News Column Eyes Land for DC Hub

Dec. 5, 2012

Kathleen Cooper and Christian

Online retailing giant looks to be planning a second distribution center in Pierce County.

A national real estate company associated with the retailer recently bought 92 acres in DuPont for $26.1 million. The site, next door to Intel, is more than raw dirt. It includes plans for a center that is "permit-ready," the seller said, so it could be built and open in 10 months.

Details about the deal, first reported by the Puget Sound Business Journal, are scarce. Indianapolis-based Duke Realty bought the land in late November. It works with Amazon across the country. Just a few years ago, a company vice president told an industry publication that Amazon was No. 2 in Duke's portfolio.

Amazon would be another corporate heavy hitter for the south Pierce County community that already is home to Intel and State Farm and military families assigned to Joint Base Lewis-McChord.

Two sources with direct knowledge of the project told The News Tribune that Amazon is the intended user of the site. They would not be quoted by name, citing confidentiality agreements. Company representatives did not return a call for comment, nor did officials with Duke Realty.

DuPont city officials also would not answer questions about the identity of the potential warehouse user. City administrator Dawn Masko told the Business Journal that she couldn't discuss the project because of a confidentiality agreement, though she was unclear when it was signed and who it was with. Masko did not return messages from The News Tribune on Tuesday.

Mayor Michael Grayum also declined to say for whom the property is being prepared, though he said his refusal didn't stem from that confidentiality agreement. The mayor said he hasn't signed such an agreement since taking office in January. Rather, he said, it's premature to discuss specifics of a deal that hasn't been finalized.

"We're not going to get people's hopes up and share things that we can't confirm," he said.

He said he didn't know when an announcement would be made. The city is working with Duke Realty to prepare the site for construction, Grayum said. Grading and other site preparation work is under way and will continue through the month.

The News Tribune filed a public records request seeking detailed information about the project. State law gives cities up to five business days to respond. Grayum said the city will provide the requested documents.

The property sale couldn't have come at a better time as the immediate tax revenue could blunt budget cuts the City Council is weighing after voters rejected a tax measure in November.

Grayum estimates real estate excise taxes from the sale would generate $130,000 next year for city coffers. That's enough money to save a police officer or firefighter that is on the chopping block, although it would only be for one year.

"It's only one-time money," the mayor said. "It still doesn't alleviate and fix the need for long-term stable funding for our general fund. It's a Band-Aid."

Tom Colegrove, a member of Take Back DuPont, a recently formed citizens group, said although he has concerns about increased truck traffic, he supports the project because of its potential to grow DuPont's economy and tax base.

"I'm just hopeful that something comes of it," he said. "If nothing else, we get a one-time (real estate excise) tax benefit."

Amazon has operated a leased distribution center in Sumner since 2011. It is in the Sumner Corporate Park north of the city and east of Washington 167 and the Union Pacific Railroad tracks. Called the Summit Building, the 492,124-square-foot structure is in the northwest corner of the warehouse park.

The Summit Building was built in 2004, vacated in 2008 and then renovated for Amazon. Sumner city officials issued the requisite permits in just 10 days. As for how many people work there, Amazon has said only that "several hundred" people do.

The "permit-ready" warehouse in DuPont is almost twice that size. According to online marketing material for the site, it has room for two massive warehouses of 790,000 square feet each. The permit-ready one could be up and running in just 10 months, the sales material says.

"Depending upon a specific user's design criteria, it is very likely that the existing permits could be adapted to accommodate the modified specification (as opposed to submitting new application(s) for the facility)," the sales portfolio reads. "We have a very close working relationship with the City of DuPont and Pierce County, and are confident that any review process required for design modifications will be expedited."

Grayum said he's excited about the jobs and tax revenue the project could bring to the city. He said between 630 to 950 employees could work on the site if both warehouses are developed.

The work to make the site turn-key for potential buyers was done by Michael Sandorffy of Seattle and his investment partners. They have developed other projects in the area including the UPS facility in Auburn. Sandorffy said he doesn't know what Duke plans for the site.

"Even if I did, I couldn't discuss it," he said, "because I'm under a confidentiality agreement."

kathleen.cooper@ christian.hill@

Distributed by MCT Information Services

Source: (c) 2012 The News Tribune (Tacoma, Wash.)

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