from an industrial standpoint and a space component to assist our ports."

The article, titled "A short list of Top Logistic Locations -- Which locations are ready to handle your next logistics facility," was written by Christopher Steele, president, Real Estate Line of Business, TranSystems Corp.

TranSystems is a transportation and logistics consulting company based in Missouri.

Steele says the rankings - though acknowledged as subjective - are based on locations believed to be poised to capture new cargo volumes.

The study notes that Orangeburg and Jafza are working to "develop ... a multimodal concept in order to serve the rapidly growing Southeast consumer market."

"Such developments also provide useful solutions to community environmental concerns and demands for reduced traffic, while serving increasing and changeable consumer demand," the article states.

Orangeburg ranks behind Winter Haven, Fla., and ahead of Fayetteville, Ark., as emerging logistics locations.

Central Ohio (Rickenbacker/National Gateway) ranks as the top site.

In addition to emerging logistics sites, the study also ranked the top 10 national distribution logistics sites and port-related intermodal sites.

The Port of Charleston is ranked sixth in port-related intermodal sites with the Savannah, Ga., port ranked fifth. County officials have said Orangeburg could capture volumes from both ports.

Central Georgia is listed as the fourth top distribution logistics location.

The magazine cites the increasing investments in new manufacturing facilities, port expansion and rapid population growth in the Southeast as driving a major need for investment in the distribution network.

The article goes on to note that port capacity in the United States is strained, with large investments along both coasts attempting to compensate for limited capacity and increasing regulation at traditional U.S. ports.

With increasing congestion at larger ports, Norfolk, Savannah and Charleston have experienced and will continue to gain significant growth in the near term due to the size constraints in the Panama Canal, the article states.

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 TheTandD.com

South Carolina trade mission to visit Dubai and Abu Dhabi

By

Dan McCue on Monday, March 23, 2009

A delegation of 24 officials and businessmen from Orangeburg, the US county in which Jafza Americas is developing its $600 million (Dh2.2 billion), 1,324-acre project, is in the UAE on South Carolina state's first trade mission to the UAE.

The delegation is being led by Lieutenant Governor Andre Bauer and includes representatives of state and local governments and businesses.

It also includes members of the South Carolina legislature, officials from Orangeburg County, representatives of one of the state's largest law firms, it's largest electric co-operative, and the University of South Carolina.

The names of businesses participating in the mission, that arrived on Friday and will visit both Dubai and Abu Dhabi over the next eight days, are being kept confidential by the South Carolina Department of Commerce, which is facilitating the trip.

However, six of the participating companies are receiving "Gold Key Service" from the US Commercial Service during their stay, meaning they will have a series of meetings set up with potential buyers of their products while in the UAE.

The trip pairs South Carolina businesses and officials with potential trade partners in the UAE, according to Kara Borie, spokeswoman for the Department of Commerce.

Later this year, the department will facilitate trade missions to Poland, Columbia, and two missions to Panama.

Last week, the department and South Carolina State Ports Authority announced the state's export total reached $19.8bn in goods sold to 193 countries in 2008, a 20 per cent rise in exports over 2007.

Revamped Jafza plan focuses on Santee

By DAN McCUE, Special to The T&D Thursday, March 12, 2009

The ongoing economic uncertainties of the global economy have caused Jafza Americas to revamp plans in the United States, a move that will put full emphasis on plans for 1,324 acres in Orangeburg County.

Jafza, a subsidiary of Jafza International, a Dubai-based Economic Zones World company, will now focus on the physical development of the central South Carolina site, for the time being forgoing potential projects in Virginia, Ohio and Texas.

“This is not a retrenchment,” said Chuck Heath, managing director and senior vice president of Jafza International, who is visiting South Carolina this week to meet with government and economic development officials as well as representatives of the S.C. State Ports Authority.

“What we have done is take a decision that we want Santee (the community adjacent to Orangeburg, and the one who’s name Heath uses when speaking of the project) to keep moving,” he said. “We’ve got very good friends and supporters here and there’s no reason to stop the project in light of the current economic difficulties.”

Although Health conceded that the timing of when ground will be broken on the project is largely dependent of when the federal government finally gets banks to start lending again, he strongly asserted the economy’s current travails “don’t mean we can’t continue to move forward.”

“Obviously, Santee is still in the development stage. We’re fine-tuning our strategy, but we are not divesting anything. Those projects (in other locations) that we have not committed to have stopped; but if we’ve bought land and have committed, we’re committed. As far as North America goes, we’ve decided to settle all of our resources and assets on Santee.”

A sign of Jafza’s continued seriousness in regard to the project is selection of Nexsen Pruet, which has offices in Columbia, Charleston and Myrtle Beach, to serve as its attorneys here.

In addition, Heath said Jafza is in receipt of its wetlands jurisdictional letter from the U.S. Army Corps of Engineers, which it had to secure before formally applying for development permits for the first phase of the project. The letter deals with wetlands mitigation and other environmental issues.

