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Business Park and Industrial Development Handbook
By Anne Frej
Urban Land InstituteCopyright © 2001 ULI-the Urban Land Institute
All rights reserved.
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-in-time 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 businesses; 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.
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.
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.
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.
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.
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.
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. 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.
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.
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, higher tech 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.
Excerpted from Business Park and Industrial Development Handbook by Anne Frej. Copyright © 2001 ULI-the Urban Land Institute. Excerpted by permission of Urban Land Institute.
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Table of Contents
2 Project Feasibility,
3 Financing and Investment,
4 Site Planning and Industrial Building Design,
5 Marketing and Leasing,
6 Management and Operations,
7 Case Studies,
8 Trends and Outlook,
Bibliography and Index,