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Engineering the Northwest: Inside Industrial Development · Industrial Advisors

• 0:00
  I'll follow up to that, Dan, and say, out of all the consultants,
• 0:04
  brokerage firm, consultants, everybody that does industrial deals in the
• 0:07
  valley, you have to have the top market share of any consultant.
• 0:11
  'cause I don't even know who your competitor is, honestly.
• 0:29
  Welcome to our Industrial Advisors podcast.
• 0:32
  You have Bill Conant and Matt McGregor, and we have fantastic
• 0:35
  guests with us here today.
• 0:37
  First time guests, Dan Bob Melly, who is a principal engineer with
• 0:43
  barkha and consulting engineers.
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  Dan has over 40 years of experience in the engineering space.
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  He is really one of the go-to guys in the entire market when it comes to.
• 0:54
  Big Lance, anyone that I know when it comes to land in the market.
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  Uh, so just a, a fantastic guest to have with us, A wealth of knowledge.
• 1:03
  Dan, thank you for joining us today.
• 1:06
  Well, you're welcome.
• 1:07
  Welcome to See you guys.
• 1:09
  Absolutely.
• 1:09
  Good to see you.
• 1:10
  Thanks for joining the show today.
• 1:12
  Tell us a little bit about Barau and what you guys do, and
• 1:16
  specifically what you do for them.
• 1:18
  Yeah.
• 1:18
  Well we've, like you said, I've been here at Bard Hausen for 40 years.
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  Started in 1985.
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  The company really started in 1980, and we grew from about
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  20 to 25 staff when I joined.
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  Up to about 225.
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  As of this last year, we recently merged with Core States, which is a, a
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  firm, an AE firm, primarily back east.
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  But now we have a lot more resources.
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  But our firm, especially on the industrial side, focuses on, you know, survey
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  planning, civil engineering, design, permitting, of course, landscape design.
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  Uh, lots of.
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  Upfront feasibility work on any size site to, uh, confirm what the requirements
• 2:04
  are gonna be, what the obstacles, what the constraints are, and help with
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  determining what the overall development costs are gonna be prior to starting even
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  a project and getting too far into it.
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  So we do a lot of that type of work.
• 2:18
  That's awesome.
• 2:19
  And I, and I will say, I mean, your name is definitely one of the, the biggest.
• 2:23
  Consulting names out there.
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  Tell us a little bit about the development process, kind of some
• 2:29
  of the challenges that you're seeing now over years in the past?
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  Yeah, like just in Washington State in general.
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  Yeah, and you know, a few of the big ones are currently finding sites that,
• 2:42
  that don't have major constraints.
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  I mean, we're now seeing sites that come back to us that developers
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  looked at years ago and determined that they weren't feasible, but.
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  Because of land being scarce, all pieces of land are being looked at again.
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  And of course part of the problem is the environmental constraints
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  have gotten more difficult.
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  Wetlands, floodplains, steep slopes developing on those types of properties.
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  The, uh, the environmental regulations on all of them have gotten tougher.
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  So.
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  You not only have a tougher piece of a site, you have more regulation and tougher
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  regulations to get anything permitted, and it just takes longer and it takes
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  more money and it takes a lot more work and time to get these projects permitted.
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  You also have, seemingly, we have more public or private entities that are
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  either appealing or providing comments.
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  That, uh, they don't want industrial development in their area, so
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  we're sure we're getting more of that than we used to, to.
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  So it's just more of a challenge.
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  It doesn't mean it can't be done, it's just you have to expect that it's
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  gonna take more time and money to get some of these big projects entitled.
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  By the way you mentioned.
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  Slopes.
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  I'm curious, was Sumner Ridge, was that a challenge with Birch on that, on
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  that slope and given, uh, all of that?
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  That, by the way, for the listener, that's uh, one of my favorite sites.
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  That's why Bill's laughing.
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  Yeah.
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  And that was the brains behind that one.
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  Yeah.
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  We could build on this thing.
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  Crazy slopes, right?
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  Yeah, that was, uh, and Jason Hubble from my office, senior engineer who,
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  who worked with Birch on that project.
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  And then that was a very tough site.
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  That was a site that Brian, uh, what was his last.
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  So eventually or originally owned and we did a lot of the entitlement work.
