Business Park and Industrial Development Handbook

1. Introduction

Origen Center, Phillips Plastic Corporation, Menomonie, Wisconsin.

The business parks of today are the product of an evolutionary process. From their antecedents in the manufacturing-oriented industrial estates and parks of the early 20th century, they have become dynamic workplace settings for business, incubators for new technologies, and employment centers that contribute to the economic life of many communities.

Flexibility is key to their success. Business parks not only accommodate a mix of activities such as storage, light manufacturing, research, and office functions, all in a planned and controlled setting; they also can be adapted in form and function to meet changes in the market. This attribute has been critical in recent years, as rapid technological innovation has created new requirements for the industrial sector. The growth of e-commerce and just-intime distribution systems has led to the transformation of warehouses into sophisticated logistics centers. The need for flexible work spaces that can house office and industrial activities under one roof has resulted in new hybrid buildings known as flex space. The growth of employee-intensive operations such as call centers and data processing centers at business parks has increased population densities there and resulted in requirements for more parking and better on-site amenities and services.

For occupiers, business parks offer the capacity to grow and expand at the same location. With multiple buildings of different types, sizes, and prices to choose from, all in one business park, startup companies can begin operations in small-scale incubator space and eventually move to more prestigious headquarters without ever changing their address. Established companies can centralize their operations, from high-visibility corporate headquarters to inexpensive back-office or flex space. Leasing space, buying a facility, or having it built to specifications are also possible options for occupiers in modern multiphase business parks.

For developers, business parks offer flexibility as well. Despite business parks’ being long-term investments with large budgets because of their size and infrastructure requirements, developers have the benefit of deciding whether to sell unimproved land parcels or completed buildings in a business park. Risk is also minimized by the opportunity to phase development, relying on positive market conditions or formal lease or sale agreements before proceeding with construction. Many developers will not initiate a project until a formal commitment has been received to lease or buy a major portion of the project.

Communities reap potential benefits from business parks. In an era of increasing competition to attract new businesses and jobs, many governments see business parks as a tool to stimulate economic development. In some cases, the argument is strong enough to warrant the public sector’s active participation in the formation of business parks and the provision of tax incentives or financing assistance to developers.

What Is a Business Park?

A business park is a multibuilding development planned to accommodate a range of uses, from light industrial to office space, in an integrated parklike setting with supporting uses for the people who work there. They can range from small parks on several acres to facilities of several hundred acres or more.

The process of planning, designing, developing, and managing business parks is integrated and coordinated. Local master plans and zoning regulations regulate such things as the percentage of site coverage, uses, building setbacks, and easements. Developers may also adopt additional development restrictions such as covenants, conditions, and restrictions (CC&Rs), design guidelines, or other regulations specific to the project to ensure that the quality of their investment is protected over time.

Business parks service a range of activities and product types, each with specific requirements: warehouse/istribution; manufacturing and assembly; flex/high-tech usinesses; offices; showrooms; incubator space; telco otels; service businesses, including hotels and conferece centers; and convenience retail stores.

Some key design elements help make a business park successful:

Flexible Master Plan—A master plan that anticipates change is essential to serving diverse markets over the long term. Flexibility is maximized by a lot layout that allows parcels of varying sizes to be subdivided or combined based on demand, by a road system that provides access to all portions of the site, and by utility systems that can be easily upgraded or modified.

Attractive Landscaping and Public Spaces—A winning landscape plan ensures that the entire development has a cohesive, parklike appearance that takes advantage of the site’s topography and natural features. Particular attention is paid to visible and strategic areas such as building entrances, outdoor gathering spots, and parking and recreation areas.

A Winning Combination

The first aspect of Indianapolis’s Intech Park—high-tech infrastructure—is a prerequisite for any development that claims to be a technology park. The far less obvious accomplishment of Intech Park, however, is its response to the human aspect—the ever-increasing importance of staff recruitment and retention within knowledge-based industries.

Recruiting and retaining highly skilled employees in this industry requires a carefully crafted mix of financial and benefit-related compensation as well as an ability to offer the less tangible quality of life so many people seek. Indianapolis-based Lauth Property Group’s development plan for Intech Park offers high-tech infrastructure combined with a high-quality work environment both inside and outside the tenants’ space, which it hopes will attract and retain employees.

The 210-acre (85-ha) Intech Park is Indianapolis’s largest technology park; its master plan is based on research showing that high-tech employees place a high value on access to natural environments. To capitalize on this fact, Indianapolis-based Ratio Architects developed a master plan that favors an environment that creates a strong identity through the use of natural environments.

