Tag: repurposing

Guest Post: Repurposing Military Bases

Prof. Howard Weiss developed the Excel OM and POM software that we provide free with our text.

In previous blogs for your Heizer/Render/Munson text, I have written about both failures and successes in repurposing facilities. The US has been successful in repurposing many of the more than 350 bases that the military has closed since 1988, saving over $500 million dollars due to these closures. But it is not a simple matter.

Safety Concerns While no two bases are alike, several are contaminated with toxic solvents, lead, radioactive materials, asbestos, and explosives residue. The US has spent over $1 billion dollars to address these issues and has been successful with remediation of the problems at some, but not all, of the installations. Remediating is not always a quick and easy process. For example, the groundwater at Lowry Air Force Base in Denver is not expected to be cleaned up until 2084. Another safety issue is that of unexploded ammunition.

Remediation It is challenging to remediate any facility. Environmental standards are stricter today, such as the use of asbestos in buildings, than when these bases were built. And there has been an increase over time in the number of local, state and the federal government environmental regulations. Some of the current laws apply specifically to base remediation while others refer to any organization. Another challenge is that remediation plans may need to be approved by several different government offices.

Uses There have been many different uses of closed installations. Several are still used for some military purpose such as training for the National Guard or veteran services. Other uses include office space, homes, apartments, schools, businesses, parks, golf courses, arts and fitness centers, movie sets, production studios, training centers, a university, an international airport, corporate headquarters and a prison. Military Shipyards are different from normal installations, so private companies have taken them over in Charleston and Philadelphia. Shipyards can also be used as a container port.

Leasing Companies do not need to wait for a base to close in order to repurpose a facility because they may be able to lease space. For example, a manufacturer leased space at Chanute Air Force Base in Illinois, in 1992, even though the base was not yet closed.

Classroom Discussion Questions:

  1. Has a military installation closed near you and how has it been repurposed?
  2. What good and bad effects does base closing have on the community?

Guest Post: Location– Facility Repurposing Failures

Prof. Howard Weiss is providing Guest Posts while I am travelling.

Figure 8.1 of your Heizer/Render/Munson textbook lists 6 factors affecting the decision about what site to select at a local level. Another factor at the site level is whether or not it is possible to take over an already existing site. In two previous blogs I have discussed successful repurposing of facilities in general and repurposing of closed Kmart buildings. Unfortunately, not all repurposing decisions turn out well. One case below shows the problems to the organization taking over the facility while the second demonstrates the problems to the township in which the facility is repurposed.

Philadelphia Parking Authority The Philadelphia Parking Authority (PPA) decided that it could repurpose a decaying 16-acre Exelon steam regeneration plant into an administration building and an impound lot. In 2019 PPA signed a lease for this property which had been vacant since it was closed in 1985. The owner agreed to improve both the 500,000 square foot administration building and the parking lots. In 2021 workers were moved into the building. There were sewage and bathroom problems and in a few weeks PPA pulled its workers out of the facility. The parking authority has ended its lease and is currently in the course of creating a new headquarters at another location in Philadelphia. The PPA will be reimbursed over $2,000,000 for the project but even with the reimbursement the estimated loss to PPA, not including wasted time, for this failed location is over $1,000,000. 

Lockheed Martin Site In 1995, Pennsylvania offered Lockheed Martin, a defense contractor, an incentive package of grants and loans worth $25 million to relocate employees to Newtown, Bucks County, PA. Your textbook notes, in the OM in Action box on “Iowa – Home of Corn and Facebook” in Chapter 8, that studies show that “incentives did not substantially contribute to economic performance”. Indeed, this was the case with Lockheed as it decided to close the facility by 2015. Closing cost the township roughly $560,000 in income tax from Lockheed’s 1,200 employees.

The drug company KVK Tech purchased the site for $12.5 million in 2015. Currently the site is barely used and the parking lots are nearly empty. In addition, local, state and federal officials have had difficulty with KVK using trailers instead of expanding, being in non-compliance on waste water and having flawed manufacturing processes.

 Classroom Discussion Questions: 

  1. Name a facility that generally is not repurposed. 
  2. What incentives does your city or county or state give to companies for locating in your area?

Guest Post: Kmart, Location Factors, and Repurposing Buildings

Howard Weiss is Professor of Operations Management Emeritus at Temple University. He is also the developer of our POM and ExcelOM software, provided free to adopters.

Since 2005, Kmart has closed all but 17 of its 2,085 stores. In Figure 8.1 in the Location chapter of your Heizer/Render/Munson textbook, location of markets is listed as a factor in deciding on a country in which to locate. For retailers, location of markets is also a major factor in site decisions. In fact, in 2012, Professor Yingru Li published a study stating that the selection of store locations partially explains why Wal-Mart, which currently has more than 5,300 stores in the U.S., has been more successful than Kmart.

Unfortunately, when Kmart was locating new stores it did not factor into its decisions that customers were moving further outside of cities and that it should locate stores beyond a city’s beltway.

In a previous blog here I discussed the repurposing of facilities. U-Haul self-storage seems to be the biggest beneficiary of the closings as it has opened storage facilities in over 20 former Kmarts. Some other uses and their locations are:

Churches, Charlotte, NC; Plainview, TX; Holland, MI

Drug Company, Desert Hot Springs, CA

COVID-19 vaccine clinic, Cudahy, WI

Storage Facility (Not U-Haul), Fremont, OH; Roanoke, Va, Danville, NC; Reno, NV;

Cannibis Location, Antioch, CA

Factory, Auburn Hills, MI

Retail Store – Big Box/Department, Clive, IA; Exeter Township, PA

School, Brevard County, FL; Waukegan, IL

Library, Lebanon, MO

Farmers Market, Herndon, WA

Classroom discussion questions:

  1. What other venues might relocate to a closed Kmart?
  2. Why have so many of the Kmart stores been converted to storage facilities?

Guest Post: Repurposing Facilities as a Location Issue

 Howard Weiss is Professor of Operations Management Emeritus at Temple University. He is also the developer of our POM and ExcelOM software, provided free to adopters.

The location chapter (Ch. 8 in your Heizer/Render/Munson text) offers the following on why companies choose a location. “Companies make location decisions relatively infrequently, usually because demand has outgrown the current plant’s capacity or because of changes in labor productivity, exchange rates, costs, or local attitudes. Companies may also relocate their manufacturing or service facilities because of shifts in demographics and customer demand.”

However, sometimes rather than a company actively looking for a location, it chooses a location because the location has looked for an organization. This is particularly true of repurposed malls and automobile plants. Store closings in malls have been on the rise for some time now mainly due to e-commerce. But COVID-19 has accelerated the closing of stores, and vacancy levels in malls will likely never return to the vacancy levels pre-covid. Mall developers say they’re scouting for businesses other than retailers to replace shuttered stores, anything from schools to doctors’ offices and short and long-term storage facilities both for residential and commercial customers.

Repurposing malls has been underway prior to COVID-19. In a 2018 report, Livability.com gives several examples of malls that have been repurposed as a skating rink, a satellite college campus, libraries, a light rail station, offices, residences, a startup tech company, a theater and art museums. And it is not just malls that were being repurposed prior to COVID-19. One report indicated that 128 of 267 closed automobile plants have been repurposed as follows:

 

 

Classroom discussion questions:

  1. What store, mall or other facility has been repurposed near where your students reside?
  2. What industries, aside from automobile manufacturing, will have facilities that will need to be repurposed after COVID-19.