Second in a Series

Following comments are from H. C. Bradbury, a professional consultant and Marshall native who has been involved in industrial site selection for more than twenty years. He has led site selection efforts for a five billion dollar Fortune 500 company, and several project teams.

His comments provide clarity and perspective regarding the suitability of the Longhorn Army Ammunition (LHAAP) site for industrial development – and specifically address how two topics recently highlighted in the local media, influence the site selection process and the unsuitability of LHAAP as a competitive site for industrial development:

• Impact of residual contamination

• Weighting of “free land”

Residual Contamination

At the time the site is transferred from the Army to US Fish and Wildlife or other entity, the site will not be fully remediated according to US Army Corps of Engineer officials. The groundwater on the site is contaminated with a variety of contaminants, and these contaminants will be present for years to come. At the time of transfer from the Army, conditions of the transfer will include restrictions to avoid interface or contact with the contamination, such as no wells, no excavations that might encounter groundwater, no growing of edible plants and so on.

When an entity compares the subject LHAAP site to other existing potential industrial sites that have no contamination (whether improved or not), the presence of existing contamination is a significant discounting factor, limiting the competitiveness of the site.

In reality, if it were not for the contamination, the subject site would be comparable to agricultural land due to its absence of infrastructure. Agricultural land with highway frontage is abundantly available in East Texas in large tracts (or assembled in large tracts), at agriculturally based prices and not contaminated. The LHAAP is at a distinct disadvantage as a marketable industrial site due to the residual site contamination and absence of onsite infrastructure.

Further, according to an Army official, "approximately 400 acres (Plant 2 and 3 area) of this parcel is occupied on the surface by concrete foundations and in the subsurface by abandoned piping, water and sewer.   I'm sure that a developer would be much more inclined to take an unoccupied site rather than a site littered with concrete.  The cost of clean-up and the hazard for buried obstacles could be excessive."

Conclusion: Post transfer groundwater contamination and restrictions in developing the site for industrial development does in fact influence plant location analysis based upon the competitive process of site selection, and the abundance of alternative clean sites available, many of which have existing infrastructure, and/or a superior logistical location.

Site Selection Process

When a site selection process is undertaken for a new plant site, site competitiveness is a primary driver, and includes how a specific site (both first time cost and lifecycle costs) compares against other existing sites being considered. In other words, how does each site stack up against the other sites being considered, from a comprehensive lifecycle cost basis?

A matrix is developed to compare each site on a total cost basis that includes both first time costs (land, construction, infrastructure, etc) and operating costs (logistics for inbound and outbound freight, wage differentials to recruit semi-skilled/skilled labor, utilities, etc) during the anticipated life of the plant operations or a fixed period.

The cost of the land is just a small part of the equation, and typically a one-time cost.  During the life of operations, it is the operations related expense differential between varied sites that quickly drive a site selection, not the absence of cost or low cost of the land.

Qualitative factors also weigh in the analysis, which would include acknowledging the potential for incompatibility of locating adjacent to a National Wildlife Refuge. Public relations considerations are especially critical to image conscious firms, especially when brand names are involved.

Conclusion: The question is not whether a site can be developed for industry, but whether it is competitive in the market, as compared to other sites. Factor into this, the marginal demand for such sites, and the stiff and aggressive competition between cities for these few industrial clients seeking new sites, the LHAAP site is not competitive for industrial siting.

I would encourage anyone who states that the subject site is competitive in the market place for industrial development, to provide the supporting data for public review.