Announcement of another Zappos facility appears imminent
By John R. Karman III – Reporter, Louisville Business First
Feb 10, 2012 Updated Feb 21, 2012, 8:47am EST
Amazon.com Inc. has lined up contractors to build a 1 million-square-foot distribution facility at the River Ridge Commerce Center in Jeffersonville.
Officials at the online retailer’s Seattle headquarters could not be reached for comment before Business First’s press deadline, but the companies selected to build the facility have confirmed the project.
Sarah Green, corporate marketing manager for Clayco Inc., a St. Louis-based construction management, engineering and architecture firm, said the company has a contract to build the facility, but she didn’t have additional details.
Officials with Amteck of Kentucky Inc., a Lexington-based electrical contractor and design-build construction manager, could not be reached for comment. But the company’s Web site, www.amteck.com, says that Amteck has been awarded contracts with Clayco to produce two 1 million-square-foot distribution facilities for Amazon — one in Jeffersonville, the other in Dinwiddie, Va.
Meanwhile, a source who asked not to be identified said an announcement is imminent about Amazon subsidiary Zappos Fulfillment Centers Inc.’s plans for a 1 million-square-foot distribution center in Bullitt County.
As Business First previously reported, Zappos needs the facility to support its rapid growth in Shepherdsville. The company plans to hire 5,000 full-time workers in the next three years, and its need for temporary workers during the holiday season is expected to grow to 7,000 to 9,000 annually in the next few years.
River Ridge calls meeting to discuss potential deal
Jerry Acy, executive director of the River Ridge Development Authority, would not confirm Amazon’s plans for the Jeffersonville project.
“We’re working on several different confidential projects,” he said. “I’m not at liberty to discuss any of them right now.”
The authority called a special board meeting for Thursday, Feb. 9, after Business First’s deadline. The purpose of the meeting, Acy said, was to discuss a potential developer’s proposed plans for a project at River Ridge.
He declined to identify the project and said the authority might not take any action on it at the meeting.
The River Ridge Development Authority oversees the redevelopment efforts and operations of the 6,000-acre River Ridge Commerce Center, located on Ind. 62 between Jeffersonville and Charlestown.
The site previously was home to an Army ammunition plant, and it is being reconditioned for commercial and industrial uses.
A 70-acre tract on Patrol Road at River Ridge has been identified as a potential site for the Amazon facility.
Of that, 54 acres is owned by Louisville-based Crossdock Development Inc. The adjacent 16 acres is owned by the authority and could be included in the project.
Acy confirmed that the 70-acre tract would be discussed as a potential site for the project that the authority planned to consider at its meeting late yesterday.
Crossdock president Lee Wilburn declined to comment on the Amazon deal or his potential role in it.
Southern Indiana project called unrelated to tax deal
Amazon already has four large distribution centers constructed or planned in Central Indiana.
The state recently struck a deal with the online retailer that would require it to pay a 7 percent sales tax on operations, beginning in 2014.
Indiana Sens. Ron Grooms of Jeffersonville and Luke Kenley of Noblesville said in a joint statement that “a new facility was not part of the recent sales-tax negotiations or the agreement reached between the state and Amazon for them to start collecting Indiana’s 7 percent sales tax from online purchases.
“Amazon has been a good corporate citizen in Indiana, and their facilities here have created many jobs and business opportunities. We are hopeful that Amazon will consider further expansion in Indiana,” their statement said.
Zappos expansion plans move forward
Eagerly anticipated plans for Henderson, Nev.-based Zappos to build another massive distribution center in Shepherdsville continue to move forward but lag the Jeffersonville project by several weeks, according to a source who would not be identified.
The company, already Bullitt County’s largest employer, with more than 2,500 workers, has outgrown its two Shepherdsville distribution centers — an 832,000-square-foot warehouse in the Salt River Business Park and its original 281,000-square-foot facility in Cedar Grove Business Park.
Last summer, its operations spilled over into a 118,000-square-foot space at Cedar Grove, where it moved its return center.
Zappos officials also could not be reached. But in an October interview, Craig Adkins, the company’s Bullitt County-based vice president of fulfillment operations, said Zappos’ strategy to move beyond its primary product — shoes — to concentrate more on clothing sales is driving its growth.
Several sites available
Zappos officials have not announced a site for their Bullitt County project, but the company has been in conversations with several major developers who have large land holdings there.
Among the candidates are The Flynn Group LLC and Main Street Realty Inc., both Louisville-based commercial real estate development firms.
Jesse Flynn, president of The Flynn Group, declined this week to comment on the status of his talks with Zappos. In October, he told Business First that he and his partners own enough property near Cedar Grove to construct as much as 2.5 million square feet for Zappos if the company eventually needs that much space.
Main Street officials were not available to comment.
Developer Wilburn controls 181 acres adjacent to the Zappos facility at Cedar Grove. He, too, wouldn’t discuss any conversations he might have had with Amazon or Zappos.
Company previously sought tax breaks
Zappos has received state tax breaks for an expansion project in the past, but Bob Fouts, executive director of the Bullitt County Economic Development Authority, would not say whether an incentive package currently is in the offing.
He referred questions to the Kentucky Cabinet for Economic Development, which oversees state tax-incentive programs.
Mandy Lambert, communications director for the cabinet, could not be reached for comment.
Zappos was approved for $6.8 million in state tax incentives in 2004 when it announced plans for its second — and much larger — distribution center.
That Zappos project was based on the creation of 231 jobs, according to state records and previous Business First reports.