Community Pushback Imperils Pennsylvania Industrial Projects

Pennsylvania has historically been a pillar of the nation’s industrial sector, but those uses aren’t always welcome in the commonwealth these days.

Pushback from community members has become a major sticking point for industrial projects in the Keystone State and the mid-Atlantic at large, developers said last week at Bisnow’s Philadelphia Industrial, Manufacturing and Logistics Summit, held at Velocity Venture Partners’ Pennsauken Logistics Center.

Commercial real estate players are struggling to navigate hundreds of legislative bodies that govern land use decisions in 2,500-plus municipalities across Pennsylvania. Those officials can face intense pressure from their constituents, who are often deeply opposed to the idea of living near a new industrial facility.

“We’ve been in a few situations where we were denied by-right plans,” Trammell Crow Co. Vice President John Pollock said. “I’m biased, but it’s not right.”

Pennsylvania’s $112B manufacturing sector is the nation’s sixth largest by employment, with more than 693,000 skilled workers, according to the state’s Department of Community and Economic Development. Greater Philadelphia had 412M SF of industrial real estate as of last quarter, according to Savills, up nearly 20M SF year-over-year. 

Part of the planning process for some industrial developers like Logistics Property Co. is now identifying which communities are more amenable to the sector, Senior Vice President Mark Glagola said.

“We avoid markets because of municipal fears,” he said. “There’s no doubt about it.”  

Trammell Crow will still pursue strong sites in unfriendly municipalities, but Pollock said the company seeks more flexible contract terms in those instances.

Sansone Group also doesn’t back down from those opportunities, but only if it can get a discount, National Director Rick Kingery said.

“I think it causes them to get lower transfer taxes and lower property values,” he said of the decreased potential financial upshot for municipalities.

Glagola said the industry needs to do more education and public relations work across the mid-Atlantic to avoid such intense public opposition.

“We don’t sell ourselves enough,” he said. “Everyone thinks tractor trailers are going to run them over.”

Some companies have found success with community outreach early on in the development process. That includes Velocity, which used public meetings to avoid pushback against its expansion of a manufacturing facility in a quiet South Jersey subdivision.

Glagola has persuaded some angry residents by pointing out that the smartphones and e-commerce deliveries they depend on are ultimately supported by industrial facilities, which have to exist somewhere.

But not everyone has found community meetings to be useful.

“I wish I could say those types of meetings have been helpful for us,” Pollock said.

Instead, he has seen them become a gathering place where residents can organize to pursue an anti-development agenda.

Kingery said broad macroeconomic trends have contributed to this kind of community pushback. The nation is at nearly full employment, which means the jobs an industrial facility could bring are less enticing, he said.

“The motivations sometimes aren’t there,” Kingery said. “Will it take a little bit of an employment recession to get there?”

Simple solutions for resident pushback are hard to come by, but the extended entitlement timelines wrought by Pennsylvania’s patchwork of municipal land use regulators may not be such an intractable issue.

Kingery said those decisions should be happening on the county level instead.

Industrial developers need more certainty across Pennsylvania, even if that shift could make projects more challenging for developers in some cases, Pollock said.

“It would help us do our jobs better and deliver a better product,” he said.