Industrial Areas: Overview, Significance, Special Considerations

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Updated July 12, 2022

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What Is an Industrial Park?

An industrial park is a portion of a city that is zoned for industrial use rather than residential or commercial needs. Industrial parks may contain oil refineries, ports, warehouses, distribution centers, and factories. Some industrial parks offer tax incentives for businesses to locate there, such as tax increment financing.

Key Takeaways

An industrial park is a section of the city that has been designated, planned, and zoned for industrial development.
An industrial park is a variation on a business park or office park, which might have offices and lighter industry.
An industrial park might include companies that provide manufacturing, transportation, and storage facilities, such as chemical plants, airports, and beverage manufacturers.
Industrial parks can be useful in bringing companies together that provide services and features that are complementary to each other.
On the downside, industrial parks often create environmental worries, due to increased pollution and the potential for the grounds and surrounding area to be damaged by contaminants.

How an Industrial Park Works

Industrial parks can combine a mix of production, transportation, and storage facilities in the same area. This can include chemical plants, plastics manufacturers, airports, food and beverage processors, and steel manufacturers.

For example, the Wilmington Industrial Park in Los Angeles is located near a major international shipping hub, the Los Angeles and Long Beach ports, as well as a railroad and numerous freeways with access to major trucking routes. Types of businesses located there include a cold-storage facility, food distribution warehouses, and engine parts companies.

Why Industrial Parks Are Important to Commerce

Industrial parks can be structured to bring together complementary services and features that will benefit the companies that occupy space there. Ports provide access for commodities and finished products to be brought to major industrial hubs for distribution. Cranes and other heavy lifting equipment available at the industrial park are used to transfer the cargo to trucks and railroad cars. The cargo can also be stored at warehouses located within the industrial park. Manufacturers based in an industrial park that has port access can quickly procure the materials they need to create their products.

Special Considerations

The concentration of heavy industry in industrial parks can raise environmental concerns. Pollution can be magnified by the close proximity of manufacturing facilities, machinery, and heavy transportation. The grounds where these facilities operate can build up with contaminants that make the surrounding area undesirable for residential or retail use. The constant movement of cargo on semitrailers can lead to traffic congestion in the area if the highway engineering cannot accommodate the heavy flow.

It is not uncommon for lower-income housing to be located adjacent to industrial parks. The potential for excess noise, traffic, and pollution can drive down prices in the surrounding residential market.

The shift away from heavy manufacturing in the United States in favor of service industries has led to some questions about the proliferation of industrial parks. Though domestic manufacturing has declined, the shipment of commodities and products continues to increase in volume as product consumption escalates. Industrial parks that include ports have taken measures to expand their capacity and adapt to accommodate larger cargo container vessels.