The park includes more than 13 acres (5 ha) of waterways, 2.5 miles (4 km) of walking/fitness paths, and a recreation/picnic area. Ratio designed the park around some of the site’s natural features, including an eight-acre (3-ha) woodland and a small wetland. Designers moved the park’s entrance to preserve its mature trees, including a giant oak tree that is older than the state of Indiana.

The park includes aquatic plants and alternative storm-water management facilities to ensure that the water released from the site is controlled in volume as well as cleaned of many nonpoint source pollutants. Wetlands serve as the primary method of stormwater management for the project, and existing natural features have been preserved and enhanced. Ecoswales in the parking areas serve as point-source cleansers for runoff.

Intech Park, Indianapolis’s largest technology park, offers a high-quality work environment with fitness and recreation areas.

Pedestrian pathways and a substantial green spine offer tenants the opportunity for casual exercise in a natural environment. The city is building a safe and user-friendly connection to the 2,000-acre (810-ha) Eagle Creek Park to allow tenants to expand their exercise routines.

The juxtaposition of the natural elements of the Intech site with high-tech infrastructure has created an attractive environment for companies seeking a new location in Indianapolis.

Source: Kenneth M. Boyce, A Winning Combination, Urban Land, April 2001, p. 34.

On-site Amenities and Services—Expectations for on-site amenities and services for employees have become higher. In addition to contributing to a more interesting and desirable working environment, amenities can help distinguish a project in a competitive market.

Flexible Building Design—Each building type found at business parks has distinctive building requirements, but all require functionality and flexibility to meet changing market conditions and occupiers’ needs. Flexible building design starts with basic considerations such as the size and depth of floorplates and moves into advanced technical systems that help make a building smart.

Appropriate Parking—Parking ratios are increasingly important considerations for occupiers of business parks. And while it is important to provide the correct number of parking spaces for the number of employees, it is also important to ensure that parking areas do not detract from the business park’s overall image.

Efficient Circulation—Whether vehicular or pedestrian, circulation in a business park should be direct and clearly marked. The different and often conflicting needs of trucks, automobiles, and pedestrians must be accommodated.

The distribution and training center for Konica Business Machines in Huntington Beach, California.

Categories of Parks

Many business parks offer a conventional mix of warehouses, flex space, and offices to meet the needs of a range of occupiers. Over the past 20 years, however, more specialized types of business parks have emerged. Although each of them can be categorized by a distinctive function and design characteristics, product types and their users overlap considerably:

Industrial Park—Modern industrial parks contain large-scale manufacturing and warehouse facilities and a limited amount of or no office space.¹

Warehouse/Distribution Park—Warehouse and distribution parks contain large, often low-rise storage facilities with provisions for truck loading and parking. A small proportion of office space may be included, either as finished space built into the storage areas or housed in separate office structures. Landscaping and parking areas are included, but because of the relatively low ratios of employees to building area, a wide mix of on-site amenities for employees is not available.

Logistics Park—Known as commerce parks in the United Kingdom and Gewerbeparks in Germany, such business parks focus on the value-added services of logistics and processing rather than warehousing and storage. As centers for wholesale activity, they may also provide showrooms and demonstration areas to highlight products assembled or distributed there.

Corporate parks are the latest step in the evolution of business parks. While they may look like office parks, they often go beyond the traditional office space to include research labs, light manufacturing, retail uses, and hotel and conference centers. Pictured is Prairie Stone Corporate Park in Hoffman Estates, Illinois.

Research Park—Also known as research and development (R&D) and science parks, these parks are designed to take advantage of a relationship with a university to foster innovation and the transfer of technology. Facilities are typically multifunctional, with a combination of wet and dry labs, offices, and sometimes light manufacturing and storage space. Biomedical parks are a specialized version.

Technology Park—Technology parks cater to high-tech companies that require a setting conducive to innovation. They rely on proximity to similar or related companies, rather than a university, to create a syner-gistic atmosphere for business development.

Incubator Park—The needs of small, startup businesses are met in incubator parks or designated incubator sections of research or technology parks. Often supported by local communities through their economic development agencies or colleges, they provide flexibly configured and economically priced space, as well as opportunities for shared services and business counseling.

Corporate Park—Corporate parks are the latest step in the evolution of business parks. Often located at high-profile sites, they may look like office parks, but often the activities and uses housed there go beyond traditional office space to include research laboratories and even light manufacturing. Supporting uses such as service-oriented shopping centers, recreational facilities, and hotel/conference centers are provided as a focus rather than an afterthought.

