The new Caterpillar Logistics Services Inc. distribution plant going in on the West Plains could be a catalyst that influences other sizable national companies to follow suit and establish a presence here, people familiar with the transaction say.

Spokane County Commissioner Al French says he's aware of four other large national companies that are considering expanding into the county, although he can't disclose who they are. He says the fact that Spokane County will be home to the Caterpillar facility could make the West Plains look more attractive to other big-name companies.

"Landing the first one will lay the groundwork for others to come," French says.

Caterpillar announced late last month that it plans to construct a half-million-square-foot facility just east of the Interstate 90-Medical Lake interchange on part of a 72-acre parcel of land there.

The site - near the corner of Hallett and Thomas Mallen roads - on which the distribution center is to be built is owned by Hainsworth Family Limited Partnership, the Spokane County Assessor's website shows. The county lists the value of the parcel at just over $1 million.

Peoria, Ill.-based Caterpillar Inc., which owns the Morton, Ill.-based subsidiary Caterpillar Logistics, had adjusted revenue of about $42.6 billion for 2010 and is ranked 58th on Fortune magazine's 2011 top 500 companies list.

"To get a Fortune 100 company to come to Spokane is a big win for us," French says of Caterpillar's decision.

Bridget Young, a spokeswoman for the company, says a contractor hasn't been selected yet to build the distribution center, but construction is expected to begin later this summer. The project's general contractor will select its own subcontractors.

The center is scheduled to be completed next summer. It's expected to employ between 100 and 150 people.
Robin Toth, vice president of business development for Greater Spokane Incorporated who was involved in recruiting the heavy-equipment maker, says the facility is expected to cost between $30 million and $40 million to construct, including the cost of equipment to be installed there.

Toth says she believes the distribution center, once completed, will be a catalyst for future growth on the West Plains.
"As companies look more and more at our region, they'll realize the benefits of being here, based on Caterpillar's decision," she says.

The distribution center primarily will serve five of Caterpillar's dealerships in the Northwest and parts of Canada.
Those dealerships are Western States Equipment Co., serving Idaho, Eastern Washington, Oregon, western Montana, and parts of Wyoming; NC Machinery, serving Alaska and Western and Central Washington; Peterson Machinery Co., covering Oregon and Southeast Washington; Finning International Inc., of Alberta; and Kramer Ltd., of Saskatchewan.

The Spokane distribution center will be the third such facility the company will have established as part of a multiyear realignment of its parts distribution network in North America, Young says. The company opened a similar facility in Waco, Texas, in May 2009, and opened a 1 million-square-foot center just outside of Dayton, Ohio, in May, she says.

Caterpillar's strategic plan seeks to eliminate some of its smaller regional centers throughout the U.S. and to create larger distribution facilities, Young says.

Caterpillar hasn't disclosed any plans to open a fourth and similar facility elsewhere, she adds.

Caterpillar's current 125,000-square-foot Spokane Valley regional parts distribution outlet, at 6811 E. Mission, will be replaced by the new West Plains facility.

Young says the new Spokane distribution facility will handle parts that range in size from a few ounces to more than 40,000 pounds.

Components to be warehoused there will come from various Caterpillar manufacturing facilities all over the world.
The location near I-90 and Spokane International Airport were important factors in the company's decision.

Landing Caterpillar

Spokane initially competed against 20 other U.S. cities for the presence of the large distribution facility, French says, adding that Caterpillar's final decision was between the West Plains site and a site off of U.S. Highway 95 in Hayden.
Toth says the collaborative effort between various entities in the Spokane area was crucial in creating an attractive proposal for Caterpillar's site selector. Toth says such site selection processes typically take between 12 and 18 months to complete after a company expresses interest in locating to the Inland Northwest, but Caterpillar made its decision in about four months.

"We met with the site selector on March 21 and announced it on June 23," she says. "We would call that warp speed in economic development. The story here is that we were able to bring all the players together and they all were involved from as early as possible."

Those involved in that effort included representatives from Spokane County, the city of Spokane, Avista Utilities, Spokane International Airport, and Inland Power & Light Co., among others, she says.

Toth says that to help ensure that Caterpillar chose the West Plains site for its distribution center, several local governing bodies and utility providers met several times over the last four months to discuss the company's needs.
One change that was made to accommodate the plant was raising the county's maximum building height in areas zoned as light industrial to 60 feet from 40 feet.

The distribution center's roof clearance needs to be 48 feet tall to accommodate an automatic storage and retrieval system there, Young says. French says a tax-increment financing district established by the county in 2006 also played a role.
Such districts use a portion of property-tax revenue from a designated area to fund public infrastructure, such as roads and utilities. When the Caterpillar distribution center is constructed and the property's value increases, more taxes will be generated as a result.

Caterpillar hasn't begun recruiting employees yet to staff the planned facility, and Young says that process likely will begin early next year. Jobs will be posted at www.jointeamcaterpillar.com.