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Pandemic, Amazon driving growth of east metro mega-business centers

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Pandemic, Amazon driving growth of east metro mega-business centers

An enormous new kind of trucking center is rolling into the Twin Cities — thanks in part to the pandemic and the home-delivery giant Amazon.

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

“We call them flex-centers,” said Carolyn Bates, research director for JLL, a worldwide real-estate service provider. The company reports a metro-area boom in the centers, which combine warehousing, offices, distribution and sometimes light manufacturing.

Their defining feature is their gigantic size. For example, a seven-building project in Cottage Grove will have 2.4 million square feet, the size of 31 typical Cub Foods stores.

EAST METRO PROJECTS

The east metro projects remain mysteries, with the occupants not yet known. None of them has been officially approved, but city officials have welcomed the potential additions to employment and tax base.

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

“That is a very big number,” she said. Usually, demand hovers around 7 million to 8 million square feet.

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

The company blazed a trail in home-delivery e-commerce by building its unified warehouse/office/distribution centers nationwide. 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-fearful customers stayed home and ordered products on-line. In April, the company reported a 44 percent 12-month jump in sales.

OTHER COMPANIES FOLLOW AMAZON

An Amazon Fulfillment warehouse seen July 8, 2019 in Shakopee. (AP Photo/Jim Mone)

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

“It is no surprise to me to see more interest in warehousing complexes,” said Kristina Handt, administrator of Lake Elmo, where a one-million-square-foot project is proposed.

At a meeting Sept. 14, the Lake Elmo City Council heard about the plan to build on a 77-acre site at 34th Street and Ideal Avenue. The $104 million proposal calls for four buildings, employing 560 workers.

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

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