Industrial Real Estate – the Importance of Local Communities

In several blog posts, we have discussed the importance of a variety of factors when purchasing or leasing industrial real estate.  Previous posts focused on topics like code requirements and the appropriateness of the building for industrial use, such as multi-tenancy, zoning restrictions, etc.  However, another significant factor in evaluating industrial real estate is the local community. The experience of a local company, while trying to relocate, highlights the challenges and pitfalls of heavy industry companies trying to relocate in facilities in a new community.

Ze-gen, an up and coming green technology company, had plans to build a commercial scale facility in Attleboro, MA. The plant would convert waste to energy and chemical products using advanced gasification, a seemingly green technology developed by Ze-gen.  The Attleboro location would be a commercial scale version of their existing plant in New Bedford, which had already proved successful.  The company was also chosen in 2011 from AlwaysOn as one of the Going Green 200 winners.  At first glance, the company’s future looked bright, with promising technology and positive, public recognition.

However, while initial response to the Attleboro plant was positive, environmental and zoning concerns soon changed the public’s opinion. Although Ze-gen had chosen an old industrial site, the former Texas Instruments facility, a local resident pointed out that while it “was at one time a fairly remote location” the past 50 years of development had brought residential development within 800 feet of the plant. Another concern was the need for 100 foot high smoke stacks, and their associated emissions.  Residents did not feel that enough was known about the composition and toxicity of these emissions, given their proximity to the plant’s neighbors. (source: http://www.bizjournals.com/boston/real_estate/2011/05/ze-gen-drops-plan-for-attleboro-facility.html).

Eventually, after a local community group petitioned to participate in a conservation commission visit to the site and numerous complaints, Ze-gen cancelled their development plans.  Ze-gen’s experience highlights an important factor that industrial users should not overlook when evaluating industrial real estate: the local community. Although the public’s reaction to a project is not as clear-cut or as obvious a factor as zoning laws or property infrastructure, it can still have a significant impact on the feasibility of a project. While it may not be easy to gauge public opinion in advance, or to position your company in a way that appeases community concerns; researching and planning for community reaction to your project is always a good idea when evaluating industrial locations.