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Wednesday, September 28, 2022

Pandemic, Amazon is driving the growth of Eastern Metro mega-business centers

A huge new type of trucking center is underway in the Twin Cities — thanks to the pandemic and home-delivery giant Amazon.

Such facilities have been proposed for development in Woodbury, Lake Elmo, Oakdale and Cottage Grove, with a total combined floor space of 109 football fields.

“We call them Flex-Centers,” said Carolyn Bates, director of research at JLL, a worldwide real-estate services provider. The company reports a metro-area boom in centers that combine warehousing, office, distribution and sometimes light manufacturing.

Their defining characteristic is their enormous size. For example, a seven-building project in Cottage Grove would have 2.4 million square feet, the size of 31 typical Cube Foods stores.

East Metro Projects

The Eastern Metro projects remain a mystery, with the occupants yet to be traced. None of them have been officially approved, but city officials have welcomed potential additions to the employment and tax base.

JLL’s Bates said businesses are currently seeking 13 million square feet for such facilities in the metro area.

“That’s a huge number,” she said. Usually the demand is around 7 million to 8 million square feet.

That need is being met by similar centers proposed or underway in Blaine, Burnsville, Brooklyn Park and Arden Hills.
Bates said demand is driven by COVID and the success of Amazon.

The company made a mark in home-delivery e-commerce by building its integrated warehouse/office/distribution centers across the country. It opened an 855,000-square-foot fulfillment center in Shakopee in 2016 and plans to open a 755,000-square-foot center in Lakeville this fall.

Amazon sales soared as COVID-stricken customers stayed home and ordered products online. In April, the company reported a 12-month jump of 44 percent in sales.

Other companies follow Amazon

The Amazon Fulfillment Warehouse is seen in Shakopee on July 8, 2019. (AP photo/Jim Monae)

Now, other companies are catching up. According to JLL, they are following Amazon’s prototype of a multi-purpose mega-center.

“I was not surprised to see more interest in the warehousing complex, where the one-million-square-foot project is proposed,” said Christina Hand, administrator of Lake Elmo.

At a meeting on September 14, Lake Elmo City Council heard about plans for construction on the 77-acre site at 34th Street and Ideal Avenue. The $104 million proposal calls for four buildings, each employing 560 employees.

Handt welcomes not only the increase in the tax base, but the diversification. The city has proportionately fewer businesses and more housing than its neighbours.

World Nation News Desk
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