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Five Keys to Real Estate Success Along the Ohio River Corridor

   June 2018 / Vol 8 Issue 4

Five Keys to Real Estate Success Along the Ohio River Corridor
By: Bryce Custer, SIOR, CCIM, MRICS, President, Ohio River
Corridor, LLC

 

Spring and early summer are the season of conferences and expositions. Optimism is high that 2018 will continue to see growth in midstream and downstream sectors. Pipelines continue to come on-line and additional are planned to move product to consumers. Companies that will profit due to proximity to dry gas and NGL’s continue to locate and expand in the Utica / Marcellus Shale region.

Shell Chemicals in Monaca, PA have dubbed the new business: “Shell Polymers” stating that the operational philosophy will change the way business in polyethylene is currently conducted./p>

What does this have to do with real estate? How will being located along the Ohio River Corridor significantly impact your business?

Let’s look at five critical success factors to convince the nation and the world that the Ohio River Corridor, and surrounding counties in Ohio, West Virginia and Pennsylvania are the ideal locations to produce and consume the product of Utica and Marcellus drilling.

1. Location, Location, Location

Since the first sale of real estate, the key has been location. What were the driving factors hundreds of years ago? Infrastructure. What are the driving factors today? Infrastructure. Early settlers located close to water for transportation, to move goods. Today, we see barges hauling product and equipment efficiently to and from the Ohio Corridor to the Gulf Coast.

From the fur trade to steel mills, the Ohio River has and will continue to play a key role driving industry along its shores. Effectively moving product along the Ohio River system and along State Routes and Interstates will determine the success of keeping supply chain costs down.

2. Infrastructure

Because of hundreds of years of development along the Ohio River, we have a strong infrastructure for transportation of goods.

Barge: One of the areas greatest assets is the Ohio River system which allows shipment of goods and equipment throughout the Midwest down to the gulf Coast. The locks and dams are in place (albeit need funds for maintenance and expansion). Barging can prove to be an efficient and “Green” way to move product. A common 15-barge tow has the same capacity of 1,050 trucks and 216 rail cars pulled by six locomotives. Looking at this as “ton-miles per gallon”; barge can move a ton of cargo 576 miles with a single gallon of fuel. Trains are at 413 and trucks are 155 “ton-miles per gallon”.

Rail: The Ohio River Corridor has considerable rail along the river. Class 1 include: Norfolk Southern and CSX Transportation. Other regional and shortline railways in the area include, but are not limited to Wheeling & Lake Erie (Toledo through Ohio and Pennsylvania) and Ohi-Rail (Minerva to Hopedale, OH) State Routes and Interstates: The Ohio River Corridor has significant four lane state routes and interstates for the movement of goods throughout the country.

North and south on Interstate 77 and 79, east and west on Interstate 70 and 80. Various state routes serve the area between the Ohio River and over 70 percent of petrochemical users within a 500-mile radius.

3. Product Storage

By the time this is published, the second Appalachian Ethane Storage Hub Conference will have taken place. Geologists have identified key areas along the Ohio River Corridor for the underground storage of Ethane. The most practical and safest way to store ethane is in underground salt caverns. Along the Ohio River, key areas have been identified that would be geologically acceptable to store ethane. These areas are from the northern most point in Pennsylvania south to the Marietta OH, Parkersburg WV and west towards Charleston WV and the Kanawha Valley.

Currently, Mountaineer NGL Storage north of Dilles Bottom, Ohio (site of the proposed PTTGC petrochemical complex) is lining up contracts and going through the permitting process to store product.

The Appalachian Storage Hub, a proposed storage facility across western Pennsylvania, eastern Ohio and western West Virginia will be a key project for the additional development of petrochemical facilities along the Ohio River Corridor.

4. Land

Every conference I attend I hear the same old mantra: We don’t have “enough” land along the river to attract a company to build. My response: “We will find it!”.  Of course, we can’t create land, but we can be creative in the utilization of the land that we have. A full petrochemical complex will require 500 – 1,000+ acres. Other companies may need 5-100 acres on the river for their operation. Many just need to be near rail. As I drive up and down the river in Ohio (SR7) and West Virginia (SR2), communities would welcome any industry to create jobs for their residents. What are the strengths of the vacant property? Is the property brownfield or greenfield? Is there rail? Easy access to highway? Enough land for a few barge cells?  We have land with rail and barge ready for development in West Virginia and Ohio. We currently have properties from 30-1,300 acres listed as available. We also have properties not publicly marketed for development. Our specialty is site selection and finding the appropriate location for your business.

5. People/Employees

Of course, none of the above matter unless there is a ready and able workforce. This area is fortunate to have a history of hard working people ready to tackle any challenge. The area has many technical schools prepared to teach the skills required for success in the Oil & Gas, petrochemical and plastics industries. The next issue will provide an in depth look at demographic and employment numbers along the Ohio River Corridor in both Ohio and West Virginia.

Without a doubt, the place for success is the Ohio River Corridor. Shale Crescent recently created considerable press with their business analysis of reducing costs by locating to the Ohio River area. If you have not read this, take a minute to look this up.

This is a generational opportunity for the area. Success is at our finger tips. Our communities may not have all the necessary keys for success but may have one or two. We need to focus on our strengths, not our weaknesses. When we have inquiries about our area, inquires about land, our answer should not be “No, we can’t…”; it should be “Of course we can”, let’s work together to figure this out how to make our communities successful. Let’s work together to ensure that anyone who wants to work can find a good living wage job.

For more information contact Bryce Custer at Bryce@OhioRiverCorridor.com

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