Are there suitable sites for a distribution center?

Note:

This example presents an approach to using ArcGIS to determine if there are any suitable sites for a grocery distribution center in a particular city. The information will help management decide where to locate the center. While the data is real, the scenario, analysis, and resulting decisions are hypothetical.

Taking a chance on expansion

An investment firm recently purchased a chain of neighborhood grocery stores that was on the brink of bankruptcy. As part of their midterm strategy for turning the chain around, they are planning to expand into new markets in the next few years. They have identified one particular potential metropolitan region as a good candidate and are starting to look for locations for a regional distribution center.

The investment company will be opening grocery stores in the more affluent western portion of the metropolitan region.

Requirements for the center

The center will require about 400,000 square feet and will provide at least sixty full-time jobs. Consequently, the firm is looking for sites that are a minimum of 20 acres to provide enough space for the buildings and parking, with room to expand. Rather than retrofitting an existing warehouse, the firm prefers to build a facility for grocery distribution from the ground up and is looking for vacant parcels to avoid demolition costs. The other requirements for the location of the center are that it is within a mile of a freeway or major highway, and not in a flood zone.

Finding suitable sites

The firm is considering several cities in the region for the location of the center: one on the relatively prosperous west side, near future stores and two cities on the east side, near the airport. Being near the airport would be advantageous for receiving fresh and frozen items and getting them to the distribution center quickly, although the firm hopes to use as much fresh, locally supplied food as possible.

The City Council for the city in the western part of the region has gotten word of the search for the distribution center and is eager to bring the jobs to the city. They have offered a 10-year, 50 percent tax rebate to the investment firm, along with a promise to upgrade access to the local highway if the firm chooses their city.

Before engaging in serious negotiations with the city, the firm wants to find out if there are any lots in the city that would be suitable for the distribution center. They assign an analyst in their real estate division to do a quick analysis and find out how many potential locations there are, out of more than 17,000 lots in the city. The analyst uses a series of attribute and spatial selections in ArcGIS to find sites that meet the criteria. Attribute selections find features based on a characteristic that describe each feature, for lots, the size, land use, and so on. Spatial selections find features based on what they're near, coincident with, or adjacent to, such as how far a lot is from a freeway.

After obtaining a layer of tax lots within the city from the regional Association of Governments' database, the analyst selects lots that are at least 20 acres in size and currently vacant (the City has assured the firm that the zoning of the lots is not an issue; if it is, it can always be changed).

There are six lots that are at least twenty acres in size and are vacant.

From these, she finds the ones that are within a mile of a freeway or highway.

Of the six lots, four are within a mile of a highway (shown in red).

Finally, she eliminates the lots that are inside the flood zone. As it happens, all four of the lots are outside the flood zone so they are acceptable sites.

All four of the lots are outside a flood zone (shown in light blue).

Widening the search

The analyst creates a story map for the firm’s officers, to illustrate the criteria used in the selection process and present the results of the analysis.

There are several sites to choose from, and the terms the City is offering are pretty favorable. However, to improve their bargaining position, the officers have the analyst look for potential sites in the two cities near the airport. She obtains layers of tax lots for those two cities and reruns the analysis. As it turns out, there are six potential sites in this area—three in each city.

After screening nearly 47,000 lots in the three cities in a matter of a few minutes, the analyst has identified ten potential sites.

The analysis identifies six suitable lots in the two cities on the east side.

The analyst then creates a chart comparing average value per acre for sites in the three cities. The average value for the city on the west side (City A) is much higher, reflecting the overall higher property values in that area.

With the analysis in hand, the firm's officers are in a much stronger negotiating position and able to make an economically sound decision.

The officers present the information to the City Council. They point out to the council members that while they would prefer to have their distribution center on the west side—near their stores—the two cities on the east side near the airport offer more potential sites at lower costs. From the maps and chart the council members quickly see how the city stacks up.

A few weeks later, the City comes back with an offer of a 75 percent tax rebate. The investment firm's officers tell the City they'll consider the offer while they finish their due diligence into locating the distribution center in each of the cities.

Workflow using ArcGIS Online

Identify lots that would be suitable for the distribution center

1. In ArcGIS Online, the Find Existing Locations tool allows you to combine the attribute and spatial selections in a single statement by adding a set of expressions, one at a time. The tax lots must meet all of the criteria to be considered potential sites.

   

2. First add the expression to find tax lots of at least twenty acres.

   

3. Next, the expression for tax lots that are vacant.

   

4. Then the expression for tax lots within a mile of a freeway or highway. Use the drop-down menu to specify within a distance of and the Freeway or Highway layer.

   

5. Finally, the expression for tax lots outside the flood zone. Use the drop-down menu to specify does not intersect and the Flood Zone layer.

   

The final statement includes all the criteria. Since all must be met for a tax lot to be considered a potential site, the expressions are linked by the And operator.

The same statement would be used to select the sites that are in City B and City C, using the layers containing the tax lots for those two cities.

Calculate average cost per acre for the lots in each city

1. To get the average value per acre for potential sites in one of the cities, display the table for the layer of potential sites in that city. Click the Value Per Acre field and select the Statistics option. The list of statistics displayed includes the average for the value per acre field.

   

Workflow using ArcGIS Desktop

Identify lots that would be suitable for the distribution center

1. Use Select By Attributes to select lots that are at least twenty acres in size and currently vacant.

   

2. Use Select By Location to select those lots that are within a mile of a freeway or highway. Set the selection method to select from the currently selected features, the spatial selection method to within a distance of, and set a search distance of 1 mile.

   

3. Use Select By Location to select the remaining lots that are outside the flood zone. Set the selection method to remove from the currently selected features and the spatial selection method to intersect. Be sure to uncheck Apply a search distance.

   

4. To save the sites as a separate layer, right-click the layer in the table of contents, choose Selection, and click Create Layer from Selected Features.
5. The same selection steps would be followed to select the sites that are in City B and City C, using the layers containing tax lots for those two cities.

Calculate average value per acre for the sites in each city

1. To get the average value per acre for potential sites in one of the cities, open the attribute table for the layer of potential sites in that city. Right-click the Value_Acre field and select the Statistics option. The list of statistics displayed includes the mean for the value per acre field.

   

Workflow using ArcGIS Pro

Identify lots that would be suitable for the distribution center

1. Use Select Layer By Attribute to select lots that are at least twenty acres in size and currently vacant.

   

2. Use Select Layer By Location to select those lots that are within a mile of a freeway or highway. Set the selection type to Select subset of current selection, the relationship to Within a distance, and set a search distance of 1 mile.

   

3. Use Select Layer By Location to select the remaining lots that are outside the flood zone. Set the selection type to Remove from the current selection and the relationship to Intersect. Be sure to remove the search distance.

   

4. To save the sites as a separate layer, use the Copy Features tool.
5. The same selection steps would be followed to select the sites that are in City B and City C, using the layers containing tax lots for those two cities.

Calculate average value per acre for the sites in each city

1. To get the average value per acre for potential sites in one of the cities, use the Add Field tool to create a Value_Acre field and the Calculate Field tool to calculate the field as !VALUE! / !ACRES!. Use the Summary Statistics tool to calculate the mean value per acre.