Industrial Market Analysis
and Land Use Strategy
Advisory Committee #4
May 21, 2009
Presented by:
Economics Research Associates
Interface Studio, LLC
ICIC
DMJM Harris
CH Planning
DRAFT - For Discussion Purposes Only
Project Flow
October
2008
Baseline Market
Conditions &
Trends
December
2008
Initial Clusters
& Targets
March
2009
Industry Cluster
and Economic
Profile
April /May
2009
May/June
2009
Draft Economic
Strategy
Final Plan &
Strategies
Infrastructure
Baseline
2
District-Level
Mapping
District Profiles
Land Use
Strategies
Agenda
•
•
•
3
Philadelphia’s Industrial Sector
Growth Projections
Policies/Tools
Defining Industrial
4
The City’s Industrial Sector
• 104,300 industrial jobs, approximately one out of every five jobs in
Philadelphia
• Industrial jobs employ a range of Philadelphians – highly skilled, technical
positions to entry-level apprenticeships to career-path positions for unskilled and
semiskilled workers
• Compared to retail and service jobs, industrial jobs often provide higher wages
and better opportunities for skills development and career advancement; e.g.
average wages for industrial jobs in the city are $51,024
• Annual payroll of over $5 billion; direct economic output $47.8 billion
• Annually contributes $323 million in taxes (BPT, property, wage, and sales)
• Despite the opportunities afforded by industrial employment, over the last 10
years – 128,418 jobs in 1998 to 104,300 jobs in 2007.
5
Industrial Districts & Corridors
17,805 acres are zoned industrial city-wide
15,433 acres are concentrated in 15 districts
9,355 acres are currently zoned and used for industry
6
Leads to Several Questions
First…
• The industrial sector is a critical component of a healthy and prosperous
Philadelphia.
• The City’s industrial land offers employment opportunities for residents,
creates and supports jobs in other sectors, and generates taxes that
sustain Philadelphia’s quality of life.
– What is the industrial growth potential?
• The industrial base is diversified. Which industries…
– Are the best fit with Philadelphia’s strengths and assets?
– Could benefit most from policy interventions?
Then…
• What interventions can help grow and retain industrial employers?
• Where should we retain and focus industrial development?
• What industrial areas can be opened up to other land uses?
7
Agenda
•
•
•
8
Philadelphia’s Industrial Sector
Growth Projections
Policies/Tools
Measuring Long-Term Demand
9
Evaluating Target Clusters
10
Step
1
2
3
4
5
Assessing the critical needs & requirements
11
Step
1
2
3
4
5
Real Estate Products
Step 1: Identify standard industrial real estate products & profile.
Philadelphia County Inventory:
Flex: 133 buildings & 4,375,000 sf
Warehouse: 2,058 buildings & 114,503,000 sf
Warehouse (200k sf or more): 118 buildings & 44,816,000 sf
12
Source: CoStar 4-27-09
Step
1
2
3
4
5
Industrial Land Demand
13
Step
1
2
3
4
5
Industrial Land Inventory
• Supply includes vacant, underutilized, and for-sale properties.
• 32% of supply is concentrated in 3 large parcels
14
Step
1
2
3
4
5
Agenda
•
•
•
15
Philadelphia’s Industrial Sector
Growth Projections
Policies/Tools
Industrial Policy Objectives
16
•
Encourage industrial economic activity in the city
•
Increase the number and quality of jobs available to city
residents
•
Retain and optimize the use of the city’s’ industrially zoned land
•
Allow unsuitable industrially-zoned land to transition to other
uses
•
Increase the city’s revenues from industrial activity
Key Clusters are Concentrated in Districts
Source: Hoover’s, Interface Studio
17
Areas of Intensity
• Based on BRT
Assessment Data and
Market Trends
• Employment
Concentrations
• Vacancy Patterns
18
Areas of Intensity
• Based on BRT
Assessment Data and
Market Trends
• Employment
Concentrations
• Vacancy Patterns
19
Areas of Transition
• Based on BRT
Assessment Data and
Market Trends
• Employment
Concentrations
• Vacancy Patterns
The gray area needs
careful consideration
20
Several Strategies to Achieve Objective
21
1.
