Hartford Business Journal

20220411_Issue

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7 HARTFORDBUSINESS.COM | April 11, 2022 Deal Watch "We aren't multimillionaires here, we are just hardworking people trying to make a living, trying to have a decent life," Cote said. "It's just sad we have to take these measures to protect ourselves and our children." Winstanley paid $12 million for Hallmark's 324-acre distribution center campus near Shaker Pond and Crescent Lake in 2016. The company says it spent more than $41 million renovating two buildings on the Bacon Road site, which were leased to three tenant companies in 2018. Winstanley carved off a 200-acre piece of the Hallmark property for redevelopment, which is where it aims to build the 819,000-square-foot distribution center. Winstanley said it consulted with neighbors about the pending project, designed robust stormwater controls and left a buffer of trees to screen neighborhoods. The company has also pledged to donate 22 acres of field and woods as a permanent conservation zone. Winstanley hoped to break ground June 1, but company President Adam Winstanley said he now anticipates project- approval appeals will tie up the development in a six- to nine-month court battle before construction can begin. Winstanley said a single tenant has signed a letter of intent for the pending building, with plans to occupy about 600,000 square feet and then recruit a subtenant for the remainder. Winstanley stressed his company is deeply invested in Enfield, leasing space to Coca-Cola, Advanced Auto Parts and others. Winstanley said he put together a "world class" design and development team for the latest Enfield project, addressing all concerns raised. That work proved out in unanimous votes from the town's Inland Wetlands Commission and Planning and Zoning Commission, he said. "I frankly have received dozens of supportive emails from members of the community that felt we were the best company and the best team for this particular project," Winstanley said. "We are not a company based in California. We are a local company. We are part of the community. I have been here a long time." Logistics momentum Warehouse and logistics center demand picked up between 2010 and 2015, then rapidly accelerated between 2015 and 2020 due to the growth of e-commerce, Winstanley said. As companies pushed to shrink delivery times, more buildings were needed to have products closer to customers. Winstanley predicts demand for new warehouse and distribution space will remain heavy for another two years, then taper off as companies' logistics needs will have been satisfied. "This isn't going to go on unabated," Winstanley said. He cautioned that a move to special- use permits might inadvertently turn off developers, who can spend several million dollars designing and permitting large-scale projects. They might not want to risk that investment in a process seen as more subjective and less certain, he said. Duclos, of Sentry Commercial, said he isn't certain when the current "insatiable" demand for logistics space will taper. From his vantage, that point isn't on the horizon. "By talking to colleagues and developers in the market, we are not there yet, and nobody sees the end in sight," Duclos said. "What they are seeing is the end of available parcels. Land is getting very difficult to find." Development appetite South Windsor Town Manager Michael Maniscalco said he understands the shock of some residents at the rapid development in certain areas of town. But the growing community needs new tax revenue to fund needs like the recent $100 million construction of four schools. "Without having significant grand list growth, we will have to see tax increases," Maniscalco said. Developments have brought millions in new taxes, with more to come as tax incentive deals continue to expire. The seven large-scale distribution projects built in South Windsor since 2009 have raised the assessed value of associated property from about $3.1 million to $107 million, according to South Windsor Assessor Mary Huda. Equipment used in these facilities has a combined assessed value of another $26.3 million, Huda said. After temporary tax incentives, that translates into $3.3 million in real estate and personal property taxes paid in the current fiscal year, officials said. The last of the tax incentives provided to the various projects, mainly in the form of temporary tax abatements, will expire in 2026, resulting in significantly greater tax returns from these properties, Huda said. Maniscalco said the town has worked with new businesses to reduce impacts from development. For example, Coca-Cola spent tens of thousands of dollars retrofitting trucks to reduce the volume of backup alarms. Home Depot took similar measures with its fleet. Maniscalco said the impact of the moratorium is misunderstood. It wouldn't, for instance, preclude rehabilitation or reuse of existing buildings. Some developers have walked away from talks after the moratorium potential was widely publicized, Maniscalco said. However, the notion South Windsor is closed to development is "very far from the truth," he said. "Everybody is thinking it is a flat, across-the-board industrial moratorium," Maniscalco said. "That is not the case. We are spending a good amount of time explaining this to potential businesses." Kathy Kerrigan, of South Windsor, successfully pushed for a one-year moratorium on construction of new warehouses and distribution centers. Her backyard overlooks a large distribution center across Route 5. Adam Winstanley Michael Maniscalco Chewy backing away from $135M Windsor distribution center By Michael Puffer mpuffer@hartfordbusiness.com P et products retailer Chewy is backing away from plans for a $135 million fulfillment center in Windsor. Even so, the developers that lined up to erect the giant e-commerce company's planned 750,000-square- foot building said they are going to proceed with construction anyway. The logistics market is so hot that representatives from Winstanley Enterprises and NorthPoint Development said they will build a distribution center in the Great Pond Village mixed-use development district on a speculative basis. "The commitment from Chewy was placed on hold, but the Winstanley/ NorthPoint team is very confident in the market and therefore are marching forward with building the warehouse," Winstanley spokesperson Matthew Watkins wrote in an email to the Hartford Business Journal. "They feel that the tenant demand will be there." Winstanley and ABB Group — owner of the former Combustion Engineering nuclear-boiler production and testing facilities that once occupied the Great Pond site — are the master developers of the 625-acre Great Pond district, which is targeted for large-scale residential and industrial development. Winstanley teamed with NorthPoint on the distribution center because the Montana-based developer has repeatedly built for Chewy. Winstanley Principal Adam Winstanley said the plan is to break ground on the distribution center project in June or July. It is also possible that Chewy might revisit plans to inhabit the space, he said. Windsor's Town Council, on Feb. 7, granted Chewy a tax abatement and building fee waivers worth about $3.1 million. Jim Burke, who recently retired as Windsor's economic development director, said Chewy communicated to the town it is not prepared to move forward but didn't go into specifics. Chewy and Windsor Town Manager Peter Souza would have had six months to sign a deal based on the conditions agreed to Feb. 7, Burke said. In theory, this gives the company a window to return to the project. Attempts to reach a Chewy spokesperson were not successful. Windsor Town Planner Eric Barz said the development still needs site plan approval. He anticipates design changes based on Chewy's withdrawal. "Chewy is on the fence," Barz said. "[The developers] are going to build the warehouse regardless of whether Chewy occupies it or not. I think they are still holding out hope Chewy might pull the trigger."

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