Warehousing, dissecting the arguments for making it DeKalb’s premier industry

I find this whole argument over warehousing quite interesting. From the one side you have those who believe DeKalb can do better than this for its industrial base. For reference, I lean towards this side. There are others who believe that warehousing is the only industry we should seek out.

There have been several arguments for making warehousing our primary industry. The predominant arguments I have heard are, “We need the low end jobs for unskilled workers”, “There are no more manufacturing jobs in the USA, only warehousing”, “Our schools need the funding”, “High tech and other commercial industries bring in workers from the outside who ultimately burden our city and schools”, last but not least, “Any job is a good job and we need the jobs”.

I think we would be wise to analyze these arguments. They all have elements of truth to them. They also ignore important elements of truth.

‘We need the low end jobs for unskilled workers”

It is true, we need jobs for unskilled workers. On the other hand, not all of the residents here are unskilled. The DeKalb population base is blessed with all sorts of skill sets and as a university town, we have a fresh supply workers being produced with skills encompassing many industries. We should consider ways to give the unskilled of the community good marketable skills. Being of a conservative slant, I think programs for this should not only come from the government but also from the business community and social groups as well. Because a person is unskilled, it doesn’t mean they can’t learn a skill. Most people only need to be given the opportunity. I was fortunate that my town, Reading Pa., had a Vo-Tech school where I spent half of each day in High school learning about electronics. There were many fields to choose from, auto mechanics, cosmetology, data processing etc. By the time I graduated from high school I had enough of a skill set to get my first real job as an production technician testing and fixing boards for televisions. It wasn’t much of a skill but I was able to build on it. I’m sure there are plenty of students in the DeKalb High School who, if given a similar opportunity, will be able to become anything they can dream of being.

“There are no more manufacturing jobs in the USA, only warehousing”

The number of manufacturing jobs is ever shrinking in the US as a whole. I’m not sure what the solution to this is, except that we, as a nation, need to fix this. We need to learn new skills and come up with new ideas that we can export to the rest of world for us to keep the standard of living we’ve come used to having. Building our nation up with jobs in an industry that is totally dependent on the US consumer will ultimately kill our towns as well as the nation as a whole. If we do not produce something the rest of the world wants and is willing to pay for, we won’t have any ‘currency’ to pay for all of those cheap imports we demand. This of course spurs an entirely different argument, one which this article is not about. Suffice it to say, we should not put all of our eggs in such a fragile basket.

“Our schools need the funding”

Our schools do need the funding. Warehousing does bring in tax revenues and they do not have many jobs per square foot which keeps the burden on the schools to a minimum. Sadly, from my understanding, the taxes they pay are on the low end of the tax scale. Other industries pay much higher taxes. Warehouses are full of things and have a small number of people moving those things about. Offices have a larger number of people per square foot, and they push very few things around, mostly money and ideas. This naturally means more residents and more kids in our schools. Of course they pay higher taxes to offset this. This flows right into the next argument given.

“High tech and other commercial industries bring in workers from the outside who ultimately burden our city and schools”

Other industries, such as high tech and financial, do bring in workers from outside of the community. So what? We can pretty much expect the population of DeKalb to grow even if we didn’t have one new job to offer. I believe it is estimated that the population of the city is expected to reach 50,000 by 2010 or maybe it was 2015. The time frame is not as important as the estimate of growth. With or without industry, warehousing or otherwise, our population will grow creating additional burdens on our city’s services and our schools. Wake up folks! Look around! New homes are being built left and right. The only reason we had a slow down was because the city council invoked a moratorium on new homes until they could solve how to pay for the additional services that they would need. This is without even attracting many new industries here lately. I don’t think the Walmart and other stores on 23 nor did the Target attract all of these homes. DeKalb is a good place to live! It is now closer to civilization than it ever has been in the past. The population base of Northern Illinois will continue it’s march westward. More people will move into DeKalb! Does it not make sense we should have a good mix of industries in our community so the existing residents as well as these new residents can work and spend their money close to home? Why should I go spend my lunch money in Naperville? Why should I have to spend $200.00 or more each month in gas driving over to DuPage county instead of spending that money here in DeKalb?

“Any job is a good job and we need the jobs”

I’m a firm believer that no job is bad. If you work hard, and do a good job as a fork lift driver, or whatever job it is you have, you can be proud of your work. There is no shame in any work. My contention is is that it is bad for a town to have only one industry. Evidence for this can be seen all over the country. A town thrives until it’s industry leaves or goes bust, then most of the town is unemployed and the town then dies or it takes years for it to recover. DeKalb needs a good mix of industry. We already have a number of warehouses large and small. It is time to look to other industries.

