Wednesday, February 26, 2020

Amazon to Build Advanced Fulfillment Center on Site of Former GM Plant in DE

E-commerce giant Amazon is seeking public funding from the state of Delaware to build one of its most technologically advanced fulfillment centers as it ramps up construction around the country.

The Delaware Council on Development Finance approved a $4.5 million grant this week for a 3.7 million-square-foot fulfillment center that Seattle-based Amazon is planning in Newport, a small town southwest of Wilmington, a spokesman for the Delaware Division of Small Business told CoStar News.

The five-and-a-half-story proposed fulfillment center at 801 Boxwood Road is at the site of a former General Motors plant that closed in 2009 and was later demolished, the spokesman said. Dermody Properties owns the site, and a construction timeline has not been finalized. Dermody Properties is expected to spend $200 million developing the property, while Amazon is expected to spend $50 million outfitting the property with equipment and robotics technology, the spokesman said.

The facility is expected to be one of Amazon’s most advanced fulfillment centers as the company seeks to tap increased demand for online shopping, a process that requires warehouse space for organizing orders for doorstep delivery. Plans call for more robotics than Amazon's other facilities, as well as a structure that takes up less land by being built vertically. Amazon is planning vertical warehouse in other U.S. cities such as the Austin, Texas, area and Memphis and Nashville in Tennessee.

A spokeswoman for Amazon declined to comment on the company's plans in Delaware. She added in an email that "Amazon is a dynamic business and we are constantly exploring new locations and weighing a variety of factors when deciding where to develop sites to best serve customers, however, we have a policy of not commenting on our future roadmap and are not yet commenting on any specific operations plans in Wilmington."

The fulfillment center is expected to create 1,000 full-time jobs. Amazon is required to maintain the jobs created while it receives grant funds, according to the contract, which has not been finalized.

Over a period of roughly seven years, the project’s statewide economic impact is estimated to be about $445 million, according to the spokesman with Delaware Division of Small Business.

Some Delaware politicians expressed frustration at the public incentives Amazon is seeking for the project. Amazon, which reported fourth quarter revenue of $87.4 billion last year, consistently receives public incentives for its fulfillment centers and other commercial real estate investments in small and large cities alike.

“Amazon, the multi-billion dollar conglomerate owned by the one of the richest individuals on the planet, Jeff Bezos, is asking for $4.5 million in Delaware taxpayer money,” State Rep. John Kowalko said in a statement on his website. “This is another ‘prime’ example of wealthy corporations seeking corporate welfare from ordinary working families who struggle each day to afford basic essentials.”

Amazon and other retailers are beefing up their industrial footprints across the country as they add more automation to cut transportation time and costs in the era of same-day and next-day delivery.

Amazon plans to open a fulfillment center near Richmond, Virginia, in an empty 798,000-square-foot facility that used to function as an Ace Hardware distribution center. And, Amazon is planning to occupy a $75 million fulfillment center about 60 miles northwest of New York City in Orange County, New York.

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