Origins of Today’s Business Parks

The first planned industrial estate was begun in 1800 in Manchester, England, when a private company, Trafford Park Estates, Ltd., purchased a 1,200-acre (485-ha) country estate on the Manchester Ship Channel adjoining the docks. This industrial district, served by more than 35 miles (55 km) of railroad, was dominated by heavy manufacturing. It remained the world’s largest planned industrial estate until the 1950s, when larger facilities were developed in the United States and Canada. Although this first planned industrial development was served by navigable deep water, few subsequent parks have been accessible by water transportation.²

The first planned industrial districts in North America were created in Chicago. Their focus was on manufacturing, and the catalyst for their development was access to railroad lines and plentiful supplies of electric power and steam. Representatives of the Union Stock Yard and Transit Company undertook development of the Central Manufacturing/Original East District to attract additional freight for the company’s belt line. This 260-acre (105-ha) tract was located less than three and one-half miles (5.5 km) southwest of downtown Chicago. It featured buildings with a uniform height of four stories, private rail sidings for each building, and streets laid out on a grid. Landscaping, planting strips, and ornamental street lighting were an integral part of the design.

By 1910, the management of the Central Manufacturing District had acquired 80 acres (32.5 ha) for a second project, the Pershing Road Development. Located diagonally opposite the Original East District, the Per-shing Road Development opened in 1916. This pioneer industrial district had notable site characteristics that were forerunners of park designs implemented several decades later. Rail access was placed at the rear of the district, and major buildings were oriented to a major traffic thoroughfare, creating a street frontage that faced a public park.

The Clearing Industrial District was another pioneer industrial district development in the Chicago area. Organized by private real estate developers and opened in 1900, this 530-acre (215-ha) project took advantage of a location adjacent to rail yards and the Chicago Municipal Airport. Its plan called for 40-acre (16-ha) superblocks, each with access to the main rail lead.³

The CACI flex-tech building at Corporate Point North, Chantilly, Virginia.

Research Parks

In the 1950s, with the prospect of dwindling funds and a changing economy, universities across the country began looking for a way to connect universities, industry, and government through research. The result is today’s research parks.

According to the Association of University Related Research Parks, a research park (or technology incubator) is a property-based venture that has:

existing or planned land and buildings designed primarily for private and public R&D facilities, high-tech and science-based companies, and support services;

a contractual and/or formal ownership or operational relationship with one or more universities or other institutions of higher education in scientific research;

a role in promoting research and development by the university in partnership with industry, assisting in the growth of new ventures, and promoting economic development; and

a role in aiding the transfer of technology and business skills between the university and industry tenants.

A variety of models exist for the ownership and financial structure of research parks and for the relationship between the park and the university. Research parks may be structured as not-for-profit or for-profit entities, and they may be owned wholly or partially by a university or a university-related entity. Other models for research parks call for ownership by a nonuniversity entity but include a contractual or other formal relationship with a university, for example, joint or cooperative ventures between a privately developed research park and a university. The appropriate model for a given research park can be selected only after careful consideration of several critical factors, including the mission of the research park, the university’s mission and financial capability, the nature of sponsored research, the level of community support, and the real estate market.

The first university-related research parks included Stanford Industrial Park in California, Research Triangle Park in North Carolina, and University City Science Center in Philadelphia. These three parks established the framework for today’s research park models. Collectively, they established the prototype whereby research-linked development could provide the foundation for local economic development while establishing links between corporate and university knowledge bases to stimulate innovation, attract corporate R&D, and create new revenue for the university.

The finance models used by research parks are as varied as the ownership models and range from private financing to public financing to hybrid structures. In addition to private capital accessed through private developers, project capital can be supplemented by university funds, by private foundations, or by state and local appropriations and economic development funds. Interest has increased recently from venture funds that want to seed the real estate opportunities and create hatcheries for technology startups.

University Research Park in Irvine, California, reinforces the idea of place with three complementary building design prototypes. It also uses open space to create a quality work environment.

Communities increasingly view universities as more than a partner in urban renewal and job creation: universities today are seen as critical economic engines in today’s knowledge-based economy. Research parks can provide a means of technology-led economic development, and regional pressures can thus be exerted in the hope that economic benefits—jobs, a strengthened tax base, urban development or redevelopment, opportunities for technology transfer—will result. Certain internal forces also push universities to spearhead the development of research parks: the pressing need to maintain a competitive advantage in recruiting and retaining faculty, students, and staff; the need for increased joint research projects, student jobs, faculty consulting contracts, and state-of-the-art facilities. At the same time, university stakeholders demand that assets be managed with increased rigor, creating pressure not only to monetize the intellectual capital of the university but also to enhance the value and utility of the real estate—the land and the facilities—on campus and off. Other objectives may include enhancing the image of the campus edge, sometimes related to near- or long-term landholding strategies or the desire to take advantage of excess government properties or other geographically well-positioned opportunities for acquisition.

