Newell Rubbermaid Former Military Base Provides Optimum Supply Chain Access

[ By Brian Parno ]

Newell Rubbermaid’s new 407,412-square-foot West Coast distribution facility at Southern California Logistics Centre features 32’ ceilings, ESFR sprinklers, high rack storage and ample office space.

What does it take for a global marketer of consumer and commercial products to compete in a worldwide marketplace in which supply chain access and speed to market are critical? Ask business strategists at Atlanta, Georgia-based Newell Rubbermaid, makers of such familiar products as Rubbermaid food storage containers, Calphalon gourmet cookware and Sharpie and PaperMate office supplies, and they’ll tell you this: it takes a cost-effective location with outstanding access to all modes of transportation. It calls for a distribution site with an available and qualified labor pool, as well as land for future growth. To support more than $6 billion in annual sales, it requires an environment able to foster business success and contribute to the bottom line through cost effective occupancy costs.

Sound like an impossible dream for a company seeking a centrally located West Coast distribution facility conducive to streamlining operations and lowering overhead as part of a worldwide distribution strategy? Not so. Given the high cost and scarcity of land available in the Los Angeles basin, Newell Rubbermaid identified an ideal location at Southern California Logistics Centre (SCLC), a master-planned 8,500-acre multi-modal freight transportation hub in Victorville, Calif., as the site for its new 407,612-square-foot West Coast distribution facility.

The Newell Rubbermaid facility is the first industrial distribution building developed on the site of the former George Air Force Base.

Transportation Linkages Enhance Strategic Location
SCLC, the former George Air Force Base, is part of an 8,500-acre multi-modal transportation hub supported by air, ground and rail connections. Stirling Enterprises, a Foothill Ranch, Calif.-based development company and the City of Victorville formed a public/private partnership to bring more than 65 million square feet of diverse development to SCLC, worth an estimated $3 billion upon completion. SCLC is the largest commercial development in the Inland Empire region of Southern California and is expected to bring more than 24,000 jobs and support another 18,500 jobs in the surrounding area.

With access to the Ports of Los Angeles and Long Beach, as well as Interstate 15 and U.S. 395, the nation’s most heavily traveled corridors, SCLC is one of Southern California’s most strategically located multi-modal facilities. In addition to sea and ground transport links, it offers air connections through Southern California Logistics Airport’s two intercontinental runways and rail ties through the planned 3,500-acre Southern California Rail Complex.

Site Selection Requirements and the Bottom Line
When selecting the location for its new West Coast distribution facility to funnel Graco infant car seats and many other consumer goods from Southeast Asia to stores and warehouses across the country, Newell Rubbermaid evaluated many factors that supported the company’s strategy to achieve the lowest total cost in its supply chain. With transportation requirements satisfied at SCLC and a centralized location within Southern California, the next step was identifying a location with competitive lease rates, an available labor force, room for growth and attractive business incentives.

Compared to the built-out L.A. basin, land in the High Desert area of San Bernardino County in Southern California is far less costly, which translated into an attractive lease rate for Newell Rubbermaid. Additionally, a dependable and qualified labor force of more than 300,000 workers within the Victor Valley region with 34 area universities, colleges and technical schools, provided a solid employee base for operations.

Newell Rubbermaid also was able to take advantage of reduced utility pricing though The City of Victorville’s own Municipal Utility Services providing reliable, wholesale pricing of electricity and gas to businesses at SCLC. Newell Rubbermaid benefited from the incentives offered through SCLC and pro-business city and county governments. Located within a 60,000-acre redevelopment district, SCLC provided incentives to Newell Rubbermaid such as waived development impact fees which cascaded down into a rent savings. Additional economic advantages at SCLC include: a 2,600-acre Foreign Trade Zone (FTZ #243), onsite U.S. Customs Port of Entry, Local Agency Military Base Recovery Act enterprise zone credits and incentives, and San Bernardino County job training and employment credits.

