Siting a new facility

Expansion or relocation of one’s business, whether the change involves a small distribution site, a large manufacturing facility — or anything in between — is always an exciting and challenging process. Before you get to the point of determining how you’ll furnish, staff and stock your new facility, it’s important to take time to consider how you’ll use your new location, what restrictions will govern its use, and how you can fit the pieces together to ensure that your new location is one that will suit your company’s long-term needs. Below are some key legal and business issues that should be considered when siting a new facility, whether your business involves the manufacture or packaging of a product or raw material, its distribution or retail sale, or any combination of those.

What considerations related to access are critical?

While access to a facility seems like a simple issue (is there a road that gets me there?), it is often anything but, and insufficient or inconvenient access to necessary modes of transportation can make an otherwise ideal location undesirable. Beyond simple passenger vehicle traffic, the specific transportation needs associated with agribusinesses are of chief importance when scouting a new location. The following are some basic considerations related to particular transportation needs.

• Rail Transportation
If your company intends to ship or receive raw materials or finished product via railway, it is essential to understand whether rail access is available or can be made available, and what kind of investment — in both time and money — will be needed to ensure adequate access. Some questions to ask in this process include: (1) whether the location currently includes on-site or adjacent rail access, including a spur track or siding; (2) whether the current property owner contracts with a rail service provider; and (3) if no access exists, what steps will be required to gain such access, either on-site or nearby?

Existing contracting arrangements with rail carriers can often be assigned to a new owner. However, this process can require an upfront investment of both time, with transfer approvals taking up to 12 months to complete, and money, to satisfy certain investigations of the property or improvements to the existing rail often required by the carrier. If no rail access exists, your capital costs should include expenses related to laying rail, legal fees for contract negotiations with the carrier, and initial and ongoing fees charged by the carrier. In most cases, it makes sense to contact the local rail carrier early on in the process to determine what your options are with respect to securing rail access.

• Semi-trailer Truck
Semi-trailer truck access to a property presents different and greater obstacles than those posed by standard trucks or passenger vehicles. Semi-trailer truck movement requires a larger turn radius as it relates to structures, overhead conveyors and loading mechanisms located on the property. As a result, the layout of a facility is critical to ensure orderly movement on and off the property, as well as a dedicated parking area to handle overflow traffic and trucks waiting to gain access to the loading dock for loading or unloading.

Ideally, semi-trailer trucks would move in and out of a property from the adjacent access roads with a left-in, left-out or right-in, right-out pattern. This configuration minimizes the need to reposition the truck on the property, and a well-designed traffic flow plan will also allow trucks to enter, wait, load/unload, and exit the facility without impairing other vehicular movement around the property, and without causing trucks or other traffic to stray onto neighboring property.