It has been said that teachers, like technology, touch the future. The combination of these two forces has led to the immense success of university-related research parks across the United States and around the world.

Source: Diane Hartley, senior vice president, Spaulding & Slye Colliers, Washington, D.C.

Building Corporate Community

Cisco Systems has a new tactic to attract and keep quality employees. Rather than relying solely on salary and health plans, Cisco plans to construct a corporate campus in Fremont, California, that will offer many of the benefits of working in a traditional downtown business district, including a walkable environment, restaurants, health clubs, services, and a transit station as an alternative to the usual gridlock on California freeways.

Cisco’s facility will be the first major project built at Pacific Commons, an 8.3 million-square-foot (771,400-m²) employment district in a long-range master plan by San Francisco-based Catellus Development Corporation. Envisioning an urbane environment anchored by parks, a sports complex, tree-lined walkways, a 12-story hotel and conference center, and 80,000 square feet (7,435 m²) of retail space, the nucleus of Pacific Commons is a great street where the project’s tallest buildings will be placed shoulder to shoulder to create the density needed to generate a lively, walkable environment. Although on-street parking will be available, Pacific Commons also will include extensive structured parking as part of a $100 million investment in infrastructure. A four-mile (6.5-km) walking and biking trail for commuters will connect public spaces to the San Francisco Bay National Wildlife Refuge. When completed, Pacific Commons is to look and function more like an urban downtown than a suburban office park, partially because a proposed Altamonte Commuter Express/Amtrak transit station will be located a half mile (0.8 km) from its center.

The density of Pacific Commons was made possible by a factor that would have stopped many projects in their tracks: the discovery in 1996 of three endangered or threatened species after the project had been approved. As a result, Catellus was required to set aside nearly half the 800-acre (325-ha) site—land valued at perhaps $425 million—for mitigation.

Rather than abandoning the project, Catellus completely revised it, working closely with the city of Fremont as a planning partner. The key to the revised plan was to allow Catellus to keep the project’s proposed square footage in half the land area, including increased density near the transit station.

It could be called a variation on new urbanism for corporate business parks. This new type of office park functions more like a traditional college campus in relation to the town where it is located. It is integrated with existing neighborhoods, but it creates its own self-contained community with access to mass transit and strives to be more sensitive to the natural environment. It also embraces offices, research and development, warehousing, and distribution under many roofs. It is a multiclass—rather than a white-collar—society.

The quality of the work space for biotech and high-tech companies has become increasingly important, partially in recognition of the fact that creativity and intellectual capital, not the traditional fixed assets of property and industrial machinery, are today’s most valuable corporate assets.

While they might not need expensive signature buildings or corporate-nameplate campuses, high-tech companies need to grow and mature in settings that encourage community, and it takes more than the latest cable technology for high-speed Internet access to effect it.

High-tech employees often work long hours, so long that the office becomes like home, yet their supposedly domestic settings often are tilt-up, spec-built, windowless structures with unappealing outdoor spaces. They often lack even basic services like a sandwich shop within walking distance. To preserve both their mental and physical health, workers who look at screens all day need places to connect with nature. In today’s era of laptop computers, cell phones, and other portable technologies, functional outdoor spaces can increasingly double as meeting places, especially in regions with relatively mild climates. Having functional outdoor space may not only increase a company’s profits, workplace efficiency, and creativity but also attract the best workers.

At the same time, high-tech and biotech companies are justifiably cautious about investing large sums to upgrade their corporate facilities. They are not about to revive the 1950s and 1960s era of elaborate corporate campuses built on a scale reminiscent of English country estates. Facing cutthroat competition and technologies that change at the speed of DSL, today’s companies plan facilities for only the next few years. Many still are investing in research and development and may not yet be profitable. They report little interest in making architectural statements about power and permanence.

When companies plan for effective corporate communities, they must consider their business mission and organizational structure. Which groups in the organization need to collaborate? How can plazas and courtyards contribute to productivity? How can biotech and high-tech companies navigate the approvals process when review boards only dimly understand their needs?

With higher densities, plenty of retail space, and an urban feel, Pacific Commons may show traffic-clogged Silicon Valley that there is an alternative to faceless tilt-up buildings engulfed by parking lots and traffic jams.

Source: Adapted from Ken Kay, Building Corporate Community, Urban Land, January 2001, pp. 72–79.

Site plan of the Pershing Road Development. Note the extensive frontage on McKinley Park and avoidance of street-level rail crossings.