Re-Zone and Redistribute Industrial Land
2.
Reposition Underperforming Industrial Areas
3.
Market the City to Industrial Businesses
4.
Capitalize on Philadelphia’s Hospitals and Universities
5.
Active Reuse of Aging Industrial Giants
6.
Reinvigorate Traditional Manufacturing
7.
Green the Districts
Re-Zone & Redistribute Industrial Land
• Simplify and develop new industrial zones
emphasizing character of use
1.
2.
3.
4.
5.
6.
22
Heavy Industrial
General Industrial
Light Industrial
Industrial-Commercial Mixed Use
Industrial-Residential Mixed Use
Utility and Transportation Infrastructure
Strategy 1
2
3
4
5
6
7
Recommended Typologies
Classification
Character
Impacts
Heavy Industrial
Least restrictive – Petroleum
processing, storage, terminals
Low FAR – slack space,
tanks, pipelines
Most permissive - high noise,
odor, vibration
General Industrial
Manufacturing, distribution,
processing, industrial park
Mid FAR – large footprint,
substantially buffered
Permissive – noise, vibration,
odor, hours, traffic
Light manufacturing,
assembly, fabrication, office,
R&D, small wholesale, local
distribution
Small FAR – mid footprint,
subdivision of buildings,
business / industrial park,
workshop; some buffering
Localized noise, traffic,
activity
Commercially-driven mix of
locally-serving quasi-industrial
(eg, ethnic food wholesale,
local fabrication & repair,
construction supply), and
commercial
Variety in scale & use.
Typically smaller footprint,
along commercial corridors
Localized noise, traffic,
activity
Artisanal, creative, workshop,
small manufacturing &
fabrication compatible with
traditional neighborhood
residential and commercial
Small scale, reuse of existing
building stock, flexible
Minimal
Power generation, water,
waste treatment; rail yards,
ports, airports
Varies. Form follows function
Fixed impacts – includes
odor, traffic, noise, high
activity
Light Industrial
Commercial Mixed-use
Residential Mixed-Use
Utilities & Transport
23
Uses
Strategy 1
2
3
4
5
6
7
Applying the Zones
24
Strategy 1
2
3
4
5
6
7
• Establish Planned
Industrial Districts –
4,094 acres
• These areas receive
regulatory support and
“market certainty” that
land use policy will
remain industrial
• Revise zoning to prohibit
non-industrial uses
• Identify and coordinate
capital and infrastructure
needs necessary to
ensure long-term
economic viability
25
Strategy 1
2
3
4
5
6
7
• Establish transitional
areas that would allow
non-industrial uses
after careful evaluation
– 937 acres
• Manage changes in
transitioning areas
• Allow changes for nonindustrial uses only if
certain jobs-producing
or other public policy
goals are achieved
• Provide amenities that
are necessary to
promote non-industrial
uses
26
Strategy 1
2
3
4
5
6
7
Reposition Underperforming Districts
• Create sub-district
specific master plans
– 2,046 acres
• Reposition and rezone sub-districts for
targeted users
• Assemble and market
properties
• Targeted
Infrastructure
improvements
• Allow higher densities
to retain and grow
targeted jobs
27
Strategy 1
2
3
4
5
6
7
• Existing industrial
zoning – 2009:
17,805 acres
• Proposed industrial
zoning: 12,003 acres
• Proposed mixed-use
zoning: 937 acres
• DIFFERENCE: 4,865
acres
28
Market the City to Industrial Businesses
• Develop targeted marketing programs
– Re-name certain industrial districts to reflect each
area’s primary characteristics, focus, or niche
– Market PIDs and other industrial districts to business
that are expanding or relocating
– Participate in Infill Philadelphia
– Advocate for a “Made in Philadelphia” weekly column
in a local paper that highlights local manufacturing
• Develop new tools to showcase and market districts
and parcels
– Develop a web-based mapping program linked to GIS
