CREJ

Page 32 — Office & Industrial Quarterly — December 2020 www.crej.com INDUSTRIAL — SITE SELECTION C olorado has plenty of assets that make it a great place to live and work. Many com- panies choose to grow or relocate here based on char- acteristics such as our outstanding quality of life, central U.S. location with nonstop flight connectivity, low taxes, and an educated and tech-savvy workforce. But lifestyle and demographics – as attractive as they are – aren’t always enough to compete suc- cessfully in a global economy. The events of the last year caused by the global pandemic proved that time and money drive business decision-making, especially in periods of uncertainty. Businesses want to move faster than ever while making the most of their financial resources. Their urgent need to expand is fueled by their custom- ers’ needs, including fast delivery service and reliable broadband con- nections, as everyday activities from school to shopping moved to the virtual world almost overnight. Companies that currently are experiencing explosive growth due to the pandemic must be accom- modated quickly so they can react and expand accordingly. Such companies fall under the following industries: distribution and fulfill- ment centers; fleet operations and warehouses; medical supplies and pharmaceuticals; and information technology and data centers. In recent years, to speed up the site selection process for new or expanding businesses, companies and their site consultants have come to expect real estate options to be certified or shovel-ready in order to increase speed to market and reduce site acquisition risk. As a result, some state and local governments, along with eco- nomic develop- ment organiza- tions and utilities, have developed site certification/ readiness programs to help grow jobs and capital investment in the communities they serve. These site readiness programs involve varying degrees of rigor associated with the necessary due diligence to ensure that the sites are ready for develop- ment. Without such a locally run pro- gram, Colorado was disadvantaged as it tried to compete with states like Virginia, North Carolina, Mis- souri and Iowa for new business opportunities. So, the state’s larg- est electric and natural gas energy provider, Xcel Energy, stepped in to help companies bring capital investment and employment to Colorado. Xcel Energy offers three levels of prequalified properties: certified sites, ready sites and ready buildings. Through these offerings, Xcel Energy’s Corporate Economic Development team evaluates prop- erties that are prime for industrial and heavy commercial development and can accommodate the needs of growing industries. The Site Certification Program is a free offering that allows busi- nesses, brokers, landowners and economic developers to have their available sites evaluated and certi- fied through a robust due diligence process performed by Phil Schnei- der of Schneider Strategy Consult- ing, former chairman and current member of the Site Selector Guild. Key criteria for certification require sites to be a minimum of 40 acres to accommodate large users, zoned for commercial and/or industrial use and have robust power capacity and good transportation access. A rigorous site due diligence pro- cess includes assembling reports and detailed documentation. Key elements are assessed including infrastructure, zoning and transpor- tation access, as well as required studies such as geotechnical and environmental. Data relevant to the business community – includ- ing local demographics, incentives, higher-education institutions and other support services and ameni- ties – also is collected. Having all this documentation in hand can save significant time and legwork for companies seeking to expand or relocate and for the site selectors who work with them. Once the certification require- ments are met, Xcel Energy markets the sites through its website and national network. There are cur- rently more than 40 certified sites in Xcel Energy’s eight-state service area, including over 15 in Colorado, plus two ready sites and nearly 20 ready buildings. These properties are located throughout the Denver metro area as well as in Northern Colorado and on the Western Slope. The Colorado General Assembly has provided an additional tool to make Colorado more competitive in the industrial development market. Under the terms of a bill that was passed and signed into law by the governor in 2018, the Colorado Public Utilities Commission was granted the authority to approve, and electric utilities to charge, economic devel- opment rates, which are lower for commercial and industrial users who locate or expand their operations in Colorado. Xcel Energy’s proposed Eco- nomic Development Rate was sub- mitted to the PUC in August. Despite the pandemic, the industri- al development market is strong and growing in many locations around the country. To keep up with and capitalize on these growth opportuni- ties, real estate professionals can tap into site readiness offerings, which increase speed to market and reduce risk for their clients. Companies interested in reviewing the inventory of available real estate options, and those interested in par- ticipating in its real estate programs, may visit economicdevelopment.xce- lenergy.com for more information. s The importance of site readiness for development Stephanie Henley Corporate economic development manager, Xcel Energy, stephanie.henley @xcelenergy.com C ommercial industrial real estate is a risky business. At each stage of the process, for the developers, architects and contractors working on a project, risks may seem to be unlimited and coming at that them from every direction. Any one of the unknown risks may make a deal unfeasible. Many of these risks are only recognized when site data is made available and reviewed by a knowledgeable partner. Every year throughout the U.S., in the process of environmental and geotechnical consulting, many mil- lions of soil borings and soil and ground water samples are obtained and tested. Each one of these samples has a unique latitude, longitude and elevation as well as unique properties, whether structural or chemical. These tests provide criti- cal data that assist in the evaluation of the risks asso- ciated with site development and construction. The data created in this process historically has been used for the particu- lar development project and essen- tially discarded for future use. But the engineer- ing community is discovering its own “big data” source and is developing the tools to ana- lyze the abundance of historical data. They are learning to combine it with data collected with a particular devel- opment to help the real estate and construction com- munity minimize risks on projects. Unexpected subsurface condi- tions, commonly from contamination in soil and groundwater or unsuitable soft or expansive soils, can add substantial costs and time to development, and such issues can even render some projects not constructible. Such con- ditions can require expensive clean- ups, modifications and the resulting change orders. The environmental and geotechnical consulting com- munity is learning to take advantage of the fact that we have been here before, and, using prior data col- lected in the area, they are learning to predict such risks. Knowing these risks before a project is underway helps to avoid going down expensive rabbit holes and spending valuable time and resources on sites and proj- ects that are not financially viable. But rendering this historical data for its future use is no easy task. This vintage information is not avail- able in digital formats, thus starv- ing the fuel source of today’s data mining machines. Typically, the vast amounts of historical subsurface soil and environmental data is stored in boxes, and little of it has good geolocation correlation. But many engineers and environmental con- sultants see the value to the point where they have gone about the task of exhuming this “lost” data, for the purpose of georeferencing and attrib- uting the data for future use. Today, our industry is beginning to use the computing power and data storage available to allow this data to be stored in the cloud and cataloged in geographic information systems, which then can be accessed to predict site subsurface conditions. In addition to all the private infor- mation developed, like the samples collected in environmental and geotechnical work, there are huge resources of public domain infor- Big data is an unprecedented resource to lower risk Robert Cords, PE Senior vice president, national director, Business Sectors, Terracon, bob.cords@terracon. com Victor Donald, PE Senior vice president, national director, Geotechnical Services, Terracon, vic.donald@ terracon.com Project locations that used to be pins on a map on the wall are now dots on a geographic information systems layer. Please see Cords, Page 36 Site development plans overlain with public wetlands geographic information systems maps.