A huge new kind of truck center is rolling into the twin cities – thanks in part to the pandemic and home delivery giant Amazon.
In Woodbury, Lake Elmo, Oakdale and Cottage Grove, this type of facility has been proposed for development with a total floor area of 109 football pitches.
“We call them flex centers,” said Carolyn Bates, research director at JLL, a worldwide real estate provider. The company reports a boom in the metro area of the centers, combining warehousing, offices, distribution and sometimes light manufacturing.
Their hallmark is their gigantic size. For example, a seven-story project in Cottage Grove will have 2.4 million square feet, the size of 31 typical Cub Foods stores.
The metro projects in the east remain mysteries and the residents are not yet known. None of them are officially approved, but city officials have welcomed the potential additions to employment and tax bases.
JLL’s Bates said companies are currently asking for 13 million square feet for such facilities in the metro area.
“That’s a very large number,” she said. Usually, demand hovers around 7 million to 8 million square feet.
This need is partially met by similar centers proposed or underway in Blaine, Burnsville, Brooklyn Park and Arden Hills.
Bates said demand is driven by the success of COVID and Amazon.
The company made a mark in the home delivery of e-commerce by building its total warehouse / office / distribution centers nationwide. It opened an 855,000-square-foot center in Shakopee in 2016 and plans to open a 755,000-square-foot center in Lakeville this fall.
Amazon sales increased when COVID-fearing customers stayed home and ordered products online. In April, the company reported a 44 percent 12-month jump in sales.
OTHER COMPANIES FOLLOW AMAZON
Now other companies are catching up. According to JLL, they follow the Amazon prototype of the multifunctional megacenter.
“It’s no surprise to me to see more interest in storage complexes,” said Kristina Handt, administrator of Elmo Lake, which proposes a one-million-square-foot project.
At a Sept. 14 meeting, Lake Elmo City Council heard about plans to build on a 77-acre site on 34th Street and Ideal Avenue. The $ 104 million proposal requires four buildings with 560 employees.
Handt welcomes not only the increase in the tax base, but the diversification. The city has relatively fewer businesses and more housing than its neighbors.
In Woodbury, developers gave the name Project Belle to a proposed 517,000-square-foot building on Hudson Road and Manning Avenue. When completed, about 140 trucks a day would enter the site.
The developer, Ryan Companies, has agreed not to identify the tenant. But the employment projections fit a 500-job consumer retailer that jumps to 1,000 over the Christmas holidays.
One million square feet of extra space is planned in Woodbury Business Park.
The park is anchored by the 136,000 square meter headquarters of the drug delivery system maker Kindeva. An additional 1 million square feet is proposed for this site, according to developer Ryan Companies.
Urban planner Eric Searles said the site would be used for easy manufacturing, research and distribution. “It’s all integrated,” he said.
Whoever moves into the place, he said, is likely to deliver goods locally to consumers and businesses. “It’s about delivery just in time,” he said.
The park is located off Hudson Road and Settlers Ridge Parkway.
OAKDALE, COTTAGE GROVE PROJECTS AT WORK
Oakdale’s entry into the derby with large warehouses is on the 4Front Technology and Office Campus, near Interstate 694 and 34th Street.
According to city records, a 24-acre parcel would be the site of a 310,000-square-foot building. The owners have the option of dividing the building into two smaller buildings. Then the project will be even bigger. The business park is expected to more than double to 700,000 square feet of space.
The largest of the projects would be spread over a 196-acre plot of land in Cottage Grove, southwest of 100th Street and Ideal Avenue. The unidentified company would employ 1,300 workers.
There are other proposals that do not exactly fit the definition of a super-sized “flex center”, but which meet the demand for light industrial distribution centers:
- In Inver Grove Heights, the 475,000-square-foot InverPoint project is proposed along Minnesota Highway 55 near U.S. Highway 52. The developer has no tenants for that project, and it is unclear if it will include a truck operation.
- A 298,000-square-foot distribution center is proposed in Lake Elmo on Hudson Road east of Lake Elmo Avenue.
JLL’s Bates said that recently the eastern metro area had a reputation for having only older and less desirable storage space.
“But now,” she said, “that is changing.”
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