that enables property searches for potential and/or
expanding businesses
• Create recruitment/retention lead to navigate
regulatory landscape
– Create industry and or cluster-specific desks within
PIDC for the most complex target clusters – e.g., biopharma & medical device – but also transitioning
traditional industries, especially apparel and
publishing and printing
– Targeted assistance with cost containment
29
Strategy 1
2
3
4
5
6
7
Capitalize on Health and Education Sectors
• Create space for R&D for Biopharma, Medical Devices, etc between the Airport
and Penn / Drexel – targeted acquisition and investment to catalyze
redevelopment
– Re-name certain industrial districts to reflect each area’s primary characteristics,
focus, or niche
– Create or incent small incubator space for biopharm and medical devices
• Strengthen University:Industry linkages
– Workforce training program and work closely
– Commercialization programs to retain and secure startup space
• Explore viability of targeted tax credits for high-wage industries
• Re-use Center City printing and publishing space for biopharm/medical device
front offices and/or lab space for medical devices
30
Strategy 1
2
3
4
5
6
7
Active Reuse of Aging Industrial Giants
• Develop a focused program for local, small artisanal uses
– “Made Local” economic incentive?
– Undertake a study to analyze the fiscal impacts of Philadelphia’s small
manufacturers and specific interactions between small, local manufacturers in
inner-city industrial districts
• Financial incentives for reuse
– Consider gap financing for adaptive reuse projects
• To retain city industrial base in vital neighborhoods, evaluate no-net-loss
provisions to ensure productive space is retained
31
Strategy 1
2
3
4
5
6
7
Reinvigorate Traditional Manufacturing
• Develop targeted cluster strategy for retaining
traditional manufacturing
– Meet with industry leaders, including lead firms as
well as key institutions (e.g., Philadelphia
University), that can provide leadership for a cluster
strategy
• Assist firms/clusters in assessing market
opportunities
– For stronger industries like apparel, identify new
growth areas, such as fabric design and apparel
brokering
– For struggling industries like printing and publishing,
the city should consider leader efforts to identify
new products and markets
32
Strategy 1
2
3
4
5
6
7
Green the Districts
•
•
•
•
33
Develop a set of greening standards for industrial use
Work with PWD to improve storm-water management
Integrate energy production and link with GreenWorks goals
Promote targeted waterfront access along Delaware
Strategy 1
2
3
4
5
6
7
Summary: how to get there
1. Re-Zone and Redistribute Industrial Land
–
A targeted and simplified zoning code
2. Reposition Underperforming Industrial Areas
–
New zones for targeted clusters
3. Market Industrial Use
–
Active programs to encourage focused development
4. Capitalize on Philadelphia’s Hospitals and Universities
–
Spearhead new programs to develop new clusters
5. Active reuses of aging industrial giants
–
Encourage adaptive reuse and “local” & “artisanal” manufacturing
6. Reinvigorate Traditional Manufacturing
–
Developed tailored retention programs
7. Green the Districts
–
34
Build on and integrate the GreenWorks strategies
Summary: the new industrial landscape
Existing
ZONED Industrial 17,805 ac
USED Industrial 9,355 ac
35
Utility & Transportation 3,325
Manufacturing 3,307
Warehousing 837
Wholesaling 381
Construction 239
Other Industrial 1,227
Future
ZONED Industrial 12,003 ac
UTILITY & TRANSPORTATION 4,148 ac
HEAVY Industrial 1,627 ac
GENERAL Industrial 5,511 ac
LIGHT Industrial 717 ac
PLUS, Mixed Use Zones 937 ac
INDUSTRIAL-COMMERCIAL Mixed Use 829 ac
INDUSTRIAL-RESIDENTIAL Mixed Use 108 ac
Thank You!