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  He got in a little bit of trouble, but um, yes, he did.
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  It eventually got, got developed.
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  Very tough side from a, a slope standpoint.
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  Yeah, that's right.
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  Yeah.
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  I wanna back up a little bit and talk about, you know, you guys.
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  With from a market share standpoint, have developed market
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  share like I have never seen.
• 4:43
  Right.
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  You've worked on multiple projects just to, you know, anything
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  Big Des Moines Creek, Tacoma.
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  Five, Bridgepoint, Tacoma, BNSF site, Prologis Park, Tacoma.
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  Right.
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  Pacific Logistics.
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  I mean, just almost any big project you guys have been on.
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  What's led to that market share.
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  So much dominance of your firm.
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  How have you guys done that?
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  Yeah, that's a good question.
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  And we're fortunate and we appreciate all our clients and
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  we do every type of development.
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  Not Indus, just industrial, but you know, back 20, 30 years ago.
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  When the industrial market really started taking off on, it just
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  seemed like more industrial development was starting to occur.
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  I became more focused on industrial development because those were my
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  clients and then they grew from that.
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  And we're in the valley here, right in the Kent Valley where the prime
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  industrial development started.
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  And so we did a lot of it here in the valley and then that.
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  Kind of expanded into Auburn and Sumner and even, even further in all directions.
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  And we just, our focus with this firm is really providing service
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  and we don't really market much.
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  We just try to do a good job, try to service our clients,
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  try to solve problems.
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  And you just developed that, I guess, list of clients and
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  developers and we were fortunate to.
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  Kind of get a name in the Pacific Northwest for doing
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  all types of development.
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  But I guess I was concentrating more on industrial and, and uh, just
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  gained a lot of clients and we, you know, I guess a little lucky too.
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  You gotta have some of that.
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  But we've been very fortunate, so, and we try to keep a client when
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  we get 'em, and it doesn't mean that we're not gonna have issues.
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  But the biggest thing is you solve the problems and you work hard.
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  And as long as you do that, you usually get your share of the work.
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  Well, I'll, I'll follow up to that, Dan, and say, out of all the consultants,
• 6:34
  brokerage firm, consultants, everybody that does industrial deals in the
• 6:37
  valley, you have to have the top market share of any consultant.
• 6:41
  'cause I don't even know who your competitor is, honestly, and you
• 6:45
  don't have to mention them here.
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  I'm just saying we don't even know 'cause we were talking
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  about that before the show going.
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  You just called Dan and team at Baren under all the, you know,
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  scope of what you guys do there.
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  I don't even know who else to call every other vendor, even if they're
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  great that we have, you know, we would have two or three right with you guys.
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  It's just Baren.
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  Yeah, that's it.
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  Yeah.
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  Well appreciate that.
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  And like I said, we feel fortunate, but there are some competitors
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  that come and go and there's.
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  There's always some out there, but we always say that we're not gonna get
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  all the work, but we just work very hard to try and do the best job we can.
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  Try to save money, try to solve problems.
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  When there's an issue, you jump on it.
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  We're not expected to be perfect, but as long as your clients know you.
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  You are interested in helping them and you're gonna solve the problems.
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  I guess that's the main thing, and that's always been our focus and
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  probably why we get our share of work.
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  And we're just gonna keep trying to do it.
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  'cause it's not getting any easier to get these projects permitted.
• 7:45
  Oh yeah, no, let's, let's.
• 7:46
  Yeah, let's stay on that topic because it's not getting easier for anyone.
• 7:50
  So when it comes to land entitlement, are there any policies within Washington
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  state that we should be aware of that are either in play right now or
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  that are coming that people should be paying really close attention to that
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  impacts the land entitlement process?
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  Yeah, a few that I can think of now guys, it seems like when industrial.
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  Or when the economy is good for too long and the industrial market's good for
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  too long, cities and counties sometimes start saying, listen, we feel like we've
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  had enough industrial development and where they used to support it, and if
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  they start getting feedback from the the community to put pressure on stopping
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  it or making it more difficult, that's where we start seeing some changes.
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  Pierce County has been in the process of changing their code out in the
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  rural area for industrial development and changing it to either make it more
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  difficult or eliminate some of that.
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  Mm-hmm.
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  That's in process now.
