Fedex Ground inks deal as anchor tenant at Tradepoint Atlantic’s new tri-modal logistics site in Sparrows Point, Baltimore.
Tradepoint Atlantic, the trade name for the corporation developing the 3,100-acre Sparrows Point site in Baltimore, now officially has its anchor tenant, FedEx Ground. Although the announcement (January 20th) wasn’t a surprise (the permitting process revealed the interest from the Memphis, Tennessee-based transportation giant), nonetheless it was a remarkable signing for a site that not long ago was considered an industrial wasteland with little apparent future.
More than just a tenant, the FedEx Ground development represents the first tangible proof that the transition from a former Bethlehem Steel manufacturing plant to a global new tri-modal logistics center is truly underway.
FedEx Ground’s new 300,000-square-foot, DC is being built on 50 acres of ground leased to developer Scannell Properties, which is developing the distribution facility for FedEx. The new facility is scheduled to open in August 2017 and is part of FedEx Ground’s ongoing nationwide network expansion plans. The new distribution facility will join two existing FedEx Ground stations in White Marsh and Halethorpe, enabling the transportation group to scale up services for the region.
FedEx’s site selection was understandable. FedEx’s new DC wilI have immediate access to Interstate 695 (the Baltimore Beltway), which provides easy connections to Interstate 95 and I-70. The site also has close proximity to Baltimore/Washington International Thurgood Marshall Airport. Add in connections to two Class 1 railroads and the attraction to the real estate is clear.
Michael Moore, CEO of Tradepoint Atlantic (TPA) in an interview with AJOT said of the new tenant, “It [FedEx Ground deal] checked [off] a lot of our [TPA] boxes, in terms of global brand.” Adding, “what it says to the marketplace is that they [FedEx Ground] saw the viability of the site, long before anybody else.”
Indeed it was very early in the site development process. According to Moore, FedEx Ground approached Hilco Real Estate LLC, one of the partners in the project with the idea of building a DC. In 2014, Tradepoint Atlantic (TPA), a joint venture of Redwood Capital Investments and Hilco Real Estate LLC, acquired the Sparrows Point site.
TPA began a dual track approach to the FedEx opportunity, on one hand addressing the substantial environmental challenges of the site, while simultaneously working with FedEx Ground and their developer Scannell Properties, to prepare the groundwork for building the DC.
It was a complex effort, as the TPA was also trying to check off the boxes in the “to do” list on the Master Plan. Moore says most of the boxes have now been checked off. Among them was the decision to add 140-acres of retail to the mix, such as hotels and shops to service not only visitors on the site workforce, but the greater residential community around Sparrows Point. Another decision was to establish an in-house development company that would act as the preferred general contractor to work on the site, albeit as in the case of FedEx, other general contractors would be permitted.
The site already has 100-miles of short line which connects to two Class 1 railroads, CSX and Norfolk Southern. Rather than outsource, the TPA decided to go vertical and established its own “Tradepoint Rail” company under a new executive, Paul Thomas. Thomas was previously manager of business development, international sales and ports for CSX.
Another strategic move made by the TPA was to set aside 330 acres for future marine development. When Moore was asked what they (TPA) had in mind, he explained that this could eventually be container related but not until the market shifted. However Moore added the caveat that they would entertain interest from “a strong carrier partner.” TPA will shortly begin reexamining the role “and possibly on site location” with Kinder Morgan, the on site stevedore. Kinder Morgan’s operation is predominately bulk and break bulk cargo.
The TPA has relocated the break bulk and bulk cargo to the east side of the facility while the pier is strengthened. The site has a 1,150-foot pier and 2,200-foot turning basin. The berth is being strengthened in a creative, cost effective manner by boring 120 holes and putting down pylons. This method will make the berth available for use by ro-ro or other freight by the end of this year.
Tradepoint Atlantic is still very much a work in progress. “The clients have literally reached out to us,” Moore said of the process. He explained the sales office would not be officially open until the end of April, at which time TPA will host an event.
The work TPA has done has already gotten recognition. The NAIOP (Commercial Real Estate Development Association) upcoming April 5-6 conference in Dallas, Texas is highlighting the TPA as an impact project.
Signing FedEx Ground as an anchor tenant is an important commercial step for the TPA. But it is also represents a tangible example for the leadership in both the public and private sectors that the region has turned a corner and that what was once an industrial wasteland, will again be productive.