By Brice Wallace
Salt Lake City’s Northwest Quadrant has both advantages and disadvantages if it is to be developed as an inland port, consultants told a local group recently.
Representatives of Cambridge Systematics and GLDPartners — contracted to assess infrastructure, market demand, site requirements and other factors to determine feasibility for an inland port in Utah — said the area west and southwest Salt Lake City International Airport both north and south of Interstate 80 has access to roads, rail and air service; has up to 6,000 acres available; has multiple property owners; and is in a “robust” industrial market. However, it also has soil issues, is the site of a landfill, faces increased roadway congestion and has environmental considerations.
{mprestriction ids="1,3"}Infrastructure needs alone would cost at least $225 million over time, they said.
“It’s not necessarily a positive or negative story, but it’s enough land to work with,” Adam Wasserman, managing partner at GLDPartners, said during a presentation to the Utah Inland Port Advisory Committee. “[When] we get into the cost of the site prep to make that land sing and work, it starts to get more specific and real.”
Utah officials have been talking about Salt Lake City being an inland port for a couple of years. The University of Utah’s Kem C. Gardner Policy Institute last year delivered a baseline market assessment confirming that Utah meets many of the essential criteria for developing a port. The committee, formed by Gov. Gary Herbert, is working toward formal recommendations to the governor and Legislature next year.
The U.S. already has a handful of such ports, including a few with close access to a seaport. A few others are inland. But none are similar to Salt Lake City, Wasserman said, noted it has multiple property owners, is not next to a large consumption market and is not directly connected to a seaport.
“We’re a different cat,” he said. “It doesn’t mean it’s better or worse. It’s different. And we want to make the point that maybe this isn’t an inland port by the definitions that have been assumed or defined.”
The consultants instead used the term “global tradeport” and stressed that Salt Lake City’s would be “a product, not an area.” And that product, they said, must be compelling for companies considering it for distribution and/or manufacturing.
Lois Yates, partner at GLDPartners, went through scenarios placing Sal Lake City in competition with other cities for an aerospace component and manufacturing facility, a corporate headquarters/manufacturing operation, an e-commerce fulfillment facility, and a regional food distribution center. Salt Lake City topped competing cities in three categories and finished second in the food distribution center.
But Wasserman cautioned that that analysis was not exhaustive and that a Salt Lake City tradeport would need to be more attractive to potential tenants.
“It’s got to move the needle. … Something here has to cause more demand by some significant scale [to] put us on the map,” he said. “We’re going to [need to] win business in markets and supply chains that weren’t going to consider Salt Lake before. … Unless this project creates a certain amount of success, it’s sort of like, why do it?”
For such a tradeport to be successful, it would require 500,000 to 1 million square feet of net new absorption annually over the life of the project, feature manufacturing as well as distribution, have a balance of inbound and outbound cargo movement, and allow its companies to expand in Utah on the site, the consultants said.
“Unless this project is going to generate toward a million square feet of net absorption, it’s not meeting the mark,” Wasserman said. “Maybe it’s higher, maybe it’s lower, but there’s some number there, depending on what the infrastructure costs, the buildout plan is, the whole product development strategy. So, you need to have expectations of that. We need to be able to prove that we can get that.”
Wasserman said development of a tradeport at the Northwest Quadrant would occur in phases, starting with 1,000 acres. It has lots of land available and would be boosted by the fact that Union Pacific has an intermodal facility there that has the capacity to handle additional work. “You’ve got a great asset to start with,” he said. “There’s a lot of communities that would to have what you have, and they just don’t.”
The consultants also stressed that activity at the site be managed by some sort of committee or port authority rather than be just an industrially zoned area with a hodgepodge of development.
“We will hope that this community doesn’t see the Northwest Quadrant as a series of property owners doing their own thing with some public infrastructure in that to enable them to do something,” Wasserman said. “We’d like it to be as specific as it can. … As our investors that we work with tell us, we want to create a product that is so compelling, provides this comprehensive all-in story, allows for growth, shows a connectivity to key foreign supply chain points – those foreign markets – where companies actually want to talk to us.”
Full build-out could take 20-40 years, he said. “If we do this right, it’s not a state or city thing. It’s a state/city/region thing that is a product that has to be known globally. That sounds like a marketing phrase, but let’s create a set of solutions for companies that don’t exist in other places,” Wasserman said.
A few environmentalists were among attendees at the briefing. Wasserman said that with planning, sensitivity and creativity, a tradeport could actually serve as an environmental sustainability model for the rest of the U.S. “We want to make this project stand out and be different so that the community actually wants to welcome it for a long time instead of just worry about it for a long time,” he said.
Committee members asked few questions, but member Steve Price, president and founder of Price Realty Group, a company involved in development in the quadrant, said the area has about 4,000 remaining acres that could be developed — representing what he considers the state’s biggest economic opportunity ever.
“We have to make a choice: Are we going to continue to develop the Northwest Quadrant as it has over the last 45 years … or it is going to be an organized strategy to really develop an asset?” Price asked. “Are we at the point where we can take what’s left out there and come up with a strategy and really develop an asset?”
Price said the quadrant will continue to develop, regardless of a port. “We can see what it is, we can see what it’ll be, but we’ll miss the greatest opportunity maybe in Utah’s history,” he said, calling the port's employment, commerce and tax-generation potential larger than that of the transcontinental railroad, silver mining or the Silicon Slopes technology hub.
The consultants will produce a written report, based on the recent presentation, to the committee by the end of the month. The committee will meet again early in 2018.{/mprestriction}
