SD54 - Study of Comprehensive Economic Development Centers


Executive Summary:
INTRODUCTION

As the Commonwealth advances into the Twenty-first Century, it will likely face complex strategic issues. The next millennia offers worldwide opportunities as well as domestic challenges. This report offers a pragmatic and logical direction for Virginia, in concert with the efforts underway for "Virginia Connections and Opportunity Virginia."

Current economic development theory indicates a trend towards an aviation-based "fifth wave" of development. Industrial development history can be tracked with advances in modes of transportation. Seaports, river canal systems, railroads and interstate highways constitute the first four waves of development. The theory suggests that significant economic changes have followed significant changes in modes of transportation. As the world grows closer together through aviation technology, and as international sourcing for manufacturing expands, economies likely will be transformed into aviation-dependent entities.

A comprehensive economic development center (CEDC) is defined as an intermodal facility that includes some combination of air, rail, water and ground transportation capabilities. Movement between the modes of transportation approaches a seamless logistical system of materials movement from source to manufacture to delivery with a focus on "just-in-time" (JIT) manufacturing and rapid delivery to international markets. "Just-in-time" manufacturing is essentially an attempt to run a firm at the margin, with as small an inventory as possible, where a single day's production literally departs the facility on the next plane, truck, ship or rail car (depending on the final destination).

Virginia has great potential for long-term competitive advantage. The Commonwealth, in partnership with local governments and private enterprise should, through forward thinking, and forward actions, commit to developing a network of futuristic facilities now. Other states have demonstrated a willingness and commitment to place strategically facilities with sufficient room for growth. Virginia has several areas that have the potential for development of this type. First, the Smart Highway consortium has already received federal grant money for research. Virginia Tech is one of three universities in the nation designated for Intelligent Vehicle Highway System (IVHS) research. The second effort is Virginia Gateway 21. Further study, site feasibility and intermodal ties should be examined for this project. Washington Dulles is also a candidate for consideration in comprehensive economic development.

EXAMPLES OF CEDCs IN OTHER AREAS

Comprehensive Economic Development Centers (CEDCs), have relatively few fully developed examples to examine. There is little consensus on the issue of enhancing existing facilities versus building an entirely new facility. This study will examine two well-publicized new facilities (Alliance Center in Texas and Global TransPark in North Carolina) as well as an example of existing infrastructure (Alameda Corridor in California). There is also a discussion of what may be one of the most advanced centers at the present time at Charles De Gaulle Airport in Paris. The findings on all four examples will demonstrate a serious commitment of funds through either new construction or enhancement approach. The advantage of enhancing present facilities lies in building upon existing business relationships and the marketability of the demonstrated history of the facility. As for the new facility construction, one major development obstacle is, even though the industrial park may be ready, industries themselves may not be ready (financially or logistically) to relocate. On the other hand, building a new facility may position the site for anticipated growth for the Twenty-first Century.

CEDC POTENTIAL SITES IN VIRGINIA

As pointed out in the previous discussion, there are potential sites in the Commonwealth of Virginia that lend themselves to development as CEDCs (Washington Dulles and I-73/Smart Highway corridor). The methodology developed through the integration of employment, educational and infrastructure data can, with further study and refinement, identify additional potential sites. There are also existing intermodal facilities that are well-positioned and have the expansion potential to embrace a looser interpretation of the CEDC concept. These include the Virginia Inland Port (VIP) at Front Royal and the Ports of Hampton Roads. The VIP is somewhat limited by the size of the current facility. It is served by the Winchester Regional Airport. The Ports of Hampton Roads are similar in some respects to the California Alameda Corridor. Air facilities are not in the immediate vicinity and the Norfolk International Airport has limited room for expansion. The Ports of Hampton Roads can be seen as a prime example of the importance of enhancing existing intermodal facilities.

CONCLUSIONS

The broad geographical distribution of these four sites, Virginia's demonstrated strength as a major East Coast international port-of-call, excellent access to domestic and international markets and the strategic planning efforts that have targeted industries for the Commonwealth can lead the Commonwealth on a long-term, balanced growth path into the Twenty-first Century. Key findings of this study include:

1. While existing CEDCs have been somewhat slow to develop, long-term implications (based on the De Gaulle and Washington Dulles histories) indicate a gravitational effect for incremental business location activity where the appropriate infrastructure already exists. This may mean it may take several decades to build a CEDC to its market capacity. But the advantage is, as Research Triangle Park in North Carolina has shown, adequate facilities will fill to capacity as the industrial base grows. Virginia is in an advantageous position to offer a variety of sites. Few other states can offer the array Virginia has to offer: for the short-run, as a tactical approach, bolster Virginia's existing facilities at the Virginia Inland Port, the Ports of Hampton Roads and Washington Dulles; for the longer-term, strategic approach, develop the I-73 Corridor/Smart Highway, continue to examine the feasibility of Virginia Gateway 21, and continue to develop the Virginia Inland Port, the Ports of Hampton Roads and Washington Dulles with significant capital improvements leading to increased intermodal connectivity.