The success of the pre-World War I rail-served districts in Chicago encouraged railroad companies to develop more rail-oriented districts in the 1920s and 1930s. Among the largest and most representative of districts developed during that period is the Los Angeles Central Manufacturing District. The original 280-acre (115-ha) parcel was established in 1922 by the developer of the Central Manufacturing District in Chicago. The Atchison, Topeka, and Santa Fe Railroad acquired it in 1928, and the Bandini Area was added in 1930. Both districts were connected to transcontinental rail service by the Los Angeles Junction Railway, a Santa Fe affiliate.

The gridiron street layout of the original parcel—with rail service to every site—was to become the pattern for many future industrial parks. Although five-foot-wide (1.5-m) sidewalks were originally provided, they were not built in the expansion, nor are they included in most postwar parks. During the 1920s, the ornamental street lighting and diagonal lead tracks used in the early Chicago districts were also discarded, and the amount of landscaping and planting strips was reduced.

Some older planned industrial parks—particularly those that provided an attractive, landscaped setting with wide streets and an adaptable spatial organization—have been able to compete successfully with the newest generation of business parks by continuously updating themselves physically and functionally.

Following World War II, the modern industrial park emerged as a major trend in industrial development. In 1952, the National Industrial Zoning Committee adopted a definition of industrial parks that was amended in 1965 and adopted in 1966. Its definition emphasized the control and administration of a park by a single body, and regulation of permitted uses by protective minimum restrictions, including size of site, parking and loading regulations, and building setback lines from front, side, and rear yards.⁴ The Dartmouth College Conference on Industrial Parks in 1958 produced a definition of industrial parks that echoed many of the same planning considerations while emphasizing efforts to ensure compatibility between industrial operations in a park and the surrounding community.⁵

The 1950s and 1960s saw the advent of specialized forms of business parks, such as research parks specializing in prototype development, laboratory work, light manufacturing, assembly, and related technological activities. Communities and universities actively promoted the concept of research parks as an economic lever to stimulate local economies and help revitalize urban areas. The benefits of attracting new types of businesses and highly educated workforces were anticipated to impact not just the surrounding community but also the region, country, and society as a whole.

Around this time, business parks shifted from rail-oriented urban sites to suburban areas with freeway and airport access. Proximity to housing, shopping, cultural amenities, and educational facilities also become more important.

The administration buildings at Compaq Computer Corporation in Houston, Texas.

Good for the Goose

Goose Island, a 146-acre (60-ha) industrial area in the North Branch of the Chicago River about 1.5 miles (2.5 km) northwest of downtown Chicago, is no stranger to economic change. Once primarily residential, the island became exclusively industrial as water-borne and later rail-based commerce shaped Chicago’s economy. As late as the mid-1970s, even in the face of interstate highway development and economic decentralization, it continued to prosper.

By the mid-1980s, however, Goose Island had declined, burdened by economic dislocation and restructuring in traditional industries, outmoded buildings, deteriorated infrastructure, concern over environmental contamination, and other problems. Today the island is experiencing a dramatic rebirth of industry and commerce. Some of the new companies investing in the area are traditional manufacturers and distributors, others serve and support greater downtown markets, and still others are emerging e-commerce firms.

The area long has been devoted to manufacturing and warehousing. A Greyhound Bus maintenance facility, a waste transfer station, and a lumberyard are long-time island residents. Among the uses on the west riverbank are a metal scrap yard, a concrete plant, a paper-recycling center, a salt-processing facility, a luxury auto dealer, and a boatyard. Beyond that area lie traditionally working-class neighborhoods, some of them now seeing an influx of higher-income residents, art galleries, restaurants, and similar uses. East of the island are the Cabrini-Green public housing project—one of Chicago’s most notorious, now being redeveloped—Montgomery Ward’s former headquarters, and expanding upscale retail and residential areas.

The growing residential population and interest in converting older manufacturing properties on Goose Island and in neighboring areas to residential uses ignited debate over the need to preserve manufacturing districts and jobs. Owners of vacant property had little incentive to invest, anticipating residential conversion. Amid controversy and opposition from some property owners, the Chicago Department of Planning and Development, working with the local economic and employment development (LEED) council of the New City YMCA, created a planned manufacturing district (PMD) in 1990 to cover the island and to preserve manufacturing and commercial uses.

Since then, Goose Island has boomed. The private sector invested an estimated $130 million in the island during the 1990s, according to city of Chicago figures. Today, 35 companies call the island home—double the number in 1990. And employment is up from 1,300 to more than 5,000.