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  I think they kind of put it on hold for a bit, but a lot of the
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  developers in the Pierce County area have been watching that closely.
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  That's one area.
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  As you guys know, Kent, a few years ago, changed their industrial standards.
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  To try and reduce the amount of pure warehouse development.
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  And so they put restrictions on the number of warehouse dock doors per
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  thousand or per 5,000 square feet.
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  They put some additional design standards.
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  It's like closing the, and Kent, that's kinda like closing the barn door after
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  all the horses ran out, isn't it?
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  It's exactly, yeah.
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  Yeah.
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  A little late.
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  And then, um, the floodplain regulations.
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  Uh, keep getting tougher to deal with and the wetland stream.
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  Um, environmental regulations keep getting tougher.
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  The buffers get, you know, uh, larger.
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  So those are some of the things we've been seeing guys.
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  Um, the other is it's just taking more time.
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  It's, it's more complex to get these projects through the cities, whether
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  it's staffing, they're down on staff or they have too much of a backlog or.
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  They're just not as interested in, in industrial development like they
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  are on other types of projects right now, because a lot of entities feel
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  like they have enough, so they just don't go out of their way to really
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  put the effort into processing them.
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  That's how we feel anyway.
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  You mentioned Pierce County and obviously the changes in Kent, and
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  I know, uh, earlier in our careers, Auburn really kind of pushed back on
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  industrial and change a lot of zoning.
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  What's a municipality or a city I should say, that uh, really today
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  would embrace it and it would make it easier if there is one?
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  Yeah, well there's a few.
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  Lacey and Lakewood have been very prominent in.
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  Supporting industrial development.
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  Now Lakewood's starting to get some pushback from their community relative
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  to development around oak trees, but also in general, we've seen a little
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  bit of change in their support, their overall support for industrial.
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  It doesn't mean they won't process it, but I think their community is
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  starting to push back a little bit, even a little bit down in Lacey also.
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  But it's, you know, out there where the big industrial development
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  areas that we've done so much.
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  We've, it's always been supported down there.
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  Kent will still process permits if you meet their industrial standards and
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  they have two or three different zonings depending on where you are that require
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  different levels of design standards.
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  But, you know, we've done so much work in Kent.
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  They've always been great to work with, but they have some new
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  standards that have to be met now.
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  Um, Auburn is, is tougher to get development through.
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  They have just a onerous process that it's more of a timing issue than anything.
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  But we're doing several in Auburn right now and they've, we work good with
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  them, but it's just, it just takes more time, you guys and effort and,
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  and pushing and just staying on it.
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  That's right.
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  Takes a lot of time.
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  Speaking of that, tell us in your career, and I'm, I'm really curious, you're
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  gonna answer this the same mm-hmm.
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  With Bill and I would, what is your most challenging piece of land
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  that you worked on that ended up being an industrial development?
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  Yeah.
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  Industrial.
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  Yeah.
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  As an industrial project.
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  Uh, very interesting.
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  Uh, the most interesting projects I've done have not been industrial projects.
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  Sure.
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  Down racetrack was probably one of the most challenging that I worked on
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  for over five years to get it done.
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  But that's a good one.
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  Yeah, it's a good one.
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  It's not an industrial, but it's a unique project and a very
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  important one for the area here.
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  Absolutely.
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  Um, yeah, so we've done, there's a couple big ones that we're working on now.
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  One for Benaroya in the winlock area.
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  That's, mm-hmm.
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  Pretty challenging.
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  Yeah.
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  Lot of infrastructure requirements, roadway improvements, uh, fire power
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  issues, issues down there, fire tank storage, just, it didn't have
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  any infrastructure to serve it.
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  Okay.
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  It's been a challenging one.
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  It's still going on.
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  It's in, it's a phase development, you know, there's been some big ones in
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  years past, but because of the fact that we didn't have as much environmental
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  regulation, they weren't as tough to get through, but that's one of them.
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  That's more challenging.
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  God, there's been so many guys, I'm just, uh, Hey, on Sumner Golf course.
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  Little bit.
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  How about the Sumner Golf Course?
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  Oh yeah, the Sumner Golf course.
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  That would be our, for sure.
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  I thought of that one.
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  I just, I mean, after the city dealt with the core issues.
