Greenfield or Brownfield? Here’s What You Need to Know.

Your company’s definition of success changes over time: greater brand recognition and market share one year; higher profits and an expanded global reach the next. No matter your measure, growth is the desired result, and with growth comes the need to build more facilities.?

The need for physical space presents a challenge for your industrial business. Do you expand into a new region or deepen your roots? Build smaller on a budget or go big with a facility that includes space for future growth??

Your first decision is a big one: do you pursue a greenfield or a brownfield location? A greenfield site is one that has never been developed, offering buyers a clean slate. A brownfield site, by contrast, has been previously developed and may include usable structures or utilities. So what’s it going to be??

Fortunately, this month’s issue of Bytes & Insights is dedicated to helping you carefully weigh your options and determine which works better for your next project.?

A Site to Behold?

Finisque ab origine pendet—the end hangs from the beginning.?

What’s true for any worthwhile task is most assuredly true for building an industrial facility: the way you begin your project is a good indicator for how you’ll finish it. Commence with a fully informed decision and you set a precedent for strong vision and risk avoidance. Take an impulsive first step and even small obstacles become stumbling blocks. In construction, site selection is the beginning that shapes the entire project.?

Understandably, choosing the site of what will become your company’s newest facility is one of the most exciting parts of your project. Standing in a breezy open field or in the reverberation of a vast empty building, you can envision the transformation and feel the potential for success and significance that it offers.?

Start by defining your ideal site; create a mental image. What does it look like before, during, and after the project? What are its biggest strengths? How does it grant your business an advantage in terms of schedule, cost, supply chain management, long-term growth, or even branding? Paint as vivid a picture as you can and you’ll be well on the way to choosing between greenfield or brownfield.?

Greenfield?

A greenfield site is a designer’s playground. In most cases, facility size and configuration aren’t constricted by space limitations or existing facility dimensions. This initial flexibility carries over into the project’s execution, as contractors can adapt more easily to shifting needs stemming from construction challenges or new orders from the owner.?

Advantages?

• More freedom in site development and facility design?

• Extra space for additional facilities or expansions?

• Less site preparation and faster mobilization?

Brownfield?

With its traditional imagery—empty pastures, towering steel, and a sprawling footprint—greenfield construction tends to evoke more excitement than brownfield. Even so, revitalization is exhilarating in its own sense, and brownfield projects promise renewal and restoration in spades. Typically located in urban, developed areas, brownfield projects often provide usable infrastructure and utilities, offer easier access to a larger labor pool, and have fewer negative environmental impacts.?

Advantages?

• Lower costs for site purchase and building materials?

• Available infrastructure and proximity to community resources?

• Opportunities for redevelopment incentives and support?

Choosing between a greenfield or brownfield site is a strategic mix of finance, marketing, and logistics. Identifying which advantages matter most to your business will help inform your decision.???

Byte: Greenfield sites typically come with greater speed and flexibility, with fewer strings attached. Yet under the right conditions, brownfield sites can be cheaper, more sustainable, and enjoy closer proximity to urban centers.?

Learn more in Part 1 of our “Greenfield Vs. Brownfield” series on gray.com.

Risky Business?

Understanding risk is critical to turning a major investment in a new facility into an effective functional asset. Owners and contractors must work together to identify and eliminate or minimize potential problems.?

Risk doesn’t only concern physical safety; it covers anything which threatens to impede or upend your company’s investment. A complicated permitting process for a brownfield site could pose a risk to the project schedule or budget if paperwork isn’t promptly filed or officials require more remediation than expected. Likewise, a greenfield site that’s too remote could risk the operability of the finished facility if your business can’t attract an adequate workforce or utility providers can’t deliver sufficient services to meet your daily needs.?

The risk of poor timing can also threaten your project. Move to expand too slowly in a hot market and your competitors could pass you by and seize an advantage that’s difficult to erase. Grow too quickly and you risk scaling an unsustainable model or compromising quality for the sake of speed. Establishing large industrial operations can occasionally involve timelines under a year, but most projects will take longer. If a greenfield site better equips your company to begin new operations on your optimal schedule than a brownfield does (or vice versa), it merits serious consideration.?

