John R. Karman III
Reporter- Business First
More major construction is coming soon to the River Ridge Commerce Center in Jeffersonville, where Amazon.com Inc. already is building a 1 million-square-foot distribution center that will employ more than 1,000 people.
Louisville-based Crossdock Development Inc., which previously owned the 54-acre site where Amazon will have its fulfillment center, expects to begin work late this summer on a planned 702,000-square-foot speculative industrial building on 37 acres the company still controls at the growing business park.
The project would mark a return in the region to spec building, which came to a halt during the economic downturn.
Crossdock president Lee Wilburn said the initial shell of the building, with 300,000 to 400,000 square feet, will be completed six months after construction begins. The Class A industrial space will be marketed nationally and internationally, he said, to distribution and manufacturing firms.
The building would be expanded as the market dictates.
Wilburn has not yet signed a general contractor or lined up his financing for the project.
Jeffersonville-based Kovert Hawkins Architects Inc. is handling the design work.
Wilburn said he is unsure of the total development costs of the center. He expects to bring on out-of-state capital partners to help fund the venture.
Project would address need for bulk space
Local commercial real estate brokers have complained in recent years that the Greater Louisville market doesn’t have enough bulk distribution space available to satisfy large potential tenants.
But developers have been hesitant to move forward with projects during the recession, largely because of the difficulty in securing traditional bank financing.
Wilburn said he believes it’s a good time to return to spec building.
A number of potential deals are in the local pipeline, Wilburn said, and he’s getting more inquiries from companies looking to move or expand here than he has at any time in more than three years.
Those companies are looking for new bulk facilities with the most modern amenities, especially in the area of energy efficiency, he said.
“We’re out of space,” Wilburn added. “We’re in the space business. It’s better to have it ready.”
Amazon project is $150 million investment
River Ridge, a 6,000-acre business park located on Ind. 62 between Jeffersonville and Charlestown, is poised for further development. The site previously was home to a U.S. Army ammunition plant, and it is being reconditioned for commercial and industrial uses.
Online retailer Amazon officially announced its plans for the park March 27, after months of speculation.
Its distribution center — a $150 million investment for the company — is slated to open in the fall and employ 1,050 by 2015.
A Maryland-based real estate investment trust, KTR Property Trust I, is developing and will own the facility, which is being built on 70 acres.
KTR bought 54 acres for the building from Wilburn and 16 acres for parking from the River Ridge Development Authority, the entity that oversees the redevelopment efforts and operations of the park.
Jerry Acy, the authority’s executive director, said the Amazon project gives River Ridge momentum.
He said the park is generating more interest from potential developers and tenants as the economy recovers.
Acy called Wilburn’s coming project “another avenue for marketing River Ridge” and said it will be “a great asset for us.”
Acy noted the “limited amount” of available bulk-distribution facilities in the market. He said many potential tenants operate “on a short fuse” and look only at existing properties.
“We’re certainly glad to hear the news” about Wilburn’s plans, he said, adding that he “appreciates the confidence” that Crossdock has in River Ridge.
Developer had Amazon site ‘shovel-ready’
Wilburn’s Crossdock has been an active developer at River Ridge.
It owns a 450,000-square-foot building at the park that is leased to the U.S. Census Bureau.
The bureau, which had a short-term lease for the space to conduct the 2010 U.S. Census, plans to move out of the site in May, and Wilburn is shopping the space to another potential user that he declined to identify.
Wilburn called landing Amazon an “important validation” for River Ridge. He said that because Crossdock had the site “shovel-ready,” with all site preparations, utilities installation and permitting completed, the retailer could move quickly with its actual construction.
“We built the pond, and the ducks landed,” he said.
Broker believes spec building might be ‘a bit premature’
Wilburn believes River Ridge has the potential to house several other distribution centers for prominent companies.
So does Phil Charmoli, an industrial broker with Louisville-based Commercial Kentucky Inc.
“River Ridge will be the place to be, long term,” he said, particularly after the long-awaited Ohio River Bridges Project is finished.
The planned East End bridge will provide direct access to the Southern Indiana business park.
Still, Charmoli believes that Wilburn might be jumping the gun if he starts work on his new River Ridge center this summer.
He noted that there are two existing distribution centers in Bullitt County that have more than 500,000 square feet available.
“If he does (start it), he’s probably going to be the first developer that is going to build spec in today’s market,” he said.
“In my opinion, it might be a bit premature,” Charmoli said.
Charmoli said several developers are pondering spec projects in the next year, though, and River Ridge is among the sites under consideration.
Developers have gotten “a nice appetite” for building there, he said.
Wilburn also plans Bullitt County park
In addition to the planned River Ridge project, Wilburn’s Crossdock also is working toward developing another business park in Bullitt County.
As Business First has reported, Crossdock has agreements in place to buy as much as 650 acres there from the owners of Heritage Hill, a high-end residential and golf community in Shepherdsville.
That deal is contingent on the property being rezoned to light industrial from residential uses.
The Bullitt County Joint Planning Commission is expected to consider the zoning change this month.
Link: Louisville Business First