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Industrial parks: a little too quiet.

ON A SATURDAY afternoon it's like driving through an urban ghost-town. Empty grey streets lined with office buildings and warehouses set low to the ground. Another direction, the cement or steel stacks of manufacturing. You'll find a few cars. Even fewer people. That is until Monday, when the early morning traffic brings Winnipeg's industrial parks to life with a myriad of business activities which are here for good reasons.

Over 1,600 suburban acres are home to businesses of all sizes. They all have one thing in common. They've chosen to build or lease space in an industrial park. As companies began to expand and the costs of business increased, the need for more land became apparent. The City of Winnipeg-owned Inkster Industrial Park was the first, offering access to major transportation routes; the assurances of services and building standards and the possibilities that go with good land prices. Companies recognizing the value of business bungalows over the traditional downtown multi-story building moved outward.

Today there are 10 industrial parks in Winnipeg. The range of size, zoning, and location meets the needs of commercial businesses as well as light and heavy industry. And the reasons for moving are the same and more. Larry Tardiff, a commercial real estate agent specializing in industrial and investment property, says business draws business.

"You'll find that industrial parks congregate customers together.If one company warehouses steel you'll find companies who use their products moving into the same park," he says.

Proximity to clients was one of the reasons Jan Orihel, president of Magna-Tech Graphics Inc., moved his growing company into the West Logan Industrial Park.

Orihel says his company had been leasing nearby space and out, growing it every year - taking another bay and paying the costs for improvements. So this time around Orihel made the decision to purchase land and build. He says the area is geared for light manufacturing and offered his company the size of lot they needed to expand.

Expropriation for the CORE re-development program prompted the move by Melrose Coffee Company to the Fort Garry Business Park over five years ago.

Access to transportation for both their business and their employees was a major consideration in selecting a sight. Bill Reid, president, Melrose Coffee Company, says their location in the southwest side of the city answered the transportation question and offers the company visibility.

"We're in a high-profile area which will increase even more with the Bishop Grandin extension," he explains. "As a food services business you want at least some recognition with the consumer, plus we've got room to expand."

Working in an industrial park can mean a shorter drive to work. It can also mean isolation from the amenities offered by a central downtown location. As Reid points out, there are fewer places to go for lunch in an industrial park and some Magna-Tech employees are faced with limited transit service and a significant walk from the bus stop to the office.

Nevertheless, while the overriding advantages of industrial parks are strong, realtors and developers in Winnipeg have been watching the traditional slow and steady growth in the market turn quiet over the last year.

"There's been a definite decline in terms of volume of sales," says Mark Steiman, project co-ordinator, Winfield Developments Canada Ltd. "There's nothing secret about it, with high interest rates and a general recession there's lots of space on the market."

Tardiff sees it another way. "If you look at industrial property as an investment, there are some tremendous bargains out there right now. Winnipeg's market tends to appreciate every year. Property values haven't dropped." He also adds that in other respects it's been a solid year for contractors and the development of new buildings.

The average price per acre has generally held its own, ranging from $50,000 to $160,000 depending on the park selected and the services required. That price can double in areas of St. James and the northwest sector where the available industrial land is in short supply. Initially slow to develop, St. Boniface Industrial Park has seen some activity. Gerry Anderson, senior real estate officer in the city's Land and Surveys and Real Estate Department, says the old perception of the park being too far out is finally subsiding.

However, the areas with high demand continue to be in the southwest area of the city, St. James and Inkster Park, where access to markets and major transportation facilities plays a major role.

Leasing space in the parks has also slowed. Brian Aronovitch, of Aronovitch & Leipsic, estimates the lease rate in a multi-tenant building ranges from $4 to $4.50 per square foot in Inkster Park up to $5.00 in the West Fort Garry Business Park.

He adds: "The phone continues to ring with a constant level of companies looking to relocate, but the decision-making process is taking longer than it has in the past."

The lifecycle of Winnipeg's industrial parks is inextricably tied to the fortunes of the city as a whole. While developers and realtors continue to aggressively market the property, they also recognize the need to sell "Winnipeg" as a business opportunity. Opinions on how are as broad as the challenge.

"We're in a Catch,22. Business likes to locate where there's a primary industry then the rest will follow," says Bruce Little, president of Realcor International Inc. "But you need the primary industry first and historically we haven't had the political clout to draw that type of business," Little adds.

Little says that while the city and province have done well, the task force report for Winnipeg 2,000 (City of Winnipeg, Economic Development Strategy) hit it right on the nose.

"We need to stress the positive opportunities this city has to offer," he says.

"Winnipeg is a city in transition. We've lost our rail transportation component and we're left without a basic product industry," says Dave Palubeskie, president, Lombard North Group. Palubeskie, a city planner, claims, "Winnipeg 2,000 is an excellent idea involving business and development of a clearly defined direction."

Drawing in new investments is a very competitive business. Winnipeg 2,000 and the Winnipeg Business Development Corporation are competing with 15,000 economic development organizations in North America alone.

While Palubeskie acknowledges that Winnipeg has an abundance of positive features - cost of living, property costs, cultural activities - he stresses the deciding factor is strictly business.

"To attract industry we need to go one step further and show them how Winnipeg can assist them in defining and penetrating a market," he says. "With all the city has to offer, the question remains: does being in Winnipeg add to the bottom line?"

With a revitalized commitment and focus on industrial development, Christof Kaufmann, Industrial Planning Officer, City of Winnipeg, is even more convinced of the need for a strong inventory of land for development. Although the market is quiet now, Kaufmann points to the fact that parks like West Fort Garry are 75 to 80 per cent sold.

"We have enough areas designated as industrial land. Servicing it is the tricky part." Kaufmann estimates that the nearly 3,000 acres set aside for industrial use should "take us a long way into the future."

"The question becomes, when will the city see fit to service it? We have to recognize that city growth is not continuous, having its ups and downs," he explains. "What's more, it doesn't necessarily fit with the development of the rest of the country."

"Planning has to take place immediately so that there's a place for everyone."

Everyone could mean changes are coming for the city's future industrial parks. For instance, we may see Environmental Parks geared specifically for industries dealing with recycling and environmental waste. Or perhaps Smart Parks, as the 1990 Economic Development Strategy Report suggests "where state of the art telecommunications apparatus is combined with industrial and office space."

Whatever their shape, industrial parks will continue to be one of the major sounding boards on the health of the city of Winnipeg.

Right now it's just a little too quiet for everyone's liking.
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Title Annotation:Winnipeg, Canada
Author:Avery, Lydia
Publication:Manitoba Business
Date:Dec 1, 1990
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