I believe the real argument for warehousing is…

In my opinion, the real reason for making warehousing the industry of choice for DeKalb is plain laziness. Face it, thanks to our location, the people in charge of finding new industry for our city and county can just sit on their hands and wait for the next logistics center to come. These people would have to create a marketing plan and find creative ways to espouse the virtues of DeKalb and it’s surrounding areas if they want to get other industries into DeKalb. Why work when you don’t have to? Why spend the time searching and coming up with ideas for attracting other industries when the logistic industry just comes calling without little or no effort? Being a lazy person my self, I can relate to this. Being a person who does not settle for mediocrity, I just don’t understand how we let ourselves fall into the trap. The trap these people lay with their half truths and underestimations of DeKalb and its residents! If half of the energy was spent on marketing DeKalb to other industries as spent on justifying why warehouses are the only good solution for DeKalb, we would already have all sorts of industry in town.

To sum this up. DeKalb is a great town. The fact that we are growing and it is estimated that this growth will only increase is the evidence for this. We have a good population base and have a broad skill set. We should capitalize on this and work to find ways to attract various forms of industry, High Tech, financial etc, not just the ones that come easy for us. We all need to work at this! This is not the time for DeKalb, let alone any town in the US, to sit back and just let come what may. We should look back to what made our country great, creativity, innovation and hard work, and apply these to building the DeKalb our children will be proud to call home. The DeKalb where we, our children and our children’s children will have jobs. The DeKalb which will help keep America strong for the next century to come.

Road Impact Fees & Accountability

This is the second of two guest blog articles this week by Mac McIntyre. The most involved of the Smart Growth-DeKalb participants–affectionately tagged (by me) as the Internet Research Commandos–discovered McIntyre’s work last fall when we began attending city meetings and researching logistics issues. We’ve been reading his “Rants & Raves” column at DeKalb County Online ever since.

My question: Will you elaborate on your objections to the road impact fee, & tell me what you believe should happen instead?

My main objection to all impact fees is the devastating effect they have had on affordable workforce housing. The Chicago Metropolis 2020 report, coordinated by the Suburban Mayors Caucus, reports that impact fees are the single largest obstacle in the way of affordable housing.
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Roots of Warehouse Mania

This week a special treat: guest blogger Mac McIntyre, editor of DeKalb County Online magazine. This is the first of two articles of his that will appear here. Mr. McIntyre represents the DeKalb County Building & Development Association and has followed local growth issues for years. During an e-mail discussion of the push to build warehouses on spec to market to prospective tenants, he had this to say about where we got the idea that we should pursue logistics:

Short history story: Shortly after the DCEDC (Roger Hopkin’s group) was formed the DeKalb County Board and NIU paid a national research firm, PHH Farnus, to do an assessment to determine what kind of industrial/commercial development was needed and could be supported in the county. In September of 1989 the results of that study was released to the public. It identified warehousing/logistics as the target industry for DeKalb County on the following basis: 1) DeKalb County has a low unemployment rate, historically, because such a high percentage of our residents are employed by the government. That puts the county at a disadvantage in attracting other types of industries who would need large numbers of employees. 2) Warehousing/logistics jobs generally pay better than food processing and retail jobs so the influx of logistics jobs would create opportunity for increased wages for some of our low-middle income residents without creating a strain on the workforce required by our existing employers. 3) Large warehouses cost a lot of money to build thereby creating a large property tax base to help the schools without creating a burden of too many additional students. And 4) logistics does not use a lot of water or sewer.
Continue reading Roots of Warehouse Mania

City Council Workshop Tonight

The aldermen resisted the temptation to cancel tonight’s meeting & instead will further discuss warehousing and other growth issues.

A Chronicle editorial today says that they should first figure out what went wrong last week that prompted Rockefeller to cancel their monster project.

It’s not a bad idea, I guess, except what do you do? Call them up? They already said they quit us because of the costs associated with the infrastructure improvements. Why not take them at their word? We just aren’t ready for a project of this scope and they eventually realized it would be their dime spent on getting us there.
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Rockefeller picks up ball, goes home

We knew something was up at last week’s City Council meeting because one of Mr. Keating’s people got dissed by the Rockefeller lawyer. That’s right, Mr. Keating’s realtor told the Council that legally re-routing traffic around the downtown area–even though it’s a state route going through, therefore by law a truck route–would be no problem-o because Elmhurst has done it. Then the attorney got up and said that not every town had friends like Pate Phillips and [I can’t remember the other Illinois big fish he named]. So we thought maybe Rockefeller was getting ready to dump Keating, but we did not guess that Rockefeller would totally pull out of the project as they did this past Monday afternoon.

