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New Jersey is a gateway for international commerce. Located in the heart of one of the most concentrated consumer markets in the world, New Jersey has immediate access to some of the best transportation infrastructure in the world, including interstates, international airports, seaports, and rail networks — making the state a key component in the global supply chain.

“Even so, New Jersey faces a challenge as it seeks to expand its role as a logistics hub — a shortage of land for new distribution centers, particularly those that can serve the New York-New Jersey port complex,” says George Hasenecz, vice president of capital deployment for ProLogis, a major real estate developer. “Although New Jersey’s overall supply of warehouse space is vast, more than 850 million square feet, much of it near the port is old or functionally obsolete.”

To deal with this problem, the Port Authority of New York/New Jersey and the New Jersey Economic Development Authority (NJEDA) launched the Portfields Initiative. This long-term joint venture provides financial, technical, and other kinds of support to government agencies, developers, and municipalities for transforming brownfield sites or underutilized properties into modern, productive warehouse/distribution centers within the Port District — the area within a 25-mile radius of the Statue of Liberty.

Not only does the remediation/redevelopment of brownfields help New Jersey capture more of the port’s shipping-related warehousing/distribution business, it’s also better for the environment and enhances the aesthetic appearance of the district. The long-term goal of the Portfields Initiative is redeveloping 1,000 acres of property, which represents roughly $500 million in land costs and about $1.5 billion in construction value.

This redeveloped acreage will become the future homes of what shippers in the port need the most: larger, more modern warehouses with state-of-the-art IT infrastructure and security systems that contribute toward a more efficient supply chain. With the shift toward just-in-time manufacturing and inventory control for wholesalers and retailers, speed to market is absolutely critical. Many existing facilities are too old, too small, and unsuitable for modern IT technology.

“Not only will the Portfields Initiative bring new jobs, a significantly expanded tax base, and an improved local road infrastructure, but it will also ensure the long-term viability of the port as one of the nation’s most important import–export hubs,” says Hasenecz.

Vital to the Economy
The Portfields Initiative is critical to the long-term economy of New Jersey and New York. In New Jersey alone, about 250,000 jobs are directly related to the port’s shipping industry, which has an aggregate impact to the state’s economy of about $20 billion to $25 billion. Cargo volume in 2006 increased by 11 percent compared to 2005, and is likely to double over the next 20 years. This booming market represents $140 billion worth of cargo, making it second only to the Port of Los Angeles — which is why it’s critical that the New York–New Jersey port complex captures as much of this new traffic flow as possible by offering new, attractive, and highly functional warehouse/distribution facilities.

“Brownfield redevelopment for industrial and port-related facilities is absolutely essential for this region to compete,” says Mike McGuinness, executive director for the New Jersey Chapter of the National Association of Industrial and Office Properties (NJ-NAIOP). “This requires extra steps by developers, but the process is necessary and brownfields cleanup has become the specialization of many talented firms in New Jersey. The State of New Jersey, through its Economic Development Authority and the Portfields Initiative, is doing a good job of inventorying and assembling these sites for developers and providing incentives for their development.”

Currently, 17 sites in Kearny, Newark, Elizabeth, Bayonne, Linden, Carteret, Woodbridge, and Perth Amboy have been identified as choice sites for redevelopment. All have good access to the New Jersey Turnpike and other major highways, as well as Newark Liberty International Airport and Port Elizabeth/Newark. The properties will be developed by private-sector companies, either individually or through private–public partnerships. Many of the target sites are brownfields that qualify for financial assistance for assessment and environmental remediation.

Latest Progress
“We are seeing many of these sites moving out of the entitlements phase and into the bricks-and-mortar development stage,” says Mike Collins of the Senior Project Office for NJEDA’s Real Estate Division. Here are some of the latest developments.

• Elizabeth Seaport Business Park, a ProLogis site, is currently undergoing grading/remediation and is awaiting final approvals. Development will include four buildings totaling 1.05 million square feet of space. Construction on the first building, totaling 531,000 square feet, will start in late 2007 or early 2008.

• Panattoni is developing 1.2 million square feet of space at the iPort12 Business Park, the first phase of which is already under construction in Carteret.

• The Morris Companies have recently started construction at the Linden Airport Business Park (400,000 square feet) and the Amboy Corporate Center (more than 1 million square feet) in Perth Amboy.

• J.G. Petrucci is pursuing the development of a 570,000-square-foot warehouse/distribution facility in Edison.

This is just the beginning. “The NJEDA and its partners are continuing to review properties and have already identified another four sites with development potential in addition to the 17 sites initially targeted,” says Erin Gold, public affairs officer for the NJEDA. The following four properties are expected to be added to the list of designated Portfields sites:
• • Secaucus Road, Secaucus (more than 70,000 square feet)
• • FTZ/Meadowlands, Jersey City (more than 40,000 square feet)
• • Nuodex, Woodbridge (more than 180,000 square feet)
• • Middlesex Logistics Center, Edison (more than 42,000 square feet)

Getting the Word Out
In March 2007 the second phase of the Portfields Initiative marketing campaign was officially launched. This $250,000 direct-mail campaign (part of a larger $2 million marketing initiative) funded by a Public Service Electric & Gas (PSE&G)-led partnership that includes NJEDA, the Port Authority of New York/New Jersey, and the Commerce Commission, targets roughly 3,500 companies in North America, including logistics firms and national retailers.

“Over the past four years we have been working to redevelop 315 acres of brownfield land off New Jersey Turnpike Exit 12, just south of the New York–New Jersey port area, into a new, 3.4 million-square-foot industrial facility called Port Reading Business Park,” says Hasenecz. “This land was previously home to a chemical plant and had to undergo substantial environmental rehabilitation before construction could begin. Work included stabilizing site contaminants, removing polluted sediments, capping 125 acres, and restoring over 12 acres of inter-tidal wetlands.”

Port Reading Business Park will ultimately comprise eight buildings, ranging in size from 71,000 square feet to 738,000 square feet. The first distribution center was completed in early 2007 and is already 75 percent leased. Construction of the second facility begins in November 2007.

In other project news, after assembling 38 required permits, Panattoni Development Company — a real estate development company specializing in industrial, office, and retail projects — has initiated the environmental cleanup and wetland remediation at its iPort12-International Trade and Logistics Center, a Portfields site in Carteret. Construction has started on two buildings totaling 1.2 million square feet that feature 36-foot ceilings, ESFR sprinklers, numerous dock doors, grade-level doors, and oversized bays. The site is adjacent to Exit 12 of the New Jersey Turnpike and only minutes away from Newark International Airport and the Ports of Newark and Elizabeth.