IIPOD Going Forward. Economic Development Committee. August 6, Source: UP Intermodal Arial (white) UP and Allen Group

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2 IIPOD Going Forward Economic Development Committee August 6, 2012 Source: UP Intermodal Arial (white) UP and Allen Group

3 Purpose To provide background history To describe IIPOD s operating area and major stakeholders To discuss IIPOD s current position in the Regional and National Distribution System To propose a near-term strategic direction for the City and evaluate future opportunities 2

4 Background Union Pacific (UP) Dallas Intermodal Terminal opened in 2005 Located on I-45, South of I-20 interchange in cities of Wilmer and Hutchins Serves primarily as a regional distribution hub for container traffic from the Ports of LA/Long Beach Catalyst for new development in area now known as IIPOD Major developers built large distribution centers between 2006 and 2008 and BNSF Railroad purchased 200 acres for purpose of developing a future Intermodal Facility. (see map on page 5) New development and leasing slowed after 2008 and IIPOD s largest property owner, The Allen Group, entered into Chapter 11 Bankruptcy 3

5 Background (cont) Since 2011, lease absorption has accelerated significantly and 8M sq. ft. of 9M+ sq. ft. of built space is currently occupied. Major tenants include Whirlpool, American Standard, Home Depot, and Kohl's In 2012, The Allen Group emerged from bankruptcy with approximately 1,700 acres Global recession impacts local, national, and international economies, resulting in lesser demand for imported goods and reduced intermodal traffic Growing demand for large Regional Warehouse Distribution Facilities will result in significant new construction activity in

6 IIPOD Operating Area Map 5

7 IIPOD Stakeholders City of Dallas Dallas County Partner Communities: Desoto, Hutchins, Lancaster, Wilmer Developers, Property owners Class I Railroads: UP, BNSF Trucking Companies Transportation Agencies/providers: NCTCOG, TxDoT, DART, TRE Freight Forwarder, shippers Educational Institutions, UNT, Cedar Valley Community College, Paul Quinn 6

8 Current Development Sites 7

9 IIPOD well positioned relative to Regional and National Distribution Networks 8 Source: UP and BNSF Photomerge Allen Group and Kimley Horne and Associates

10 Freight Corridors Dallas is key location for intermodal and truck goods movement in the U.S. (7 routes going through DFW) 9

11 Freight Routes A major hub for truck traffic Significant intermodal rail traffic, but not on Nation s primary intermodal route (LA to Chicago) 10

12 2011 Port Traffic The ports of Los Angeles and Long Beach continue to be the most used ports in the U.S., processing 7.9 M TEUs and 6.1 M TEUs in 2011 Houston is the Nation s ninth busiest container port, with 1.9 M TEU in 2011 Other Texas ports with container traffic include Freeport (57,492 TEU) and Beaumont (3,638 TEU) Since 2006, local, national and world economies have changed and demand for imported goods (and intermodal transportation) has fallen Ports of LA/Long Beach processed 15.7M TEU at the peak in 2006 and 14.0 M in 2011 Port of Houston s traffic has remained constant at 1.8M TEU from

13 Trade Patterns - Significantly more truck traffic than any other mode - Top truck point of origin and destination is DFW metroplex. Other top origins/destinations are rest of Texas and Houston (see Appendix A) - Houston's rail volume is vastly larger than Dallas (industries using Port), but truck volumes are similar (see Appendix B) - Dallas will remain an important Regional distribution hub and current IIPOD development opportunities reflect this 12

14 Recent New Development Activity Major Home Depot expansion opens later this summer Increases facility space by over 1M sq. ft. and produces over 200 jobs Kohl s also opens a 1M sq. ft. regional distribution center in Desoto in late Summer Several other developers actively negotiating with large corporate users with combined distribution facility needs exceeding 1M sq. ft. 13

15 Recommended Near-Term Strategy 1. Capitalize on improving market conditions by creating shovel ready sites $23M of prioritized infrastructure investment supports new vertical development program Funding source is 2006 Bond Program Opens up approximately 2,000 acres undeveloped land Potential build out is 8M sq. ft. and an estimated 2,500 jobs 14

