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UPSTATE NEW YORK
From Site Selection magazine, July 2019
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A Bright Horizon for Logistics

There’s a lot to like in New York’s Capital Region.

UPSTATE NEW YORK
The city itself may be built out already, but Albany anchors a region that’s a haven of distribution.
Photo: Getty Images

by GARY DAUGHTERS

As its retail rivals shrivel, Dollar General (DG) is bulking up across the country, having announced plans to open 750 new stores this year. With more than 15,000 locations scattered from coast to coast, the discount chain is finding particular success in rural communities, where DG sometimes is the only game in town.

The company’s enviable growth continues to be a boon to small cities like Amsterdam, New York, about 40 minutes northwest of Albany, where DG is bringing some 430 new jobs. There, the company is standing up a 750,000-sq.-ft. (70,000-sq.-m.) distribution center, its 16th nationwide, to support new retail stores in western and northern New York.

“Amsterdam was chosen in part for its convenient location to Interstate 90,” DG said in a statement,” while also citing proximity to DG stores throughout the Northeast.

Richard Sleasman, president and managing director of CBRE-Albany, says the Albany region has seen a surge of big-box warehouses. He cites Amazon, which moved forward in June on a plan for a massive distribution center in Schodak, an Albany suburb.

“Amazon typically targets million-person population centers for these facilities,” Sleasman tells Site Selection. “Albany is just at that point. They recognize our marketplace as a mature enough and large enough market to require one of their distribution centers to be here. Out of Albany, you can be in Boston in under three hours, New York in well under three hours, Montreal in three hours, and western New York in three hours. With I-87 and I-90 intersecting here, it’s perfect to be an alternative transportation hub.”

Inside and Outside the ‘First Circle’

To be sure, Sleasman cautions, upstate New York is not about to supplant northern New Jersey or Pennsylvania’s Lehigh Valley as a mecca of distribution. Still, the region delivers value relative to other logistics hubs.

“The cost of land and construction and entitlement, especially in the north Jersey market, is getting very expensive,” he says. “Here, the entitlement process is quicker and the overall cost of land and construction is less expensive.

“But,” Sleasman says, “one of the big factors today is the labor market. Some of these smaller towns have seen some real hits in upstate New York with manufacturing closing up, and they’ve got available, skilled workforces. Especially when it comes to distribution centers, they look at that as a very important part of the conversation.”

Richard Sleasman

“I think the biggest surge we’re going to see is in Montgomery County.”
— Richard Sleasman, President and Managing Director, CBRE-Albany

An arc north and west of Albany is earning converts within the DC world. Tractor Supply Company, which calls itself the largest rural lifestyle retailer in the U.S., opened a 950,000-sq.-ft. (88,260-sq.-m.) distribution center in Herkimer County in March, an investment projected to create more than 350 full-time jobs in the first five years. Ace Hardware operates a 1-million sq.-ft. (93,000-sq.-m.) distribution facility in Saratoga County. Target employs about 750 people at a distribution center in Montgomery County, near the new Dollar General facility. Sleasman says Montgomery is a place to keep an eye on.

“Due to the availability of land, I think the biggest surge we’re going to see is in Montgomery County. It’s right on Interstate 90. There are hundreds of acres of land that the county has designated for this purpose. They’ve been very proactive with trying to get the land entitled and working on water and sewer extensions. Albany County itself is pretty well built out, so we’re looking at some of the counties outside the first circle.”

Amazon Gets the Go-Ahead

As Site Selection’s deadline loomed, Amazon took major steps toward building its $100 million distribution center in Schoback. A real estate analyst in Albany tells Site Selection that the reported purchase of 113 acres (45 hectares) in mostly-rural Schoback signals “full speed ahead” for a project plagued by opposition, including a lawsuit filed by local activists that was dismissed by the New York State Supreme Court, but on appeal even as work at the site commenced hours after the property sale was announced June 20.

Scannell Properties of Indianapolis, a developer working with Amazon, reportedly paid $3.1 million for adjoining parcels totaling 116 acres (40 hectares). Projected to create at least 800 jobs and generate annual earnings of $22 million, the 1-million sq.-ft. (93,000-sq.-m.) distribution center would have easy access to I-90.       

Hope for a Neglected Technology Center

The purchase of a 165-acre (67-hectare) parcel by a Chicago real estate investor has produced a mystery in Saratoga County. InSite Real Investment Properties reportedly had been scouring the Albany region with an eye toward developing another distribution center. The Albany Business Review reports that InSite is working with Lowe’s, but neither Lowe’s nor InSite nor county development agencies have been willing to comment on the record.

InSite bought land in the 1,414-acre (573-hectare) Luther Forest Technology Campus, which, since it opened in 2004, largely has languished in its efforts to lure technology companies other than anchor tenant GlobalFoundries, which employs some 3,000 people at its Fab 8 computer chip factory. The state has spent some $33 million building miles of roads at the campus that are largely empty.

With two-mile access to I-90, the campus is set up with infrastructure for nanotech manufacturing and R&D. But it’s also 15 minutes from rail service and half an hour to both Albany International Airport and the Port of Albany on the Hudson River.

In a welcome development for the area, Key Capture Energy broke ground in September on a 20-MW utility-scale battery storage project that’s to enable the creation of 25 construction jobs and nine full-time positions. Saratoga County Prosperity Partnership President Marty Vanags said she was “especially pleased to be leading the first development on the Luther Forest Technology Campus since GlobalFoundries.”

Gary Daughters
Senior Editor

Gary Daughters

Gary Daughters is a Peabody Award winning journalist who began with Site Selection in 2016. Gary has worked as a writer and producer for CNN covering US politics and international affairs. His work has included lengthy stints in Washington, DC and western Europe. Gary is a 1981 graduate of the University of Georgia, where he majored in Journalism and Mass Communications. He lives in Atlanta with his teenage daughter, and in his spare time plays guitar, teaches golf and mentors young people.

 




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