BENTONVILLE - Wal-Mart’s commitment to return manufacturing jobs to the U.S. from oversees has enticed at least two private groups to build two industrial parks in the global retail giant’s backyard.
Rezoning for part of one development, in regard to28.5 acres on Arkansas 12 across from the Wal-Mart Distribution Center, requires approval from the Bentonville City Council, which is to address the matter tonight. The project is proposed by Glass Investments LLC, for which David Glass, former Wal-Mart president and CEO, is the registered agent.
If approved, it will be called Gateway Park and has the potential to be 83 acres, possibly more, big enough for numerous companies to build state-of-the art facilities of up to 550,000 square feet, according to Gateway Park marketing materials.
Construction of a 150,000-square-foot building is planned to start on the property next month. The structure is being built on a speculative basis, meaning it’s being constructed with no particular buyer in mind, but the Sage Partners real estate firm is looking for prospects. Marketing materials indicate that a great amount of space will be devoted to the storage of goods.
Zoning for the other development, in regard to 18 acres on southeast J Street near the intersection with Southeast 28th Street, was approved by the council earlier this month. The property was owned by the Louise Bishop Revocable Trust but recently sold to the Rogers Warehouse Development LLC, a group owned by Bill McClard, a commercial real estate broker. That deal is expected to close within 30 days. McClard’s group also is building a building of about 220,000 square feet on a speculative basis.
It’s a calculated risk but can be lucrative for those ahead of the building movement, McClard said. The project is not yet named.
“In both cases, these are designed specifically to try to take advantage of some of Wal-Mart’s onshore manufacturing initiatives,” said Bentonville’s community development director, Troy Galloway. “We’re trying to attract some of those small manufacturers in Northwest Arkansas and Bentonville in particular.”
He said Bentonville got “kind of a wake-up call” when Bentonville-based Redman & Associates LLC picked a site in Rogers to send part of its ride-on-toy manufacturing operations to the United States from China.
A year ago, Wal-Mart began efforts to get the suppliers’ manufacturers to return production to the United States or add operations here. The intent is to make products closer to the point of consumption. Rising transportation and labor costs are working against low pricing.
Bill Simon, president of Wal-Mart U.S., pledged the company would buy an additional $50 billion in American-made goods over the next decade.
While two-thirds of the goods sold on Wal-Mart shelves are already made or grown here, the commitment means that by 2023, the retailer will sell 15 percent more domestic products. Categories include sporting goods, storage products, games and paper products.
In addition to Redman, a few others have hopped across the seas to better serve Wal-Mart. Towelmaker 1888 Mills of Griffin, Ga., will sell its goods at 1,200 Wal-Mart stores by this fall. Authentic Comfort, which produces about 20 percent of memory-foam mattress toppers sold in Wal-Marts, and Coleman, which uses U.S. factories for its hard-cover coolers and personal-flotation devices, have already shifted stateside.
As an added incentive, Simon last week announced the creation of a $10 million fund to award grants to forward-thinkers who can help decipher the best ways to attract product makers and make some manufacturing components critical to their operations.
“These private developers have stepped up and are trying to develop some areas in our community so we can take advantage of these initiatives that Wal-Mart is undertaking,” Galloway said.
The supply of viable land zoned for industrial use has diminished within Bentonville’s core, city planners wrote in their report to the City Council for one of the rezonings.
“Most of our buildings were either old or not up-to-snuff for today’s advanced manufacturing or manufacturing in general,” said Tom Ginn, vice president of economic development for the Bentonville/Bella Vista Chamber of Commerce. Most potential clients are looking to hit the ground running rather than wait the seven to eight months it takes to erect a new building, he said.
A recent study of Northwest Arkansas market trends by Xceligent Inc. shows that, in a survey of nearly 28 million square feet of industrial space, the vacancy rate for the fourth quarter of 2013 was 5.4 percent, well below the national rate of 9.2 percent, a figure provided by the National Association of Realtors. Last year began with a 7.1 percent vacancy rate in the first quarter and has hovered between 5 percent and 6 percent each of the remaining quarters.
The study took in all types of industrial-use buildings: light industrial, manufacturing, warehousing, storage and “flex” space, which is gussied-up industrial space. Flex space makes use of glass and has high ceilings and the potential to be climate controlled to suit a variety of uses. While the word “industrial” conjures images of complicated machinery and conveyor belts, the space can also be used for storage, assembly or packaging, among other uses.
Business, Pages 21 on 01/28/2014