Consumers weren’t shy about shopping online for everything from clothing to electronics to food before the COVID-19 pandemic hit. But now that the nation continues to battle the virus, ecommerce has become a go-to shopping strategy for even more consumers.
This is why online retailers such as Amazon are thriving while much of the rest of the retail sector is struggling today.
For more proof of Amazon’s continued dominance of the online space, just look to Detroit. That city’s mayor, Mike Duggan, announced on Tuesday of this week a proposal that would bring a new Amazon distribution center to Detroit, on the grounds of the city’s former State Fairgrounds site. The hope is that the new center will open in 2022.
According to the city, the proposed 3.8-million-square-foot, $400 million Amazon distribution center will provide at least 1,200 jobs during the first phase of its opening. Duggan said that the hope is that the distribution center will eventually employ 2,000.
Texas’ Hillwood Investment Properties, which has built Amazon fulfillment sites in states across the country, including recent ones in Pennsylvania, Mississippi, Wisconsin and Tennessee, is developing the project and is expected to purchase the 142-acre former Fairgrounds site. Amazon would be the first major tenant here, and would occupy about half of the acres. Hillwood is expected to pay $9 million for the land.
Hillwood has partnered with Detroit’s The Sterling Group on this project. The Sterling Group already has a strong history in the Detroit market, managing other major projects here, including the renovation of the historic Guardian Building in downtown Detroit.
Hillwood and The Sterling Group have also agreed to develop a $7 million indoor transit center on the site.
According to the city of Detroit, Hillwood is currently in negotiations with Amazon to be the first anchor tenant at the Fairgrounds. This site has been largely vacant State Fair left in 2009. The developer also plans to redevelop the remaining 70 acres with auto parts suppliers or other job generators.
“What Detroit needs more than anything right now is jobs and we are deeply appreciative that Hillwood and the Sterling Group have made our city its choice to purchase the former Michigan State Fairgrounds with the potential to bring more than 1,200 good paying jobs,” said Mayor Duggan.
“The developers and the new tenant will be working closely with our team at Detroit at Work, which will be helping to provide outstanding candidates who are residents of the city,” Dugan said.
“This agreement for the proposed sale of the State Fair Grounds is a tremendous opportunity, not only for District 2 and the City of Detroit, but for the unification of Southeast Michigan,” said Councilman Roy McCalister, whose district includes the Fairgrounds property.
“The potential for 1,200 Amazon jobs at this new facility represents an opportunity to diversify our economy while employing residents of our city. I hope and expect that this new facility will become a major employer, as well as a dynamic training ground for Detroit workers for years to come.”
The timeline for construction is a relatively short one. If Detroit’s city council approves the plan by mid-September, construction could begin by the end of October. In this scenario, the new facility and transit center are expected to begin operations in mid-2022.
“Hillwood is honored to be working with the Mayor and City of Detroit on bringing jobs, investment, and redevelopment to the former State Fairgrounds site,” said Ross Perot Jr, chairman of Hillwood and the Perot Group. “We see this as an opportunity to team up with Sterling Group again to showcase our company’s ability to transform the site into a new hub for e-commerce innovation and excellence.”
Others in the Detroit market said that this development could provide a major boost to Detroit’s economy.
Uptown Gateway Developers, which owns 16 acres of the former fairgrounds site, said that an Amazon facility and transit center will “take the city to the next level.”
The Uptown Gateway Developers’ team includes Earvin “Magic” Johnson; Ben and Doug Maibach of Barton Malow; Gregory Kelser; Dennis Archer; and Dennis Archer Jr. Uptown Gateway Developers is working on plans for an Innovation Center on its slice of the former fairgrounds property. This center will serve to mentor and support Detroit entrepreneurs.
“We’ve been listening to the community. They’ve told us that business innovation, housing, urban farming, nonprofit support and workforce development are important programming needed in the area,” said Christopher Stralkowski, executive project manager with Uptown Gateway Developers.