The Chronicle has published three letters of comment about it in the past couple days. You can see them here, here and here.

Thank You, Northern Star

I would be remiss if I didn’t express my appreciation about an edited version of the “Open Letter to Kris Povlsen” appearing yesterday in the Perspective section of the Star. That same letter plus three previous LTTEs critical of the Business Center project were ignored by the Daily Chronicle. After this frustrating and disillusioning shutout, you will not find a person more grateful for the opportunity to express her opinion in print once more. Thank you to Andy and the Northern Star.

Open Letter to Alderman Kris Povlsen, 12/1

Mr. Povlsen:

At last Monday’s City Council meeting, when the Council voted to approve tax abatements and fee waivers for the newest 3M project in town (“Project Oak”), you commented that some people misperceive such incentives as corporate welfare, whereas you would encourage us to think of these incentives as investments in our future.

Mr. Povlsen, such incentives might be either one. You know me as a person who has been opposing the new DeKalb Business Center warehouse project in a big way, yet you’ve not heard a peep from me or any of the Smart Growth-DeKalb group regarding Oak/3M. Why is that? It’s because we know the difference between a good deal and a bad one.
Continue reading Open Letter to Alderman Kris Povlsen, 12/1

Letter #3 of the “Blacklist Collection”

One of the reasons I began blogging here is that the Chronicle suddenly began suppressing my letters-to-the-editor and I was looking for other outlets for my views. Any criticism of the DCEDC and its executive director, Roger Hopkins, seems to be off-limits. However, I cannot omit my opinions on his involvement in warehouse mania because I believe it’s a significant factor that should not be ignored.

I do not know whether this has anything to do with their publisher’s involvement with the DCEDC or not, but I think that’s a fair “guesstimate” since they had no problem printing at least a half-dozen of my letters on other topics from March-August. Also, I know of others whose letters expressing opposition to the Business Center project also have not been published. Bottom line is, I feel that they are abusing the public trust. And since I’ve kind of made a nuisance of myself over my beliefs, I’ll probably never see my opinions on newsprint again. Therefore I blog.

Letter to the Editor, 22 November 2005

Editor:

Many of the people who publicly support the Keating/Rockefeller/Business Center warehouse project have a financial interest in it. Most of those who are vocal in opposition would be living close to it. More of us who live in the city and who don’t have such high personal stakes should take a closer look and hop off the fence, one way or another.

That’s what I did, and have since joined the folks who have seen the plans and say this warehouse has the size of Godzilla and all the charm of Stalag 17.
Continue reading Letter #3 of the “Blacklist Collection”

Logistics Growth in Chicago Area

Well, we knew from the volume of articles we’ve found that logistics is in full boom here, but now we’ve found the numbers: logistics is experiencing 12-15% growth that will continue over the next few years.

Most of this growth comes from 3PLs, which stands for “third-party logistics,” a newer trend where the developer builds and owns the building and provides short-term contracts to tenants; say, 3-5 years. This relieves the tenant from the possibility of getting stuck with a building that they eventually may not need due to market changes.

Other highlights:
— there was a 9.1% vacancy rate in 2004, expected to spike this year.
— of 10 million s.f. in logistics space opening this year, only 20% of it is pre-leased.

What we can expect, then–in addition to more and larger warehouse proposals–is that more of the developers will want to build on spec and as we see new buildings we will also see more vacancies and turnovers.

Source 1
Source 2

Warehousing, the Boom-bust Cycle, & Foreign Trade Zones

Here is a copy of the letter I sent to City Council members today. It references my Monday speech at the public hearing (see below) but also discusses a new area of concern.

Dear Aldermen & Mayor,

Last Monday at the City Council public hearing, I urged you not to “put all our tax eggs into one industrial basket.” This is because I grew up in steel mill country in Northwest Indiana. Steel paid for everything there. Schools, everything. When I compare the tiny amount that my parents paid in property tax with my own bloated tax bill–even adjusting for inflation–I could cry. But the blessing was mixed, because when the steel industry did poorly we all suffered. In fact, this is how I ended up in DeKalb: in the mid-80s the mills became unable to compete with Japan producers (& their protectionist policies) and we suffered major job losses. Families scattered, looking for work, mine included. My sister went to Houston. My husband and I landed here in DeKalb. Most days I believe we ended up with the better deal (except when I am shoveling snow). But the point is, we paid very dearly for relying so heavily on one industry. Only Las Vegas can get away with that!
Continue reading Warehousing, the Boom-bust Cycle, & Foreign Trade Zones