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Greenfield vs. Brownfield: What’s Better for Your Manufacturing Facility?

For manufacturing companies looking for a new location, greenfield versus brownfield is a major decision. Should you opt for a clean slate and build a facility on a greenfield site that’s further from the utilities and amenities of town? Or should you prioritize proximity to infrastructure and community with a brownfield site that may carry the risk of costly environmental remediation or a protracted permitting struggle? The right answer depends on your unique business needs.

For instance, how will the new site reflect on your company’s image or brand? There is plenty of opportunity to develop social goodwill and brand recognition when a company transforms a highly visible but rundown property into one of the most attractive facilities in the community. Greenfield facilities, however, are typically located outside the city center and can miss some of the brand-building efforts associated with project development in the public eye,but is visiblity worth the risks that can come with a brownfield site? Your business’s marketing strategy may be just as impactful on your site selection process as financial strategy.

 

Understanding the benefits, drawbacks, and cost differences between greenfield and brownfield sites is vital information for making informed decisions about selecting a site for development. This is especially important when considering scale, room for expansion, power needs, and data resilience. For example, advanced manufacturing operations and data centers consume large amounts of electricity, which can challenge traditional power and IT infrastructures; sometimes brownfield facilities cannot be retrofitted to handle current and future energy/data demands.

 

Greenfield Sites

 

Greenfield sites are undeveloped areas, typically outside a city on agricultural land. They are often in high demand for constructing manufacturing plants and other commercial projects because they considered by developers to be more shovel-ready.

 

Advantages of greenfield sites include:

 

  • Greater design flexibility for meeting project requirements
  • More room to expand for future growth
  • Higher flexibility tolease or own
  • Faster construction timelines
  • Better suited for advanced technologies

 

Challenges include:

 

  • Lower chance of sufficient infrastructure
  • Further away from the city and its services
  • Longer commutes for workers
  • Higher risk of contributing to urban sprawl and a negative environmental impact
American Foods Group's new beef processing facility relies on the advantages of greenfield construction

Brownfield Sites

 

Brownfield sites are abandoned, underutilized, or contaminated properties that may have buildings on site. Redeveloping these properties into productive projects mitigates environmental impacts, provides tax revenues, and improves the social foundation of surrounding communities. However, brownfield projects can be costlier, may take longer to develop than greenfield sites, and can present more hidden risks.

 

Advantages of brownfields include:

 

  • More direct revitalization of an area
  • Greater government incentives to help pay for redevelopment
  • Higher possibility of usable existing infrastructure
  • Minimal urban sprawl and destruction of greenspace
  • Improved brand image through community ties and environmental stewardship

 

Challenges include:

 

  • Greater chance of development complications such as discovery of toxic contaminants
  • Longer construction timelines
  • Older structures that may not meet structural requirements and building codes
  • Higher risk of cost overruns due to unexpected developments and facility modernization
  • Less available space for future expansion

 

Brownfield versus Greenfield

 

Perhaps the biggest advantages for selecting a greenfield site are the ease of construction and ability to employ the latest technologies and best construction practices. Greenfield sites are generally a better option when the following factors are desired:

 

  • Zoning changes
  • Build-to-suit with room for future expansion
  • Easy highway access for shipping and deliveries
  • No environmental remediation that could slow down construction
  • Minimal site preparation
  • Faster speed to market

 

 

The ability to refit/upgrade an existing facility, such as a warehouse or office building, that fits a company’s needs is probably the biggest attraction for companies to select a brownfield site and can reduce a project’s overall costs. Brownfield sites are generally a better option when the following factors are desired:

 

  • Government funding for off-setting redevelopment costs
  • Prior completion of environmental remediation
  • Proximity to urban centers and consumer markets
  • Access to larger labor market
  • Lower purchase price for site
  • The use of existing infrastructure to reduce overall costs
Businesses looking to expand their operations must weigh their options: is it better to build a greenfield or brownfield facility?

Selecting a Site

 

Deciding on greenfield sites versus brownfield sites comes down to risk tolerance and what best fits a manufacturing company’s needs.

 

Brownfield sites are often viewed as higher risk (and therefore higher cost) because of their histories. However, cities and states often pay for the due diligence (and the improvements) required to make these properties “certified” or “shovel ready.” This includes the completion of planning, zoning, surveys, title work, environmental studies, soils analysis, and public infrastructure engineering—even before the site is available for purchase. This process removes much of the risk of building on brownfields and can make them more competitive with greenfield sites—especially if a company feels strongly about having a visible presence in an established area.

 

If you have questions regarding the selection of a greenfield or a brownfield site for your next manufacturing facility, please contact us and one of our expert project managers will help guide you to the decision that’s best for your business.

    Some opinions expressed in this article may be those of a contributing author and not necessarily Gray.

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