Shaping Redevelopment

Goose Island’s economic rebirth is the product of public policy and public investment in infrastructure, aggressive use of tax increment financing (TIF), local industry involvement, effective public/private partnerships, increasing sophistication in dealing with brownfields, and a strong economy.

Using various sources, the city of Chicago and the state of Illinois have funded more than $76 million in public investment since 1992 to rebuild bridges, streets, sewers, and seawalls and to improve traffic signalization and other infrastructure on Goose Island. The city of Chicago created TIF districts to fund capital improvements, job training programs, site cleanup and preparation, and more. Initially, the city created the districts for individual developments, but in 1996, it designated all of Goose Island a TIF district, effective until 2018.

Environmental legislation clarified standards and procedures for addressing past contamination, allowing developers and lenders to assess and control their potential liability in developing brownfield sites on Goose Island. The Illinois Environmental Protection Agency adopted new final cleanup regulations in July 1997 that standardized the cleanup process and set remediation objectives that were site specific and risk based, differentiating between land intended for industrial use and residential use.

Community partnerships also played a role in Goose Island’s revival. Established in 1982, the LEED council works to improve the long-term economic well-being of area businesses and residents by providing services and leadership. The LEED council has worked to help establish PMDs for Goose Island and the neighboring industrial corridors along Clybourn and Elston Avenues. The organization also has worked with many companies locating on the island, including Federal Express, Republic Windows and Doors, and Jetro Cash & Carry, to recruit and train workers, often minority residents of nearby neighborhoods.

New and Changing Uses

A prominent visual anchor near the southern tip of Goose Island, Sara Lee Branded Foods, occupies a renovated eight-story former warehouse building with sweeping views of Chicago’s downtown to the southeast. The structure, which had been vacant for 25 years, houses the company’s headquarters (relocated from downtown Chicago), test kitchens and R&D operations (relocated from the Chicago suburbs), and meat research (relocated from Michigan). Sara Lee wanted to bring the groups, particularly marketing and R&D, together to enhance product development.

Sara Lee occupies the second through eighth floors. A deli and an exercise facility overlooking the river occupy the ground level, and retail uses are planned. The entire $38 million project, developed by the Chicago-based Drew Group, includes renovation of the existing 125,000-square-foot (11,620-m²) structure for offices and a 25,000-square-foot (2,325-m²) addition to house the test kitchens, meat freezers, and laboratories. The freezers require high bay space that could not be accommodated in the existing structure.

Another symbol of economic change sits on the northern tip of the island, where a former manufacturing building is being renovated for e-commerce and Internet companies. Divine interVentures, an Internet venture capital and holding company engaged in business-to-business e-commerce, plans to build a campus for the companies it invests in so that they can take advantage of shared services. Named Habitat Goose Island, the planned $60 million renovation and redevelopment will create 338,000 square feet (31,400 m²) of new and renovated buildings on a 7.6-acre (3-ha) site. Project amenities will include green space, a riverwalk, a gym, cafeterias, and a parking garage.

Kahnweiler and Smithfield Properties initially planned to redevelop the property into one new and two renovated buildings with flexible spaces intended for a variety of industrial and commercial users. Divine interVentures decided to take the entire site, which offers nontradi-tional space, excellent visibility, and a location facing a major arterial road across the river. It also offers access to an extensive labor pool.

An Arresting Transformation

Perhaps the most arresting symbol of economic transformation is the former Montgomery Ward catalog building, which now is a national and Chicago landmark, across the North River Channel from Goose Island’s southern tip. In 1908, Montgomery Ward built an eight-story structure with 145,000-square-foot (13,475-m²) floorplates to house the company’s catalog operations. Subsequent additions totaled more than 1 million square feet (92,935 m²). The catalog building was situated on the river to allow barges to unload directly into it, and railroad tracks ran inside the east side of the building. Where giant conveyors once moved goods for distribution across the country, Internet servers, fiber-optic cables, and related equipment soon will move information in the electronic economy.

A joint venture of Angelo Gordon & Company, Centrum Properties, Inc., and Taconic Investment Partners LLC purchased the catalog building and other of Ward’s properties totaling 28 acres (11 ha) in the Chicago Avenue and Kingsbury Street areas for $62 million. The venture plans to build a mixed-use development, Kingsbury Park, which will include approximately 1.5 million square feet (139,405 m²) of commercial uses in the catalog building and more than 2,600 residential units in various single-and multifamily buildings outside the PMD. Affordable housing and significant open space are planned.

Goose Island, Chicago, Illinois.