“We are most definitely making progress,” Heath said. “But in this economy, things sometimes will go more slowly than you might like.”

Continued growth

Speaking directly to the economic global crisis, Heath said the biggest effect in Dubai has been in the property development sector. A major player like Nakheel, one of Jafza’s sister companies, has had to reschedule, postpone and even cancel some projects.

By contrast, Heath said, Dubai Ports, the sister entity most closely aligned with Jebel Ali, Jafza’s massive logistics and warehousing park and namesake, “has been doing extremely well in a difficult environment.”

“We will slow to single-digit growth this year, but we’ll still experience growth,” he said. “Of course, the problem is, we’ve grown accustomed to double-digit growth.”

Jafza itself, meanwhile, is moving forward with the development of phase II of its free zone project in Djibouti, after a phase 1 consisting of light industrial units, warehouses and office facilities sold out.

“It’s the most modern container shipping terminal in East Africa,” Heath said with evident pride.

Its parent company, Economic Zones World, is also moving ahead with business park developments in China and India.

Turning his comments back to the South Carolina project, Heath said in an economic climate where there are limited resources available, it’s important to commit to having your assets generating revenue.

“No matter what business you’re in, whether you are selling ballpoint pens or airplanes, you always need to generate revenue – and that’s another reason to really hunker down and focus on Santee. Right now, I’m sitting here with an asset that’s not generating revenue. And in this climate, I’d rather have only one such property for a short time than two and longer range hopes for development.”

The Santee plan

Clint Murphy, vice president of the Jafza International’s Americas operation, said in moving forward with actual construction, Jafza would likely emphasize building to suit for committed tenants rather than creating building on spec for prospective tenants.

“Obviously, some spec buildings will remain part of the mix as we move forward with the 135-acre first phase of the project, but given what’s going on in the economy right now, we have a little bit less of an appetite for that right now,” he said.

The plan is now to build the first buildings on the site in early 2010.

“Right now I’d say we’re in client/relationship mode, rather than aggressively marketing the site,” Heath said. “I mean, how can you market a site when I can’t tell them precisely where the access road will be or where the utilities are – all of which will become clear later this summer when we expect to reward the design contract?”

“Until then, we’ll continue to introduce potential clients to who we are and what we are doing,” he said. “And that will take place mostly outside of the Middle East, our local market, where Jafza is already a well-known entity.”

As an example of the kind of outreach Jafza is already doing, Heath pointed to a reception hosted in India last month by the S.C. State Ports Authority.

“I was invited to participate and make a presentation and was happy to do so,” Heath said. “It’s all about awareness-building.”

Heath was scheduled to meet for the first time with John Hassell, the ports authority’s interim president and CEO, on Wednesday, and with Gregg Robinson of the Orangeburg County Development Commission on Thursday to discuss continuing such efforts.

The revamping of its strategy was accompanied by the departure of Steven Eames, who has overseen the project since Jafza bought the property for $22-24 million in September 2007.

Eames, a former member of the Australian Special Forces and a veteran of infrastructure planning for three Olympic games, became known as something of a planning visionary through his work on the project.

Over the course of the project’s first year, Eames focused on improving the road and rail efficiencies for the site, believing that those efficiencies would be a value-added, not just for Jafza’s customers, but also for the state of South Carolina as a whole.

His leaving the project comes just days after the Orangeburg County Development Commission began to circulate a proposal to create a $700 million “global logistics corridor” linking the Port of Charleston to the Global Logistics Triangle in Orangeburg, and then to the Columbia Metropolitan Airport, where time-sensitive cargo could be flown out of the state.

“I’m a supporter of the corridor, and frankly, that concept was one of the reasons we made the decision to go with the South Carolina site, as opposed to the two or three others we were looking at back then. If you remember, after we talked to Congressman Jim Clyburn, Gregg and the folks at the OCDC, and heard their explanation of what the logistics triangle and corridor could be, we made a decision on Santee in 24 hours,” Heath said.

Moving forward

The first real day of acting on its new focus will come Thursday, when Jafza Americas will open the requests for qualifications it requested from professional civil engineering firms interesting in competing for the design, permitting and construction administration work for the first phase of what will ultimately be a $600 million project.

Murphy said the design work would include coming up with plans for the roads and utilities that will need to crisscross the Jafza property, and “perhaps the design of some building pads.”

The Request for Qualifications was sent to more than 50 civil engineering firms that have expressed interest in Jafza. Firms receiving the RFQ are mainly from South Carolina, though some are from Georgia.

Jafza will select no more than six firms through a private evaluation process, and only then will those firms be asked to submit requirements to a Request for Proposals.

As Heath indicated, finalization of the RFP is expected this summer.

“Sometimes, given the state of the economy, it seems like we’re working a little harder than we used to,” Heath said. “But in the end, the results will show that it was well worth the effort.”

Dan McCue is an independent business journalist and writer in Charleston.