Lancaster, Texas, takes another economic blow

The Allen Group, the company that was going to develop a 6,000-acre set of warehousing facilities, to build on the two main rail lines and three interstates in the area, has just filed Chapter 11.

This was a case of overbuild anyway.

You have that ProLogis place already fairly built, plus the one on Hampton Road just north of DeSoto. And another one in development on the DeSoto side of I-35/Danieldale. AND, Alliance in Fort Worth, the already-existing warehousing and transportation hub, is only 40 percent built out.

Even without any of the John Wiley Price hassles The Allen Group had, it was a gamble.

Beyond that, I said that if oil stayed at $150/bbl, we wouldn't be importing so much stuff from China anyway.

And, beyond THAT, in an irony, or worse, Richard Allen says that a major potential future investor is ... China Supply and Logistics. Hell, what next — a Chinese company buying a share in Berkshire Hathaway, now that Buffett has purchased BNSF?

Further fallout? Between this and the general economy, Lancaster's airport expansion just got pushed back years.

The real reason Royce West won’t run for statewide office

The south Dallas-based Texas state senator is too busy helping John Wiley Price shake down would be new businesses. In this case, it’s been The Allen Group, would-be developers of the Dallas Logistics Hub.

I had suspected Royce had a finger in the pie on Dallas Mayor Tom Leppert’s plan to delay The Allen Group’s work through forcing an 18-month master plan into place. At the time I first blogged about that, I didn’t know if Royce was looking for Perot money related to his boosterism of UNT-Dallas, or was engaged in JWP-type antics.

Well, now we know.

Congresswoman Eddie Bernice Johnson gave a wrist slap to the two, but, as Jim Schuetze puts it, Allen Group CEO Richard Allen had to sign off on a Kafkaesque “confession” of being a bad boy for questioning Royce and JWP’s good intentions.

Psst, Richard Allen. Ask EBJ if she needs a Hudson’s Books warehouse at the Logistics Hub.

Is the Allen Group reading this in Lancaster?

I said this already 2-3 years ago, and despite a scoffing idiot or two in the Dallas suburb, soaring oil prices, likely driven by Peak Oil, are crimping the globalization of trade. That, in turn, has to affect the viability, nay, even the necessity of mega-distribution/warehousing centers, like one proposed for a 10-square-mile chunk of land in Lancaster, Dallas, Wilmer and Hutchins.

“If we think about the Wal-Mart model, it is incredibly fuel-intensive at every stage, and at every one of those stages we are now seeing an inflation of the costs for boats, trucks, cars,” said Naomi Klein, the author of “The Shock Doctrine: The Rise of Disaster Capitalism.”

“That is necessarily leading to a rethinking of this emissions-intensive model, whether the increased interest in growing foods locally, producing locally or shopping locally, and I think that’s great.”

This is already starting to play out. Some American countries that had factories in Mexico, but moved to China after the WTO agreements, are bringing work back to Mexico. It’s still not in the U.S., but it’s easier to ship point-to-point when you’re already on the same landmass, rather than constricted to just a few ports.

That, then, lessens the need for such warehouses as the Allen Group.

And, because this is shipping by land, there’s no business for an “inland port” designation, to boot.

Why the move back to Mexico, in numbers? The Times story notes that the cost of shipping a 40-foot container from Shanghai to the United States has risen to $8,000, compared with $3,000 early in the decade. In response, container ships have cut their top speed by nearly 20 percent to save on fuel costs. That, of course, adds significantly to shipping times, which may be of importance in some industries.

Canadian investment bank CIBC World Markets says it’s like a 9 percent surcharge or tariff.

Plus, if a “Kyoto II” greenhouse gas treaty includes India and China (and, in essence, stops U.S. companies from exporting pollution), manufacturing costs there will rise even more.

Winners/losers? American wood is staying home for furniture production. U.S. steel production is up.

Winners and losers could include globalization of food. No more cheap Chilean grapes and cherries in winter here, for example.

And, the U.S. might be an overall loser. Too many industries have shuttered too long here; starting them back up in Mexico, even, after more than a decade in many cases, would be difficult.

Inland port takes a back seat

Dallas is not going to push the Texas Legislature this session for inland port status for the southern sector of the city and southside suburbs like Lancaster. Given that the Lege is on a two-year cycle, and nothing’s likely to be done without a Dallas push, that means waiting two years.

How will this affect The Allen Group? I would think they would be staring earthwork at least by two years from now.

Plus, the February issue of Dallas CEO notes that inland ports that cross government boundaries usually abound in headaches. People it quotes say this will be different.

And, here you have this wonderful quote from the mag article:

The City of Dallas is so certain this inland port concept, it’s already calculating its portion of the benefits.

Oops… didn’t it just put those calculations on ice for two years?

Beyond that, I still say, first of all, that intermodal transportation is being built with no consideration to how a near-term arrival of Peak Oil will affect trade with China. Second, as i have blogged before, the question of how much capacity is too much has not been touched with a 10-foot pole. I'm not being a naysayer, just cautious.

Finally, and here’s the biggie:

What’s to stop this inland port craze to be some sort of race-to-the-bottom EDC-type adventure? Why shouldn’t St. Louis try to become an inland port? Or Kansas City, where BNSF, incorporating the old Santa Fe Railroad, has a hub? Or Denver? Or U-Pac hub Omaha?

And who renamed the airport “Lancaster Executive Airport” for the magazine article? Puhleeze.

Allen Group: $3,500 for politics, not a dime for Ronnie Lowe

Allen Development of Texas, the local arm of intermodal hub developer The Allen Group, contributed $3,500 to support the November Lancaster school bond election.

But, no money for Ronnie Lowe and the Lancaster Outreach Center, despite multiple requests.

Steve Topletz had the money for $500 for the bond, but no money for the LOC, nor any money for a discount price for the new Boardwalk school site.