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
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.
In Woodbury, developers named the proposed 517,000-square-foot building at Hudson Road and Manning Avenue, Project Belle. Upon completion, approximately 140 trucks per day will go to the site.
The developer, Ryan Companies, has agreed not to identify the tenant. But the employment projections are appropriate for a large-scale consumer goods retailer – 500 jobs that rise to 1,000 during the Christmas holiday season.
There are plans for one million square feet of additional space at Woodbury Business Park.
Drug delivery system maker Kindeva has a 136,000-square-foot headquarters in the park. According to developer Ryan Companies, an additional 1 million square feet is proposed for that site.
City planner Eric Searles said the site would be used for light manufacturing, research and distribution. “It’s all integrated,” he said.
He added that anyone who visits the site will deliver goods locally for consumers and businesses. “It’s about just-in-time delivery,” he said.
The park is on Hudson Road and Settlers Ridge Parkway.
Oakdale, Cottage Grove Projects in the Works
Oakdale’s giant-warehouse entrance to Derby is at the 4Front Technology and Office campus near Interstate 694 and 34th Street.
According to city records, the 24-acre parcel will be the site of a 310,000-square-foot building. Owners have the option of splitting that building into two smaller buildings. Then the project is going to be even bigger. The business park is estimated to more than double in size to 700,000 square feet.
The largest projects will be spread over a 196-acre plot at Cottage Grove, southwest of 100th Street and Ideal Avenue. The undisclosed business will employ 1,300 employees.
There are other proposals that do not exactly fit the definition of a super-sized “flex-centre”, but do meet the demand for light-industrial distribution centers:
- In Inver Grove Heights, a 475,000-square-foot Inverpoint project is proposed along Minnesota Highway 55 near US Highway 52. The developer does not have tenants for that project, and it is unclear whether this will involve a trucking operation.
- A 298,000-square-foot distribution center is proposed at Elmo Lake on Hudson Road, east of Lake Elmo Avenue.
JLL’s Bates said until recently the Eastern metro area had a reputation for having only older and less desirable warehouse space.
“But now,” she said, “that’s changing.”