By Doug Hornig, Senior Editor
While we mainly deal with emerging high technology in this space, it's important to remember that innovation is not confined solely to laboratories filled with white coats and server farms staffed by whiz-kid computer engineers. At times, even something generally held in low esteem can be an important part of a revolution.
Before the computer age, sand was thought of as an ingredient of concrete or glass, or the stuff that would burn you if you didn't put a beach blanket between you and it. Providing sand to the limited market for it was a low-end business.
But then, as it turned out, sand (as refined into silicon) proved to be the key ingredient in the manufacture of computer chips. Overnight, the right kind of sand became a highly valuable commodity indeed, especially in its purest form, the highest-grade quartz that comes almost exclusively from a single mine in Spruce Pine, North Carolina.
That stuff sells for $50,000 a ton, and protecting it is now classified as a matter of national security. The perimeter set up around the mine that produces it features the kind of weaponry, razor wire, and checkpoints normally associated with a supermax prison... all to defend some glorified sand.
Similarly, another emerging, innovative trend is being spearheaded by the lowest conceivable tech: a hole in the ground.
At present, the cost of energy is a factor that has to be increasingly considered by offices, warehouses, and manufacturers. That's always been the case, but is even more so now. More energy in the United States now goes into the warming and cooling of buildings than to powering cars and light trucks.
Plus, as the country "goes green" and Washington, DC promotes its save-the-planet, fossil-fuel-reduction agenda, finding novel ways to reduce energy consumption can not only save money potentially, it can also mean access to added incentives and improved PR. Looking for ways to cut those expenditures is a no-brainer for most medium-sized or larger businesses. But to date, few ideas could really make a big dent. Sure, alternative energy could help defray costs a little, but with tons of upfront investment and a lot of complexity. More efficient equipment can cut costs by a few percent too, but still, we're up against the laws of thermodynamics trying to heat or cool a brick box laid out under a blanket of snow or in the blazing sun.
So, what if you could slash your heating bills by up to 85% and completely eliminate the need for air conditioning with one simple move? Wouldn't you jump at the chance?
Well, you can. There's a facility out in Kansas City, Missouri that offers just that. Welcome to SubTropolis.
(Click on image to enlarge)
SubTropolis is the brainchild of Hunt Midwest Enterprises, a privately held mining and real-estate development conglomerate, owned by the Lamar Hunt family. One of the company's interests is in a Missouri limestone mine.
As with any mine, what you're left with at the end of the day, after you've removed the target mineral, is a big bunch of nothing. Empty space. As we know, abandoned mines are scattered all over the landscape. But one fine day, Lamar Hunt or someone close to him at Hunt Midwest got to wondering if that space couldn't be put to some profitable use. Voilà, the company began renting it out, and SubTropolis was born.
This didn't happen last week. In fact, the place dates all the way back to the 1960s. But ever since, SubTropolis has been flying well under nearly all Americans' radar. It's received scant media attention, showing up in a 2010 Atlantic magazine article, being briefly profiled on CNBC and CNNMoney, and playing a pivotal role in bestselling novelist Daniel Suarez's new book, Kill Decision. There's a YouTube video about the facility, but it has been viewed fewer than 3,500 times.
Yet it's impossible to look at SubTropolis without realizing that it makes perfect sense.
If you were going to start creating some office or manufacturing space from scratch, first you'd need a building. In order to construct that, you need things like framing, an exterior wall, a roof. The mine has all of that already, so you start saving big money right from the get-go, on both materials and labor.
There's also no need for site clearance. Which is not only cost efficient, it leaves tree huggers rejoicing that they won't lose a single one. Nor do you have to worry about running afoul of zoning regulations or local aesthetic restrictions. Potential disturbance of natural waterways, animal habitats, or any other feature of the environment is a non-issue.
With so much less to fret over, your building will go up fast. Hunt Midwest Real Estate Development says that an existing space can be finished for a tenant within 30 days, while new space can be constructed in about 90 days. A million square feet, that might take 150 days, according to SubTropolis' website.
Are you manufacturing a product? Then you also require at least road access, along with space for some kind of loading dock. SubTropolis has room to spare. Carved out of the 270 million-year-old stone is 25 million square feet of usable area (45 million more are available for future occupancy), with some 10,000 solid, 16-foot high, 25-foot-square support pillars spaced every 40 feet. (To see what the interior looks like, take a 360° virtual tour of SubTropolis' offices, warehouses, and other features.)
Inside there are roads – six miles of them – which easily accommodate eighteen-wheelers, plus there is a network of more than two miles of railroad track. Yep, trains go right inside. Put in as many loading platforms as you like. And on-site employee parking is, well, ample.
Security? Only one way in and out, with monitoring by management 24/7.
Then there's that energy thing. Once you burrow beneath the surface of the earth, the ambient temperature evens out, averaging about 55°F. Summer or winter, rain or shine, it's always the same. All that needs be added is a few degrees in order to make it comfortable for people year round. Thus at SubTropolis the weather report never changes, day in and day out. "Overcast with temps in the mid 60s," as the locals like to say. Air conditioning is unnecessary, even in July. Humidity levels are also constant at 40-50%.
That means enormous savings on a business's utility costs – anywhere from 50-85% – all while reducing one's "carbon footprint." While that may or may not eventually prove to be of any importance, the concurrent reduction in the use of a non-renewable resource can't be bad.
Of course, the folks who work there never see the sky during their shifts. But they shrug. Who cares? It's no different from working in a store in an enclosed mall, they say.
Sounds like an ideal place to set up shop, at least for some. Among its 50 current tenants are four that do manufacturing or assembly for the auto industry. The highly controlled temperature and humidity – not to mention freedom from fear of tornadoes, floods, and other natural disasters – have attracted Kansas City's USPS Stamp Fulfillment Center, Hallmark Cards, and Grantham University's post-Katrina bookstore warehouse. SubTech, which bills itself as "American's Premier Underground Data Center," is located there. Record preservation is also big. A company called Underground Vaults & Storage uses SubTropolis for the secure archiving of such valuables as original prints of Gone With the Wind and The Wizard of Oz.
After brushing up on SubTropolis, we still had a couple of questions, so we rang up management.
About that ambient temperature: Obviously, air conditioning needs are nonexistent. But if the earth is a constant 55° and SubTropolis maintains temps of 65-70°, we wanted to know, where does the extra heat come from?
Answer: the businesses, equipment, and people inside provide a certain measure of added heat; modest HVAC units supply the rest.
What about ventilation?
This was an interesting one. SubTropolis has two portal entrances, and outside air circulates naturally. The facility essentially "breathes on its own," we were told. Air quality is continuously monitored, and there has never been a problem.
Finally, what happens with water and sewage?
SubTropolis gets its water from the Kansas City water lines. It has sump pumps and sewage ejectors – located in the ceilings of the "buildings" – that expel waste into the public system.
All told, SubTropolis is a fascinating study in how technology sometimes comes full circle. The long history of humanity involves our emergence from cave dwellings into mud huts and then on to the elaborately constructed habitats of the present era. Yet now, for all of our amazing technological achievement, we're finding that those old caves still have a lot to offer.
Doug Hornig is a regular contributor to our technology-sector advisory, Casey Extraordinary Technology. In the current issue, Doug discusses how technology is rapidly changing the face of higher education and opening up fantastic investment opportunities. The issue also features a medical testing company that could double in price within the next two years and a dozen other buy recommendations with similar potential.
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