Gaining Community Approval for Your Next Big-Box Project

Partnerships with local economic developers and other community stakeholders are key to a company getting approval to site a big-box distribution center.

By Benton C. Blaine, Vice President; and Joseph Beasley, Assistant Vice President; Infrastructure and Economic Development, McGuireWoods Consulting LLC

It’s no secret companies are finding it more difficult to locate big-box distribution centers at desired strategic areas and sites. Elongated planning and zoning permitting review timelines, political pressure from elected officials and citizens criticizing the quality of jobs and increased traffic, and restrictive ordinances and technical standards targeting distribution facilities are all challenges that companies face.

Local governments push back on the location of big-box distribution centers in their communities for a number of reasons. Limited land availability within a community’s tax boundaries — specifically limited industrially zoned land — puts pressure on local governments to create restrictions against distribution projects in an effort to attract projects with larger taxable investments and a greater number of higher paying jobs.

According to Cushman & Wakefield’s Industrial Marketbeat reports,1 329.9 million square feet of industrial property was under construction in the fourth quarter of 2019, making leaps to 656.5 million square feet in the second quarter of 2022. As industrial development activity increases, local leaders feel greater pressure to be more selective in what uses are permitted, much less incentivized.

Opposing residents may exert political pressures on governing boards, especially at public hearings for a rezoning or incentive award, by voicing criticisms against heavy truck traffic, industrial building aesthetics, and environmental impacts. Local decision-makers, in turn, may lack an understanding of how companies may mitigate these criticisms and the positive impacts that a distribution project will have on the community in terms of tax base, jobs, and the faster delivery of products to industries and consumers within the region. Local leaders may feel a need to preserve the limited labor remaining in a community for perceived bigger and better projects in the future. Pressure may also come from well-connected and established residents to preserve the existing character of the community by calling for the denial of any rezoning or imposing restrictive ordinances and standards that stunt important job-creating industrial development in the community.

Location Consultant

Architect

General Contractor

Freight Forwarders

Those playing a role in getting the BIG-BOX PROJECT approved include

State/

Regional

Economic Developers Elected Officials

Local Economic Development Agency

Steps to Understand and Mitigate Risk

There is no magic wand or silver bullet to mitigate the risk that a company faces against these criticisms and pressures. However, there are steps that a company may take to first understand the risk associated with a site, effectively navigate these challenges, and secure a strategic location for its project.

Upfront data collection and due diligence will save a company significant time and resources before jumping in too deep. First, a company should consider meeting with a site selection and government relations consultant. Such consultants have extensive experience navigating the challenges described above and negotiating infrastructure and economic development incentive agreements on a company’s behalf. They can anticipate and prepare for challenges that a company will face because they’ve walked other companies through the same process.

Consultants and a company’s allies involved in the process can commit to nondisclosure agreements to secure a company’s confidentiality. Confidentiality is important for protecting a company’s strategic decisions from competitors, preserving negotiating leverage on land/building costs, and is imperative in controlling a company’s narrative when introducing a project to a community.

Next, the company should identify and meet with an architect and general contractor. It’s helpful to identify a reputable architect or general contractor that has, or can acquire, local knowledge where the project is targeted. Familiarity with a local government’s development standards, permit review, approval processes, and key decision-makers will all help a company achieve approvals for its project site. Professionals with this local knowledge are allies that can help a company penetrate the market.

The company should determine what local freight forwarders are already established in the community and engage with them. They’re already operating and managing logistics in the market and can provide insight on current market conditions in the area. Consider proceeding in stages, but if a company struggles with this step, it’s again a good idea to consider leaning on the team you’ve built who are familiar with this kind of legwork. Again, this kind of upfront data is important in deciding whether or not the location is worth continued attention, analysis, and resources.

Engaging Economic Developers and Elected Officials

If a company has a specific state or region in mind for the project site, then it may engage a state or regional economic development agency. If a company has already zeroed in on a specific community, then it may opt to engage a more local economic development agency that can introduce it to the community’s priorities, concerns, and pitfalls, as well as guide it in proposing solutions. A community profile presentation by a local economic developer provides a good background for the company, but also allows the company to better understand the community’s identity and what it is proud of. This is important for future relationship building.

A local economic developer will also typically be an advocate for the project and introduce the company to important local elected officials, planning and zoning administrators, regulators, and other decision-makers. A company can secure greater confidentiality and avoid public records by meeting in person or via conference call with an economic developer and using a project code name in written communications. It is a best practice to assume that every email sent has the potential to be used in a story aimed at changing the narrative of the project.

These introductions and meetings can begin before a specific site has been identified or after a target site is selected. Local governments are incentivized to encourage new industrial development in their communities to broaden their tax base and lower the tax burden on voting residents. They’re often eager to point a company’s project team to sites that are considered more development-ready (e.g., sites already zoned appropriately, located in a business park with similar industries, have necessary utilities in place, and are less likely to face public opposition). An economic developer can provide an overview of a community’s available labor and workforce. If there’s a labor gap, then an economic developer may be able to make connections with a local community college system that can develop certifications and curriculum to prepare a ready workforce for the company (e.g., Certified Logistics Technician curriculum).

Beyond bringing together the most basic local government staff (i.e., from planning and zoning as well as utility providers), a trusted local economic developer can help a project team dive deeper into a local government’s site and building plan review process and serve as an advocate throughout. Some local governments have a development review committee that comprises all local government departments involved in site and building plan review and approval — planning and zoning, fire, engineering, water resources, etc. — that may provide feedback on preliminary concepts, sketches, and plans before requiring any type of formal plan submittal. This will allow a company’s project to get in front of major hurdles and obstacles that can further

delay the plan review process and will save the design team time and money on more developed plans.

The company’s project team should also identify elected officials when a community is targeted and consider building relationships and educating them on the need and benefits of the project. Like the economic developer and other allies, elected officials can help steer a project to a site that is more development-ready, warn against potential pitfalls, and explore solutions. They can also exert pressure over local city and county management to ensure local government staff provide timely and appropriate responses to questions and concerns.

Making the Benefits Known

Ultimately, education is the most powerful tool that a company’s project team can wield. When all of the actors discussed above understand the role a company’s project will play in benefiting the local economy and quality of life, they will be more eager to find solutions to regulatory hurdles, influence public sentiment, and expedite the entire review process. Identify and share relevant and latest studies that justify the demand for distribution. Be able to explain the negative impacts that a lack of distribution has on a community’s ability to receive products and attract other industries and development. Develop an investment analysis that shows the additional tax revenue the project will create for the community. Close relationships with allies in the community can help a company be prepared for tough questions such as those about heavy traffic. Many state and local agencies that govern roads will require a traffic impact analysis during the plan review process, which will determine any required roadway improvements.

A company’s project team that has invested in relationships with and educated local government officials will have a team of problem-solving allies who are ready to find creative solutions to site and plan review challenges. For example, if a prime greenfield site faces too much political pressures against a distribution project, officials may be able to help the company identify a site that has surface-level issues — such as wetlands — that can be mitigated and overcome and may also involve less political pressures. If limited remaining land is precious to a community, decision-makers may be open to exploring ordinance changes to reduce setbacks and allow taller buildings to maximize a smaller site and minimize amount of land in a community used for distribution. Companies that engage economic developers and exercise key tactics to educate stakeholders and build consensus within the community will be on a clearer path to securing a desired and strategic site. n

1 https://www.cushmanwakefield.com/en/united-states/insights/us-marketbeats/ us-industrial-marketbeat

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