While the potential for problems is inherent to any project, greenfield and brownfield sites tend to carry contrasting risks.?

Greenfield?

Greenfield sites offer flexibility at a price. Without the benefit of existing structures or utility service, these projects start with nothing and often require a higher initial investment than brownfield projects. In contrast with a previously developed site, greenfield projects will likely not include geotechnical studies or environmental assessments; buyers must coordinate this official documentation before building permits will be issued.?

Challenges?

• Insufficient infrastructure and utilities for industrial operations?

• Difficulty attracting and retaining talent in a remote location?

• Risk of regulatory delays due to larger environmental impact?

Brownfield?

Companies that select a brownfield site should be well-informed of the conditions of their chosen site and the procedural realities of executing the project. These conditions are not always apparent at first sight and may require expert analysis to reveal the true extent of any problems. A thorough remediation can be costly and involve lengthy permitting processes and sign-off from a myriad of agencies. The higher likelihood of remediation does present a silver lining, however: properties that are contaminated or dilapidated are a liability for a community. As such, governments are often willing to defray the cost of some required improvements to the site in the hopes of enticing a business to redevelop the area.?

Challenges?

• Higher chance of required hazard mitigation?

• Space limitations that inhibit creative design or phased growth?

• Aging infrastructure and buildings?

See what our experts had to say in Part II of our “Greenfield Vs. Brownfield” series.?

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Help Is at Hand?

With so many details, procedures, and requirements to consider, site development can quickly become overwhelming, even after you’ve identified your preferred location. Partnering early with an experienced firm can make a big difference in the ease of your experience and the quality of your decision. Most companies looking to build a new facility lack the internal resources to assess a site’s viability or identify which authorities having jurisdiction (AHJ) to engage. Unforeseen soil remediation, rehabilitation of infrastructure, or design and construction for onsite electrical substations or wastewater treatment plants can carry high costs that undermine the project’s ROI. For a firm offering engineering, architecture, and construction (EAC) or similar services, however, such an assessment is a routine affair.?

“Companies have a tendency to overlook total cost of ownership considerations,” says Brian Fain, senior vice president, Gray AE. These aspects extend beyond the costs of acquiring the property and executing the facility’s construction. Ongoing operational costs such as utilities, maintenance, and labor should be determined and all ROI metrics assigned clear goals before the project proceeds to the construction phase.?

Project stakeholders need to know what happens after the ribbon is cut. How long will the facility be able to meet demand according to market forecasting? How will the current project facilitate the next phase of the company’s growth strategy???

Effective site consultation involves gaining a tremendous amount of insight into the location—current and future state—long before it becomes home to an industrial facility. Feasibility studies, site data analysis, and other due diligence require extensive coordination and review. These services include:

• Reviewing project design requirements and preliminary budget?
• Determining project risks and working to establish best-value solutions?

• Evaluating the efficacy of existing building and MEP systems?

• Analyzing public information such as applicable ordinances and environmental assessments?

• Conducting site-specific mapping, surveys, and studies?

• Evaluating cost, schedule, risk, and other factors to rate options and select a final site?

• Identifying long-term growth goals to inform future expansion or renovation?

• Evaluating surrounding infrastructure, utility needs, and legal requirements?

• Coordinating with customer to develop purchase agreement and obtain title opinion?

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Byte: Choosing a site for your next operation demands more than an eye test. Firms specializing in site consultation services go beyond surface-level details such as size and cost, providing you the peace of mind that every angle has been carefully considered. Leverage their experience to clarify vital decisions and safeguard your investment.?

Discover how Gray’s Planning and Development services set our customers on the path to success.??

While greenfield and brownfield sites each offer general advantages and potential drawbacks, every site is unique, just as every project is unique. Decisions must be made on a case-by-case basis—not only to fairly evaluate site conditions, but equally to consider the needs and values of the expanding business. How does your growth strategy impact the project timeline? Is there a need to locate near an important partner? Where does sustainability come into play??

All these factors and more will determine which is more viable. Site consultation services from an experienced firm such as Gray can guide you from feasibility studies to final due diligence, setting your business on a promising path to a bright new facility before you ever break ground.?