By Nora Caley
From the March/April 2023 Issue
Consumers might be returning to stores, but they are also still buying many products online. As with so many other pandemic-related behaviors, online shopping will likely remain popular for a long time. People have realized that few things are more convenient than ordering household staples, clothing, and electronics from their phones and computers, and they continue to fill those online shopping carts.
According to the U.S. Census Bureau’s 2021 Annual Retail Trade Survey, retail sales for the nation increased 17.1%, from $5.5 billion in 2020 to $6.5 billion in 2021. One area of growth was electronic shopping and mail-order houses, which saw sales increases of 15.4%, from $891 billion in 2020 to $1.02 trillion in 2021.
As eCommerce grew during the pandemic, so did the need for warehouses, industrial properties, and even retail stores. NAIOP, the commercial real estate development association, predicts that one of the trends to watch in 2023 is there will be record demand for industrial space. The sector has low vacancy rates because Amazon, FedEx, and other companies leased millions of square feet. While there are several large industrial construction projects planned, demand will remain strong in 2023.
It’s not just online shopping that is driving demand for distribution centers. Regional supermarkets, emerging retail brands, and other entities are building distribution centers as they enter new markets. Retailers that are seeing decreased foot traffic are transforming some of their store spaces into fulfillment centers. Last year’s supply chain constraints inspired many companies to create domestic manufacturing facilities, and to invest in industrial space.
As the demand for eCommerce and distribution space continues, locations are building facilities and emphasizing their regional advantages.
TOMBALL, TX: CONNECTIVITY TO THE WORLD DELIVERS SUCCESS
Tomball, TX is uniquely connected to the world as a premier location for eCommerce and distribution. The region is strategically located only 30 minutes from Houston and the country’s largest port for waterborne tonnage and the fourth largest world airport system. Tomball features easy roadway access through the new Grand Parkway and expanded Tomball Parkway and includes convenient rail access via Burlington Northern Santa Fe (BNSF) Railway.
Tomball’s business connectivity combined with business-friendly principles, a readily available workforce, low taxes, and shovel-ready land underpins a prosperous economic business environment.
Favorably located between Grand Parkway and Tomball Parkway, Tomball has invested in road upgrades, extensions, and connectors to move product and people efficiently. Leadership envisions connectivity as a tactical advantage for businesses relying on timely distribution.
George Bush International Airport (IAH) includes more than 25 airlines and nearly 70 international destinations. Just minutes from the heart of Tomball, Hooks Airport provides chartered flights and fixed-based operator (FBO) services.
Utilizing Tomball’s connectivity, Interchange 249 is located just southwest of the Grand Parkway and Tomball Parkway interchange. The Lovett Industrial development will feature three million square feet of class A industrial and retail space. Macy’s, Inc. will open their 900,000 square-foot distribution center in Interchange 249 later this year, accessing millions of consumers in the fast-growing region.
The Tomball Business & Technology Park, which Business Facilities ranked a top 10 industrial park in the nation, provides quick highway access and claims a place as a strong option for distribution and eCommerce. Operated by the Tomball Economic Development Corporation (TEDC), the master-planned and deed-restricted 99.5-acre industrial park is fully served with all utilities and provides off-site detention.
Kinsley Armelle, an eCommerce jewelry company, chose to locate in Tomball Business & Technology Park in 2021. The company, which produces more than 3,000 products, leases 4,000 square feet of office and showroom and 21,000 square feet of warehouse to meet worldwide demand.
Businesses investing in Tomball point to the area’s capable workforce as a significant advantage. The TEDC coordinates workforce efforts with Tomball Independent School District, Lone Star College-Tomball, and other key stakeholders.
Various incentives are available for Tomball investments. The TEDC provides financial assistance to qualified expanding, new, or relocating companies in the form of cash grants for projects that create or retain jobs. Additionally, the TEDC assists with infrastructure expenditures, such as streets and roads; sewer, gas, and electric utilities; and site improvements.
The City of Tomball utilizes a tax abatement program to stimulate economic growth. Reviewed on a case-by-case basis, the City’s abatements can be for up to 100% for up to 10 years.
From location to land to incentives, Tomball has everything needed for the eCommerce and distribution industry.
Visit tomballtxedc.org for more information.
ROWAN COUNTY, NC: CENTRALLY LOCATED AND GROWING
Rowan County, North Carolina is one of the state’s most connected regions. With abundant rail, road, runway, and port assets, it’s easy to see why companies like Macy’s, Dillard’s, Amazon, and Aldi have chosen this region for distribution operations.
In March 2022, Macy’s, Inc. announced its decision to build an e-commerce fulfillment center in Rowan County. The new facility represents an investment of $584.3 million for the iconic brand and retail industry leader and will create nearly 2,800 jobs. Located in China Grove at the intersection of Interstate 85 and Highway 152, construction of the 1.4 million-square-foot facility began in April 2022.
“We are excited to expand our supply chain into the great state of North Carolina and become a member of the China Grove community, as we continue to build and invest in our omnichannel retail ecosystem,” said Jodi Buhrman, Macy’s Vice President of Process and Engineering.
“This new state-of-the-art facility will further enable us to serve our valued customers with added speed and efficiency and position us for long-term success as a leading omnichannel retailer. We look forward to bringing new, well-paying jobs and opportunities to the China Grove community when this new fulfillment center opens in 2024,” continued Buhrman.
Macy’s operates one of retail’s largest e-commerce businesses integrated with a nationwide footprint of stores and fulfillment centers to deliver a convenient and seamless shopping experience. To support the company’s digital omnichannel strategy, the China Grove Fulfillment Center will account for nearly 30% the Macy’s digital supply chain capacity once fully operational.
one of retail’s largest
e-commerce businesses integrated
with a nationwide footprint
of stores and fulfillment centers.
Rowan County, North Carolina is conveniently situated within one day’s drive of 60% of the U.S. population—providing easy access to customers and suppliers. Highways are a significant transportation asset with same day access to all Eastern U.S. markets via three interstates. I-85 is a major interstate in North Carolina that bisects Rowan County providing convenient access to all parts of the Piedmont Atlantic mega-region.
The region is served by two international airports, Mid-Carolina Regional airport, three interstate highways, two major railroads, and a foreign trade zone. The intermodal facility at Charlotte Douglas International Airport allows for efficient transfer of air freight onto rail and highway networks along the U.S. East Coast. And Rowan County is the center of a 3,200-mile rail network.
There are available parcels of land with nearby interstate access at prices below most of the metro Charlotte region. Rowan County’s low costs for land and distribution workers strengthen the ROI of locating in the county.
At the Macy’s announcement last Spring, Rowan EDC President Rod Crider welcomed the company to the county and spoke to the momentum of investment seen here: “With more than 10 million square feet of industrial space under development along the I-85 corridor, this project win is a sign that Rowan has arrived on the national scene and that there are more big things to come.”
The Rowan County Board of Commissioners endorsed the project by awarding the company an Economic Development Investment Grant (EDIG), a performance-based incentive requiring the company to meet predetermined employment goals before incentives are paid. This EDIG is set to equal an estimated $27.2 million over 15 years. The Town of China Grove also supported the project with a performance-based EDIG worth an estimated $22.4 million over 15 years.
The state of North Carolina also supported the project with a Job Development Investment Grant with an estimated value of $2.3 million, along with a substantial commitment in customized training dollars through the NC Community College System. The North Carolina Department of Transportation will also provide funding for road improvements along Highway 152.
For more information, visit RowanEDC.com.