Site selection: Checklist of do’s and don’ts
ESI Group discusses the do’s and don’ts of selecting a site for your next cold storage facility.
Site selection is the first major—and most critical—decision you’ll make about your building project. Here are some key requirements to help narrow down the site search and provide only qualifying site options.
1. Due diligence. Due diligence is a broad term that business and real estate attorneys and professionals use, but is often misunderstood by clients. Typically the term is used to refer to the inspection and investigation of real property, personal property or a business entity conducted before a buyer makes the final decision to purchase. There are many factors that must be considered prior to the purchase of property such as obtaining a Phase One Environmental Assessment, determining if there are any environmental operating permits, wetlands or regulations pertaining to flood zones. As well, an investigation must be conducted to determine if any endangered species reside on the site that may limit its use, or if there is an airport nearby, the FAA may have height and use restrictions.
2. Location. Is there ready access to major highways leading to the site, and how do these interact with other major highways? Like two sites but can’t decide? Perform an analysis on freight/delivery costs on both to see how quickly savings are realized. Also, if delivery from the site is done on a daily basis, knowing the range of company drivers is critical to avoid having to double up on operators. Workforce availability should also be considered.
3. Site size. When evaluating a site for size suitability, examine the ability of the site to fit the facility at full build out. Have an architect design a complete masterplan for the site, so any future expansion is thought out and done with reason. This involves more than just drawing boxes that represent future expansions. It should include production/storage space, mechanical room expansion, office growth and truck yard, including maneuvering room. The location of the building on the site and its ability to grow in a balanced nature will have long-standing operational and financial ramifications for the facility and the company. Also, consider municipal restrictions that limit site development. For example, a structure occupies a certain portion or percentage of the land parcel on which it sits. This percentage or ratio of the size of the building to the land on which it resides is called the “land-to-building ratio.” The building can get no bigger than the allowable land-to-building ratio. Know this restriction prior to purchase.
4. Access. Easy entry and exit from the interstate highways will make life easier and provide added incentive to choose your facility. Check right- and left-turn access, curb-cut locations (existing and potential), traffic islands, turn lanes, medians and other traffic impediments leading to the development. Also, visit the site during busy traffic times to see if nearby traffic control devices cause backups that could inconvenience clients. And, if crossing a rail line, consider the potential for blockages caused either by shunting rail road cars or worse, derailment. Both issues can severely affect the desired access to the site.
5. Topography and sub-surface conditions. Look at the overall lay of the land; check for extreme slopes or depressions that could make development difficult or more expensive. Remember, moving a lot of dirt around is costly. And, even a flat site can be difficult if it has no natural drainage for stormwater. As your interest in the property increases, be sure to perform a geotechnical analysis of the site to determine any sub-surface conditions that may make building more expensive to construct. This should be performed by a geotechnical engineering company contracted by you. Don’t rely on any report supplied by the current owner of the property.
6. Amenities. Check to see that the commercial site experienced recent improvement, such as electrical, sewer, water, telephone, gas and sometimes other amenities, including sidewalks, hydrants, regional stormwater detention, et al. It is important to verify the capacity of each, so the building operation can be supported now and in the future. This is particularly true of water and sewer. Water tanks and wastewater treatment plants are expensive add-ons to make the building work. Otherwise, the building owner will need to supplement. In the case of food processing and distribution, refrigeration systems consume large quantities of water and some municipalities, especially in the West, cannot guarantee water requirements needed for operation.
None of the items listed above come without a cost or time investment. Be prepared to spend some money up front to safeguard the decision and help select the best piece of property for the company’s future.
CLICK HERE to check out some of ESI Group's trade education pieces discussing site selection, among other topics.