Perhaps one of the biggest factors in Newell Rubbermaid’s site selection decision was the availability of land and room for growth in the future. SCLC has more than 65 million square feet entitled for industrial development and is in the early stage of delivering the 6.5 million-square-foot first phase. Although Stirling has more than 2.5 million square feet actively in its pipeline, Newell Rubbermaid was able to sign a 10-year, 407,612-square-foot lease for the first industrial building ever to be constructed at SCLC, with the option of expanding the facility to one million square feet over the next five years.

Public/Private Partnership Overcomes Development Challenges
Developing the first industrial building on the site of a former military base presented a number of challenges. The public/private partnership between Stirling and The City of Victorville was critical in overcoming the obstacles and completing the project within Newell Rubbermaid’s fast-tracked timeframe.

Challenge #1: The site contained 50-year old military buildings originally constructed with materials no longer used today. The buildings first had to be remediated before they could be dismantled in an environmentally safe way. Nine individual structures had to be demolished in order to get the site properly prepared prior to development.

Challenge #2: The infrastructure that was originally installed at the former George Air Force Base was clearly defined to service the evolving needs of the military and wasn’t designed to handle today’s industrial facilities. Since the existing roads couldn’t support the heavy truck traffic volume needed for the Newell Rubbermaid site, the City of Victorville improved existing roads and installed new infrastructure. There was an existing residential street on the east side of the site that had to be fully improved to handle truck load capacity. There also wasn’t direct access from Air Expressway, a major road to the south of the site. To overcome this challenge, the City of Victorville built an intersection at Air Expressway and added traffic signals.

Challenge #3: The water system that was originally built at the base was not up to today’s standards. The development team had to create a design that would bring the water system up to today’s standards at a reasonable cost while considering the overall development plan. The design needed to increase water pressure for the Newell Rubbermaid building’s ESFR system without impacting the entire 8,500-acre master planned development. The team also had to anticipate water requirements while the building was already under construction. The water system was converted and improved during construction of the building.

The City of Victorville also embarked on three projects to improve the water pressure at the site which included increasing the pipe size on one of the main lines, closing off and opening certain valves and re-routing the water within the basin, and increasing the pump size from the main source.

Challenge #4: In addition, the team had to coordinate bringing power to the Newell Rubbermaid site. In April 2003, the public/private partnership strategically brought a major power source to SCLC with the 750 megawatt High Desert Power Plant to provide the backbone of electricity capabilities. This electricity is provided to SCLC tenants through the Victorville Municipal Utility Services at a reduced rate. However, since the Newell Rubbermaid building was the first to come online at SCLC, the team had to install power lines from the High Desert Power Plant to the site. The City of Victorville ran temporary power lines overhead where it was feasible and eventually moved them underground for their final installation.

Challenge #5: Lastly, to fast-track the permitting and construction process, the design and contracting team were engaged early on. The City of Victorville allowed phased permitting to accommodate early start of grading. The development team closely coordinated inspections with the City’s departments allowing the general contractor to move full steam ahead.

Newell Rubbermaid Moves In
After overcoming all of the development challenges, Stirling delivered a contemporary, state-of-the-art Class A industrial building for Newell Rubbermaid. The facility features highly articulated tilt-up concrete with intricate lines, interesting reveals and an oasis of landscaping. The building has 32’ ceilings, ESFR sprinklers, two and a half percent skylight coverage, and 60 dock doors, as well as 7,000 square feet of office space.

Newell Rubbermaid took possession of its facility September 1, 2007, and plans to create approximately 85 new jobs. The plant is expected to be at full capacity by October 2008. Newell Rubbermaid will be warehousing imported goods from Asia at its new corporate distribution center, from which it will redistribute its products throughout the United States.

Newell Rubbermaid is the first corporate distribution center built from the ground up at SCLC with construction underway on three more industrial buildings totaling 525,000 square feet.