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The hub of it all: Region shines as distribution hub

For storing and moving goods, the Dayton area is increasingly seen as the place to be.

Montgomery County and other area government leaders last week approved various measures to lure a new $90 million distribution center to a site near Dayton International Airport.

If San Francisco-based developer Prologis builds the 1.8-million-square-foot center in Union, it would join Collective Brands, Honda, Syncreon, Caterpillar Logistics, Carter Express and others that have brought big warehousing and distribution centers in the area. The client for whom Prologis works has not been publicly identified, but the site would employ 1,000 people, say those guiding the project.

The prospect of Prologis, a distribution and logistics industry leader, building such a large hub reinforces the area’s image as a strong, logical location for such centers, local development officials said.

>> INTERACTIVE MAP: Warehousing and distribution centers throughout the region

Observers like Jeffrey Berman, group news editor of Logistics Management magazine and website, agree. Dayton is on the radar of logistics site selectors, given its access to two major interstates and proximity to 60 percent of the U.S. population within a day’s drive, he said.

“It is, I think, viewed as a city you need to be in, you need to have a presence in,” said Berman, who works in the Boston area.

Berman cites relatively light traffic, a ready workforce, plenty of trucking and transportation firms and Ohio’s 13 “intermodal” railroad terminals — terminals which serve not only trains but trucks — as reasons for logistics decision-makers to choose Dayton.

Those assets “make cities like Dayton more important,” he said.

Just having CAT Logistics and the interest of Prologis — owner, operator and developer of $46 billion in industrial real estate — impresses Berman. “They (Prologis) would never move there unless there was a really good reason.”

Dan Gilmore, the Springboro-based president and editor-in-chief of Supply Chain Digest e-magazine and website, says Ohio has long been well positioned for distribution projects. Columbus, Cleveland, Cincinnati and Erlanger, Ky., and other sites have historically proven to be prominent distribution points. Now, the Dayton area is sharing in that success, he said.

“They must be doing something right to attract these kinds of companies over the last few years,” Gilmore said of Dayton and Montgomery County.

While manufacturing isn’t as prevalent in the region as it once was, logistics seems to have filled at least part of the void. Much of that started in 2006 and 2007, when Collective Brands searched for a site for its 600,000-square-foot Eastern Distribution Center to move Payless ShoeSource goods. In May 2007, the company announced that the center would be built in Brookville.

That experience was a formative one, said Joe Tuss, Montgomery County administrator. It provided a template local leaders returned to in attracting and developing other projects.

“We really got some insight into how that (site selection) decision-making worked after it was all over,” Tuss said. “We were able to do a pretty good post-mortem to understand why we were successful and where our competitors were.”

“It was a huge education,” he said.

Each succeeding project strengthens that education, said Erik Collins, Montgomery County development director. “You need to refine each project,” he said. “We look at things we need to do to bolster our efforts, to be stronger for that next opportunity. And we’ve done that.”

“With the Payless facility, I think people start to notice that,” said Dan Foley, Montgomery County commissioner. “They say, ‘Hey, that’s a major company that picked the Dayton region for a reason.’”

The projects have proliferated. In June 2007, Honda opened its $89 million Midwestern Consolidation Center in Troy, with 500,000 square feet of warehousing space and nearly 50,000 square feet of office space.

In December 2007, ground was broken in Trotwood for a 375,000-square-foot distribution site for Detroit-based James Group International, to facilitate exporting of General Motors parts. Syncreon later acquired that facility.

By late 2007 and into 2008, Montgomery County commissioners and development leaders had identified logistics as a key economic pillar, Tuss said.

Then, in 2009, after nearly two years of behind-the-scenes work, talk of an especially big project became public: Caterpillar Logistics was looking at land off Hoke Road in Clayton just south of Interstate 70 for a 1.6 million-square-foot distribution hub.

Now, announcements about big distribution and other kinds of projects seem to come up almost regularly: Abbot Laboratories in Tipp City, White Castle and Carter Express in Vandalia, Ferguson Enterprises in Celina earlier this summer. Those aren’t accidents, local leaders said.

“Success builds on success,” Foley said.

It’s not enough to have the right infrastructure or “good bones,” Foley said. The Montgomery County Jobs Center essentially became a “hiring agent” for companies like Collective Brands and, most recently, the Meijer Distribution Center in Tipp City, he said. The center helps find, screen and train candidates for jobs openings at those and other sites.

“Workforce is always an issue,” Tuss said.

Rob Anderson, Vandalia city manager, said it takes a team of people who can answer an array of questions for companies: Organizing utilities, meeting workforce needs, having the right location and more.

“If we could not get over those first two hurdles, of logistics and the workforce, then we wouldn’t have been able to start with Carter (Express),” Anderson said.

Recruiting and attraction efforts aimed at other companies have become more organized in the past 18 months. In the spring of 2012, municipalities and agencies, including the Montgomery County Transportation Improvement District (TID), began approving an intergovernmental pact meant to lure new distribution businesses to the region.

Pact members also sought county ED/GE (Entrepreneurial Development/Government Equity) funds to buy data and analysis from PIERS, a Newark, N.J.-based freight industry organization with access to wide shipping data, including more than 5,000 bills of lading records annually. The idea is to find out who might need use of Dayton’s assets.

And in April 2013, Montgomery County TID trustees voted to hire a company — York, Pa.-based St. Onge Co., a supply chain consultant — to help market and guide Dayton-area distribution and logistics prospects. Local leaders expect shortly a St. Onge report on companies that may be interested in Dayton.

“We have to try to go out and look at real data to figure out whose door we should be knocking on next,” Foley said.

Said Collins: “We’ll have some good data, and it will be objective data based on multiple sources that they (St. Onge) tap into to make recommendations for their clients.”

Still, it takes more than data. County leaders and representatives of the Dayton Development Coalition regularly meet face-to-face with site selection committees and recruiters. Those meetings happen in Chicago, Atlanta, the East Coast and elsewhere.

That work may be “quiet,” but it’s about raising Dayton’s profile, Tuss said.

“There’s a lot more going on behind the scenes than you might realize,” he said.

Those local relationships — county and city governments working with the coalition — can make an impression on site selectors, assuring them that the Dayton region is united in pursuing a project, said Scott Koorndyk, the coalition’s chief operations office.

“We’re very fortunate in this region to have the kinds of relationships that we have,” Koorndyk said.

Tuss, Foley and others reject the notion that the area is perhaps becoming too dependent on distribution centers. They cite the county and the coalition’s development priorities, which touch on aerospace, downtown, manufacturing, materials and other areas.

“We have more eggs in more baskets,” Foley said.

In the meantime, new distribution jobs should be welcomed, Gilmore said.

“There is room for many, many many more distribution projects to locate in the Dayton area,” he said.

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