2. Virginia has existing infrastructure capable of supporting near-term tactical efforts required to implement the Virginia Connections [Transportation] and Opportunity Virginia [Economic Development] strategic plans. These sites include Washington Dulles International Airport, the Virginia Inland Port and the Ports of Hampton Roads.

3. Virginia has sufficient existing infrastructure with significant upgrade potential to establish comprehensive economic development centers in a geographically diverse environment. Many areas of the Commonwealth could experience positive effects from the development of these sites. These include the I-73 Corridor/Smart Highway and Washington Dulles Airport.

4. Virginia has studies in progress to determine the feasibility of designing, building and launching a major international superport, Virginia Gateway 21. This is a long-term commitment and the process of site selection and environmental impact should be addressed in the near future. Also, high-speed rail access may be an important element in moving the large numbers of passengers necessary to support the planned facility.

5. Virginia has embarked on several important transportation initiatives. The Virginia Connections strategic plan, the Smart Highway and the Dulles Task Force have the information base and demonstrated public support to establish a critical mass for the integration of land use planning and transportation infrastructure development.

6. Virginia has developed a comprehensive strategic plan for Economic Development, Opportunity Virginia. This document outlines an organizational structure and specifically targets ten sectors of the economy for concentrated development efforts. Eighteen Regional Economic Development Advisory Councils have been established as part of the strategic planning initiative and can serve as conduits to promote joint projects between state and local governments and the private sector.

7. Other states have developed and implemented plans that will lead to the development of comprehensive economic development centers. Alliance (Texas) and Global TransPark (North Carolina) are new facilities. Charles De Gaulle (France) is a facility in its third stage of development. All three examples have made extensive use of long-term planning for the integration of land use and transportation infrastructure. All three use a combination of public and private sector financing.

8. As new forms of transportation have fostered economic development throughout history, an aviation-based "fifth wave" is underway. Contemporary theory suggests aviation will drive a global economy, where multi-national component and materials sourcing for manufacturing becomes the norm. Geographic areas that are not able to provide adequate access to air transportation will lag significantly in economic development. Both public and private sector initiatives and financing will be effective components in the "fifth wave."

9. A comprehensive economic development center requires the extensive use of intermodal transportation facilities and relies heavily on seamless interconnectivity, mixed-use land development, concentration on international markets, and transportation infrastructure development that complements the mixed-use land development. Comprehensive economic development centers are largely aviation-based. The focus of these centers is on distribution centers, high-tech firms, export markets, research and development facilities, office facilities, and retail and support services. Manufacturing facilities emphasize "just-in-time" processes. All CEDC examples had direct ties for each type of land use to more than one mode of transportation. In short, a CEDC is a "gathering of activities," interconnected by at least two modes of transportation, with seamless integration between modes and directly tied to air transportation.

10. North Carolina has made extensive commitments to build Global TransPark from the ground up and is similar to the Alliance project in Texas. Virginia has facilities that can be upgraded and positioned competitively against Global TransPark. Based on the Alliance experience, in five to eight years Global TransPark will be a significant competitor. But, Virginia has an immediate advantage that may be exploited while Global TransPark begins construction: Washington Dulles. Virginia also has a developing area in Southwest Virginia (I-73 Corridor/Smart Highway) that can build access to new markets and new technology-based industry. University resources could be co-located and foster improved educational development with industrial ties.

11. As international markets expand, there may be additional opportunities for agricultural as well as manufactured products for distribution. By learning more about newly developed markets and studying consumption patterns, adjustments in Virginia's agricultural mix may be instituted to exploit overseas consumption habits and enhance the value of agricultural exports.

RECOMMENDATIONS

1. Prioritize infrastructure development projects by cost, funding availability and projected economic impact for the completed facility. Push for public and private sector cooperation and privatize operations where feasible. Exploit every opportunity to designate Foreign Trade Zones as an element of local economic development proposals.

2. For Washington Dulles International Airport, concentrate on implementation of current initiatives:

• the extension of the Dulles Toll road to Leesburg (currently under construction); HOV lane development through the corridor;

• support the construction of a western bypass around the current urban edge. The Task Force favors the route furthest to the east, which will pass east of Goose Creek and west of Washington Dulles, and is the closest of the alternatives under consideration;

• support the development of a bus-based transit system throughout the Dulles Corridor to create transit ridership patterns in the short run, and act as a feeder system to a future rail system;

• support the development of a passenger rail system over the next decade; use Aviation Fund entitlements for expansion;

• work with adjacent localities to focus on the expansion and potential for increased economic development with an emphasis on the integration of land-use planning and transportation infrastructure development;

• work with local governments to leverage marketing efforts for the airport and the region as a whole;

• support the goals delineated by the Washington Airports Task Force.