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  On the, you know, on the golf course.
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  And we came back in to develop that.
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  It was a less of a difficult site to actually finally get developed.
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  The big issues with that one was, you're next to the river,
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  you're, you're in a floodplain.
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  Um, and so there had to be a lot of analysis done to show how
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  you're providing mitigation for the floodplain fill, which has mostly been.
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  Accomplished on the city's portion of the site to the south.
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  But yeah, that one from the time we started that and then got put
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  on hold, it was a decade, um, of, you know, more of a decade of work.
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  Another two tough projects guys right now are the Bridge Milton site that
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  just pretty much is finishing up.
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  Yeah, very difficult site, old gravel pit, lots of grade,
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  lots of big retaining walls.
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  Like 80 feet or something on one of them, wasn't it?
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  Well, there's over a hundred feet of gray difference from one
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  end to the side to the other.
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  Um, and then you had the largest retention pond like ever done
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  industrial on that site, right?
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  Yeah.
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  That underground vault was a lot bigger than a football field.
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  And was a $16 million vault in itself.
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  Wow.
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  When that vault got started, I got people asking me, what's that new
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  building being developed out there?
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  And I said, well, that's a vault.
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  It looked like a, yeah, it looked like a building, not a building.
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  The other one, um, is the other bridge project on the BNSF site.
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  That's been a very difficult, complicated site.
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  Well, Justin's getting all the hard ones.
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  Oh God.
• 14:43
  Yeah.
• 14:43
  He's not scared, you know?
• 14:45
  Yeah, I know he isn't.
• 14:46
  Yeah, he takes 'em on.
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  Uh, lots of infrastructure on that one too.
• 14:50
  Yeah, yeah, yeah.
• 14:51
  I bet.
• 14:52
  Yeah.
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  That one took a long time.
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  And that had an environmentals to begin with as well.
• 14:56
  Right.
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  And it got appealed through cipa.
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  It was Okay.
• 14:59
  Very difficult site.
• 15:00
  We talked about challenging sites.
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  We've talked a lot about that.
• 15:02
  Yeah.
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  And they're not getting easier.
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  Are there any sites.
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  Developments that you've gone through that have stood out to you, that have just been
• 15:08
  super smooth and, and easy to get through that, that stand out or, um, look at his
• 15:13
  gray hair, none of those are even built.
• 15:15
  Do you only work on really challenging sites?
• 15:17
  Well, no, there had, you know, some years ago, I'd say a decade ago, there
• 15:22
  was some, you know, sites that are.
• 15:25
  The no-brainer ones that you know, you just happen to pick
• 15:27
  up are one of our developers.
• 15:29
  And pretty straightforward.
• 15:31
  There's been a couple sites in Dupont and Lakewood that you know, when you
• 15:35
  have good gravelly soils and good infiltration, that's the most economical
• 15:40
  way to solve your storm water problems.
• 15:42
  And so we've had a few sites down, and even Lacey, some
• 15:45
  of the smaller sites that.
• 15:47
  I've been flatter and more straightforward and you get the support of the cities
• 15:51
  back when they were, you know, those are some of the easier sites to deal with.
• 15:55
  There just isn't too many anymore that are easy because of the new regulations
• 16:00
  and, and site constraints, but doesn't mean they can't be developed and they are.
• 16:04
  It's just that the regulations and the constraints have changed over the years
• 16:09
  and it just makes it more difficult.
• 16:11
  Excellent.
• 16:12
  Well, this has been really great information.
• 16:14
  I'm sure our listeners are gonna love it.
• 16:16
  For sure.
• 16:16
  You know, you are the expert in this space, and so appreciate you taking
• 16:19
  the time to, to join us today and, and jumping on the podcast for the first time.
• 16:23
  It won't be the last.
• 16:25
  Okay.
• 16:26
  Yeah.
• 16:26
  Well, thanks guys.
• 16:27
  Appreciate it and appreciate your, uh, support also.
• 16:31
  Absolutely.
• 16:31
  Yeah.
• 16:31
  Wonderful.
• 16:32
  Thanks again, Dan.
• 16:33
  Appreciate it.
• 16:33
  Okay.
• 16:33
  Thanks so much.
• 16:34
  All right.
• 16:34
  All right.
• 16:34
  See you guys.