The commercial redevelopment, dubbed e-port, will take place in the former catalog building’s south section (the original structure) and on the lower floors of the north addition; upper floors will be residential. Two types of users have been targeted; the first is telecom companies seeking space for switches and routers and related equipment and companies seeking space for Internet servers and related equipment. The second group of targeted tenants comprises e-commerce, technology, consulting, and new media companies attracted by the telecommunications companies and the opportunity to attract staff from Kingsbury Park and surrounding residential areas.

Goose Island’s access to downtown and to Chicago’s expressways and its proximity to a varied labor force may make it seem that redevelopment of the island was inevitable. But even as late as the early 1990s, few would have anticipated today’s success. The area’s redevelopment is testament to the fact that, under the right circumstances and with public/private investment and involvement, a market exists for inner-city industrial development. It also illustrates that older areas can adapt to changing economic and real estate conditions.

Source: Adapted from Jerry W. Szatan, Good for the Goose, Urban Land, September 2000, pp. 113–17+.

Light industrial uses such as manufacturing and warehouse/distribution facilities are still integral parts of many business parks today, but the proportion of office space and new uses such as call centers and telco hotels is growing. Heavy industry, once a significant element of early planned industrial districts, is seldom included for several reasons. Economies have shifted away from heavy manufacturing, and communities concerned about potential environmental impacts prefer lighter, highertech businesses as employment generators. Zoning regulations applied to business parks also may restrict their presence. Large manufacturing companies also generally choose to locate at standalone sites farther outside the city where land is cheaper.

The blurring of the distinction between industrial and office activities as illustrated by research parks has led to the corporate business parks that have flourished in recent years. These new-style corporate communities place considerable emphasis on their environment. Not only are they typically more integrated with surrounding neighborhoods than earlier business and office parks; they also provide a sense of place for the community and for employees working there. For example, Cisco Systems’s new 143-acre (58-ha) campus in Fremont, California, features office, R&D, and warehouse and distribution space as well as such services as shopping and transit facilities, all on one campus. In the large-scale Legacy corporate park north of Dallas in Plano, Texas, a town center based on new urbanist principles is being added. Its plan includes a modified street network, ground-level retail stores with offices and apartments above, parking, and entertainment venues.

Zoning and Community Regulations

The history of industrial zoning in the United States has implications, even today, for the zoning regulations affecting business parks. The zoning system used in this country has tended to place industrial uses at the bottom of a hierarchical pyramid. From the first comprehensive zoning ordinance adopted in New York City in 1910 until the mid-20th century, zoning in most communities was based on a ranking of land uses from residential as the highest and most desirable, followed by commercial, to industrial at the bottom. The logic was that land unsuitable for agricultural, residential, and commercial uses could be used for industry. One result of this cumulative concept of zoning, with higher uses permitted by right in the lowest-use zones, was that large tracts of vacant land zoned for industry could not be protected from intrusion by residential or other uses.

In the 1950s, greater attention was placed on reserving adequate land for industrial purposes rather than forcing it to take place on leftover land unusable for other purposes. A major motivation for this trend was to retain the industrial employment base found in large industrial areas. The protection of industrial districts is still an issue today, with growing pressure to allow other uses in areas zoned for industrial use.

This 160,000-square-foot (15,000-m²) warehouse in Hanover, New Jersey, is being renovated in an adaptive reuse project. To allow for the most sunlight, a skylit street was designed with open-air atriums linking the entry lobbies, restrooms, and a food court/commons/retail area. An accent-colored fin, which doubles as a roof screen, draws visual attention to the project.

Dowe Business Park in Union City, California, built by Cham-berlin Associates in the mid-1980s, has successfully weathered downturns in the market by offering a range of building types that satisfy a wide market. Office and flex buildings create attractive frontage for the development as well as provide a buffer between the more industrial uses at the back of the site and adjacent residential areas. Extensive landscaping, public sculpture, picnic tables, and basketball hoops are amenities for employees. With 1,000 people working on site, the park is the city’s largest employment center.

Principles for better planning of industrial land were promoted by seven professional organizations (including the Urban Land Institute) that formed a working group known as the National Industrial Zoning Committee. Many of the committee’s 12 Principles of Industrial Zoning are still relevant for planning today’s business parks. One result of these principles, though, was to set industrial areas apart from other uses. Although doing so made sense when industry meant heavy manufacturing, it is less appropriate for light manufacturing and other clean industrial activities.⁶

Performance standards were introduced to industrial zoning at the end of the 1950s. Based on the concept that the impacts of one land use on another are more a function of intensity of uses than categories of uses, this type of zoning replaces a list of excluded industries by specific, measurable performance standards, with a focus on the end result. Performance-based planning is intended to be more flexible and less bureaucratic, although in practice it is often difficult to administer. For industrial development, it has been seen as a means of retaining industry in a community while ensuring that it is compatible with surrounding residential neighbors.