3. At the Port of Hampton Roads, support the implementation of the VPA's Marketing, Operations and Development Plan (October, 1994), including intermodal rail improvements relative to key intermodal development at Norfolk International Terminals and Portsmouth Marine Terminal. Additionally, support the implementation of highway improvements detailed in the 1993 Ports Access Study. These include significant expansions and interchange improvements on I-64 and U.S. 17, as well as future plans for improving several at-grade crossings to grade separated crossings at critical access points. Other important projects to be considered include an additional parallel tube that accommodates two lanes of travel in each direction at the Midtown Tunnel between Norfolk and Portsmouth, an extension of I-564 allowing direct limited access to Norfolk International Terminal and a new tunnel/bridge combination between Norfolk and Portsmouth designated as the Uptown Crossing.

4. For the Virginia Inland Port (VIP), support the required market-driven development of the VIP as outlined in the Marketing, Operations and Development Plan. Utilize the VIP as an economic development tool to enhance the competitiveness of the region and attract industries targeted through the "Opportunity Virginia" initiatives. Leverage the VIP through local economic development organizations and the Regional Economic Development Advisory Council specified in "Opportunity Virginia." Encourage and support the local communities to implement pre-emptive zoning in the vicinity of VIP to reduce long-term conflicts with residential housing. Study the feasibility of direct rail access from the VIP to Washington Dulles, in addition to existing rail access to the Port of Hampton Roads. Support local zoning and plans for improved highway and rail infrastructure between Washington Dulles and VIP to accommodate a logistics/distribution corridor which will attract world-class industrial/transportation clients. Combine light rail commuter development with heavy rail requirements so that Washington Dulles, VIP and points in between can be served with both intermodal and passenger rail service. Right-of-way acquisition should be forward-looking enough to anticipate double-tracking along with air and underground rights for pipelines, power lines and communication conduits. Also, target businesses that are export-oriented or process components for "just-in-time" manufacturers along the rail line or in Washington Dulles. Additionally, identify key existing and potential rail/highway crossings in the vicinity of VIP and plan for grade separation to reduce local complaints and to ensure high speed rail transit.

5. Study long term development and infrastructure projects in the I-73 Corridor/Smart Highway. Leverage the development of smart highway and smart vehicle technologies through the Center for Transportation Research (Virginia Tech) and the Center for Innovative Technology. Study the feasibility of expanding the New River Valley Airport to handle the jumbo air freighters of the future. Begin conceptual design of an aviation-based comprehensive economic development center that focuses on the new intelligent vehicle/highway industry that will develop as a result of the National Highway System initiatives. The characteristics essential for the formation of a comprehensive economic development center are present in I-73 Corridor/Smart Highway, and can be leveraged through the development of a new industry.

6. Identify and recommend enhancements to current freight corridors linking ports by rail and highway to national freight corridors and air freight hubs. Extend and coordinate smart highway and smart vehicle technologies to freight corridors. Develop dedicated freight corridors which will connect to the current Port Intermodal Infrastructure to support seamless freight flow concepts.

7. Support a comprehensive inter-agency effort to develop a statewide Geographic Information System (GIS). Establish a central point of control for the assimilation and standardization of information. Allow dissemination of information requests through a distributed computing environment. Implement an ongoing effort to develop secondary sites. Use the methodology developed for this study as a benchmark tool to compare future results in conjunction with the implementation of Virginia Connections and Opportunity Virginia initiatives.

8. Integrate the development of the I-73 Corridor/Smart Highway, Washington Dulles and the Ports with the 18 Regional Economic Development Advisory Councils. Use the knowledge gained through the development of these centers to assist other areas of the state in planning for future infrastructure development. Use the initial sites to further refine the target prospects pursued by VDED. Foster joint economic development projects that utilize public- and private-sector resources and privatization (where feasible) through the network of local economic development organizations. Use the "Opportunity Virginia" organizational structure to formalize the study of possible CEDCs. Allow localities the opportunity to work with local corporate citizens and the eighteen regional economic development advisory councils to bring proposals before the General Assembly for economic development projects that integrate transportation infrastructure with land-use planning. Establish proposal standards that mandate the combined use of land-use planning and transportation infrastructure development. Design a marketing plan based on CEDC site study results and the proposal standards that will compete directly with Global TransPark. Alliance and other CEDCs that are likely to be established. Devise a promotional strategy that presents Virginia as a state that is well positioned to compete in the worldwide marketplace.

9. Examine the feasibility of expanding agricultural exports through Washington Dulles and the Ports as new international connections or steamship lines are developed. Study the rust efforts of Global TransPark to enter new export markets through new international connections. Cross-reference new international destinations with their agricultural needs. Disseminate the information to Virginia farmers through the Department of Agriculture and Consumer Services and its extension services.

10. Continue to develop the concept of Gateway 21. Acknowledge the study initiatives that are currently underway. and expand the scope of the project to include more cargo facilities and on-site and/or adjacent manufacturing, distribution, food production and communication facilities. Factor into the studies the potential competition of Global TransPark.