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ARLINGTON, TX-The Great Southwest Industrial District has won rights to a Triple Freeport exemption, ending years of hard negotiations for the chance to reclaim its heavyweight title as a distribution gateway.

Arlington Independent School District, on a 7-0 vote, has cleared a Freeport exemption for its side of the 77.5-million-sf industrial district, joining with the city and county and delivering the coveted third jewel. To win the nod, 105 businesses put up nearly $7.3 million or the equivalent of 1.9 times the amount of their 2003 inventory taxes in checks ranging from $216 to $819,000, Craig J. Richard, senior vice president of the Arlington Chamber of Commerce’s Economic Development, tells GlobeSt.com. The school district’s exemption is retroactive to Jan. 1, 2003.

“Companies committed to the community didn’t have any problem in doing it,” Richard says, noting hold-outs came from businesses without a long-term stake in the Great Southwest. “Fortunately, we had enough companies that really felt it was important for them to participate. We’ve been working on this a long time. It’s good to be able to check it off.”

A Triple Freeport exemption is as much a part of Texas distribution folklore as its “middle of the US” marketing strategy, which plays to the pocketbooks of companies looking to keep a rein on shipment costs. The exemption translates into 175 tax-free days for inventory awaiting shipment to other parts of the nation.

“This is a turning point for the GSW market, which has been lagging the DFW area in occupancy for the last 10 years,” says Kevin J. Santaularia, president and CEO of Dallas-based Bradford Cos., a key holder of 4.5 million sf in the district. “The Great Southwest is now on a level playing field with the balance of the industrial markets in the metroplex.”

The Triple Freeport nod comes too late to save yet another large tenant loss in the Great Southwest, where the industrial vacancy is 16% and rising. In recent weeks, Bradford was served a termination letter that H.J. Heinz Co. will move Feb. 1 from 157,000 sf at 833 S. Great Southwest Parkway where it’s been a tenant for two decades to 162,000 sf at Crow Holdings’ Turnpike Distribution Center about 10 miles to the east and close-in to Dallas.

Santaularia says he’s holding three blocks of 500,000 sf that went dark as companies relocated to Triple Freeport areas within the metroplex. With Arlington now part of the game, only Garland, Hurst-Euless-Bedford and Carrollton-Farmers Branch are without the must-have deal-maker. But that too could be changing soon.

Santaularia says the newly acquired “triple crown” could likely spark a space race since deal-makers will be looking to the Great Southwest for cost-saving opportunities due to a vacancy at least 6% higher than elsewhere and considerably softer rents. The district, laced with blocks of aging product, has withstood two to three large move-outs year after year. Thus, rents run a wide gamut, with bulk space ranging from $2 per sf to $3 per sf for the most part.

David Dunn, president of Dunn Commercial in Arlington, pegs vacancy closer to 20%, with many small buildings standing dark and more ticketed for lockdown. “It’s the highest I’ve ever seen it,” says the GSW veteran and founder of the Great Southwest Association. “We desperately needed it (Triple Freeport) and I think they knew that. We’ve missed a lot of deals because we didn’t have it.

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