The industrial park zone became more widely accepted about the same time that performance standards first were adopted in some areas. Many planners and zoning administrators felt that the space and aesthetic standards of the industrial park zone would be more easily administered than the engineering requirements of performance standards. The purpose was to provide for the planned subdivision of an area of land—usually a minimum of 25 to 100 acres (10 to 40 ha)—into a number of industrial sites to be developed under space standards considerably more restrictive than the usual industrial districts permitted by a zoning ordinance. To achieve a parklike environment, low building coverage ratios, wide building setbacks, and large landscaped areas were required. This zoning designation had various names, among them manufacturing restricted (MR), manufacturing light restricted (MLR), or industrial restricted (IR). In areas designated as research and development (RD) or science park (SP), industrial occupancy was severely restricted.

Business park zoning, a more flexible variation of the industrial park zone, became popular in the 1980s. This type of zoning expands the range of allowable uses while carefully restricting industrial uses that might be a nuisance to other tenants. As in the older industrial parks, space and aesthetic standards, as well as performance standards, apply. Newer business park and industrial park zones contain fewer specific development standards relating to issues such as density or building height. Instead, these factors are determined at the time the concept plan or site plan is approved by the local government.

Today, zoning designations affecting business parks still vary widely by location. Business park developments governed by the industrial or office sections of the zoning ordinance can come under a variety of designations, such as business park (BP), planned development industrial park (PDIP), planned development office park (PDOP), research and development park (RD), or mixed-use planned development zone (MXPD). In communities where the zoning regulations are not sufficiently advanced to allow a mix of uses, developers may divide the business park site into discrete segments with different types of uses to achieve this goal.

The lobby of the three-story building at Pine Meadow Corporate Center, Chicago, Illinois.

While zoning ordinances have traditionally separated land uses from one another and limited the mix of uses in business parks, a move toward greater commingling of different land uses has occurred in the last ten to 15 years. For business parks, the recognition that these types of development often end up as sterile work settings without basic services or amenities for employees has led many communities to approve developers’ concept plans and zoning requests for business parks that include shopping facilities, restaurants, hotels, and even residential uses.

Covenants, Conditions, and Restrictions

CC&Rs are private land use controls and standards. They are most commonly used in master-planned business parks where most or all of the occupiers own their own building or have a long-term lease. They are less common in situations where occupiers have no ownership rights and the owner of the park stays active throughout the life of the investment and is responsible for management of the park and maintenance of all exterior common areas. If CC&Rs are not used, rules and regulations are attached as exhibits to each tenant’s lease to ensure that the park’s rules are followed.

CC&Rs take the form of a legally enforceable instrument filed either with the plat or with each deed. They supplement municipal regulations, such as zoning and subdivision controls, and apply to virtually every aspect of business park development, including site coverage, architectural design, building materials, storage requirements, building use, parking requirements, signage, and landscaping.

CC&Rs are generally more detailed than zoning regulations, which by their nature must be suitable for general application throughout a city or county. General standards in a zoning text seldom regulate features such as topographic characteristics, views, maintenance standards, sign-age, and site edges that might be unique to a particular site. Thus, a business park developer who wishes to ensure limitations on occupancy, restrictions on exterior storage, or guidelines for landscaping or building materials should prepare detailed protective covenants that are specifically suited to the project’s design concept and site.

CC&Rs can be more restrictive than zoning requirements but not less so. For example, they can decrease the intensity of land use but cannot increase site coverage beyond that provided in the zoning ordinance. Any space standards that may not be adequately covered in the zoning code may also be included—for example, setbacks, side yards, off-street parking, off-street truck loading and turnaround space, and building heights.

Design guidelines can be included as part of the CC&Rs or as a separate document. They establish very specific, uniform guidelines and criteria regarding site planning, architectural design, signage, and lighting. They are often used by design review committees set up under the provisions of the CC&Rs to evaluate proposed new developments in the business park.

The Development Process

The development of an industrial project such as a business park follows a sequence of steps that can be identified but are rarely straightforward or linear. At a minimum, development requires the following elements: coming up with a concept or idea; refining it; analyzing its feasibility; negotiating contracts; making a formal commitment; constructing the project; completing, marketing, and opening it; and managing the new project (see Figure 1–1). At almost all stages, the developer must have an exit strategy.

The Development Team

The complexity of developing a major industrial facility or multiphase business park makes it imperative to engage experts in various disciplines to participate in all phases of decision making. A major role for the developer is to manage the team and ensure communication among its members.⁷

Land Planners

The land planners or site