16 IIPOD: 2006 Bond Program Reallocation 15

17 Recommended Near-Term Strategy (Cont) 2. Develop closer strategic ties with UP and BNSF Need Railroad cooperation to implement short haul Rail Freight access to Port of Houston 3. Actively market Dallas sites to developers, commercial brokers, and site selectors Continue to refresh IIPOD website 4. Support Expansion of Foreign Trade Zone (FTZ) designations, as appropriate 16

18 Future Opportunities City will monitor a range of initiatives and activities in different stages of development 1. Implementation of soon to be published Southern Dallas County Infrastructure Analysis (SDCIA) Focuses on water and wastewater infrastructure requirements, flood plain ordinances/regulations and future roadway needs, including the proposed Loop 9 Funding remains a challenge 2. Panama Canal expansion Dredging and widening of Panama Canal will permit usage by larger container ships (2015 completion) Increased cargo container volumes in Houston anticipated 17

19 Future Opportunities (cont) Result will be increased container traffic through DFW Metro area, primarily by truck, but also provides opportunity to explore rail solutions State convened Panama Canal working group (TxDoT, Port of Houston, railroads) to focus on impact of Canal expansion, especially on exports 3. BNSF intermodal facility in IIPOD Existing 200 acre tract purchased for future intermodal development Preconditions are an increase in demand volumes and resolution of existing congestion points in DFW Metroplex to improve rail access to IIPOD (see Appendix C) 18

20 Future Opportunities (cont) 4. Implementation of high speed rail service between Houston and Dallas could enhance rail service to IIPOD area US DoT provided State with $15M to study Central Japanese Railroad actively promoting 5. Additional growth market in Monterrey, Mexico Streamlined and expanded Border Crossing Truck Program Enhanced container security 19

21 Questions?

22 Appendices Appendix A: Top domestic trade partners for Dallas Appendix B: Top domestic trade partners for Houston Appendix C: Dallas-Fort Worth Metroplex Rail Infrastructure

23 Top domestic trade partners Traffic to Dallas for Dallas Traffic from Dallas Appendix A Mode Origin Volume (KTons) Truck DFW Metroplex 145,394 Remainder of Texas 18,826 Houston 7,157 Remainder of Oklahoma 5,501 Arkansas 2,568 Rail Remainder of Colorado 1,837 Multimodal (inc. mail) Remainder of Illinois 1,143 Remainder of Texas 818 Tulsa 689 Remainder of Oklahoma 559 Remainder of Illinois 1,999 Remainder of Oklahoma 1,635 Remainder of Wisconsin 1,024 Alaska 693 Iowa 472 Mode Destination Volume (KTons) Truck DFW Metroplex 145,394 Remainder of Texas 16,735 Houston 7,907 San Antonio 3,031 Austin 1,962 Rail Laredo 432 Multimodal (inc. mail) DFW Metroplex 350 Houston 287 Los Angeles 174 Tulsa 25 Remainder of Texas 718 Houston CSA 679 DFW Metroplex 329 Chicago 238 Remainder of Colorado

24 Top domestic trade partners Traffic to Houston for Houston Traffic from Houston Appendix B Mode Origin Volume (KTons) Mode Destination Volume (KTons) Truck Houston 170,617 Remainder of Texas 13,887 Dallas 7,907 San Antonio 4,584 Remainder of Louisiana 2,893 Rail Houston 14,159 Wyoming 10,814 Remainder of Kansas 7,277 Remainder of Texas 5,651 San Antonio 2,967 Truck Houston 170,617 Remainder of Texas 12,911 Dallas 7,157 Beaumont 4,030 San Antonio 2,546 Rail Houston 14,159 Remainder of Texas 1,606 Chicago 1,437 Louisville 1,174 Los Angeles 1,052 Multimodal (inc. mail) Houston 11,004 Remainder of Texas 4,360 Beaumont 3,142 Multimodal (inc. mail) Houston 11,004 Remainder of Texas 1,375 Remainder of Alabama 731 Corpus Christi 1,793 Beaumont 679 Remainder of Ohio 1,731 Los Angeles

25 Dallas-Fort Worth Metroplex Rail Infrastructure Appendix C 22