Financial News & Daily Record: Zeus-Making Case for 800-Job Logistics Center
Link: http://jaxdailyrecord.com/showstory.php?Story_id=549736
By Karen Brune Mathis, Editor
With city and business leaders tight-lipped about the identity of Project Zeus, the facts in evidence indicate the possibilities.
What is known through public records between JAXUSA Partnership and the Jacksonville Transportation Authority is that an unidentified major company wants to establish a 1.3 million-square-foot fulfillment distribution facility in the Southeast U.S. with up to 800 jobs.
It has short-listed four sites and two are in Jacksonville.
And “Imeson” is a potential location, based on an April 6 “Project Zeus Agenda” for a working lunch meeting at The River Club with city and economic development leaders.
A JAXUSA email clearly states that it is not Amazon.com, which already plans a large presence in Jacksonville with two fulfillment centers expected to open this fall.
JAXUSA Partnership, the economic development division of JAX Chamber, said Tuesday it had no comment.
City spokeswoman Tia Ford said by email that “we have no information to provide related to Project Zeus at this time (documents or otherwise).”
Florida State College at Jacksonville spokeswoman Jill Johnson said Tuesday that its records show that Cedrick Gibson, Kent Campus/Cecil Center president, attended the lunch and circulated information about the college’s logistics training.
Gibson was joined on the agenda by economic development, transportation, utilities, project approval and incentives representatives.
All that said, here are some of the expectations.
Who is it?
A fulfillment distribution facility these days typically means an e-commerce center, such as Amazon’s. Companies don’t develop big buildings to fulfill and distribute catalog sales anymore.
And a 1.3 million-square-foot center is a big commitment, indicating it would be a large company.
That leads to questions whether Wal-Mart Stores Inc. might be in the market for a fulfillment center in Jacksonville.
It might, if it operates like Amazon.
According to MWPVL International Inc., a Montreal-based logistics consulting firm, Wal-Mart opened two large e-commerce fulfillment centers in Davenport in Central Florida last year – one at 900,000 square feet and another at 1 million square feet.
Would it need another? Consider that Amazon has two large fulfillment centers in Central Florida, too.
MWPVL said Wal-Mart typically opens its large centers in pairs around the country with the objective of providing two-day service to 90 percent of the country.
However, MWPVL also noted that the only region that it found currently underserved by Wal-Mart was the Pacific Northwest.
When Wal-Mart provided a “sneak peek” to officials in 2015 of its new 1.2 million-square-foot commerce center in Atlanta, the company said the facility was part of a network “that ships packages faster and more efficiently.”
“We’re rapidly enhancing our fulfillment capabilities to give customers more choices and fast shipping, while keeping our costs down so we can continue to lower our prices,” Neil Ashe, CEO of Walmart Global eCommerce, said at time.
Then there’s the code name. While those don’t always reflect the company it protects, “Zeus” is the supreme God in Greek mythology, so it must be big.
That might be another reason why Wal-Mart, which Fortune magazine declared to be “easily the planet’s largest retailer,” comes to mind.
Wal-Mart did not respond to an email for comment.
Wal-Mart has looked favorably at Northeast Florida before for large projects. It opened an almost 900,000-square-foot food distribution center in Baker County in 2002.
And in 2006, Wal-Mart made local headlines when sources said the Bentonville, Ark.-based company was looking at Cecil Commerce Center to set up a global distribution center, although that project didn’t happen.
When will we know?
A short-list indicates timing could be imminent, and that means a large site would need to be ready for development.
If the fulfillment center is tied to retail sales, then it likely wants to up and running before a holiday season. To do that, for 2018, it would need to start construction soon.
Again, consider Amazon, which is on track to open its two Jacksonville centers this fall.
It was more than a year ago that speculation heated up about Amazon opening in Jacksonville.
Then on April 12, 2016, incentives legislation was filed with the city for the first Amazon center, code-named Project Rex, in Northwest Jacksonville near Jacksonville International Airport. The bill was approved that month.
Project Vero, a second Amazon center in Cecil Commerce Center, followed. Those incentives won approval in July.
While the city doesn’t immediately have to announce the name of the company even if incentives are approved, the identity of the company usually emerges in public documents or on hiring sites.
Where would it go?
Of sites that might be ready for such a development, three stand out: Imeson International Industrial Park and NorthPoint Business Park, both in North Jacksonville, and AllianceFlorida at Cecil Commerce Center in West Jacksonville.
It doesn’t appear to be AllianceFlorida, according to Dan Tatsch, senior vice president of developer Hillwood Investment Properties.
“We’re not on the short list, to my knowledge,” Tatsch said Tuesday.
The other two site representatives wouldn’t say anything.
Peter Anderson, vice president of Pattillo Industrial Real Estate, and Dan Webb, president of Imeson International Industrial Park Inc., both declined comment about potential interest in their sites by Project Zeus.
Each has space.
When Imeson sold 14 buildings in the North Jacksonville business park in January, Webb said that the company kept 500 acres for development. Imeson is north of Heckscher Drive and east of North Main Street.
“Our plans are to build some new product up there,” he said at the time.
The 350-acre NorthPoint Industrial Park, operated by Pattillo, is north of the Interstate 295 East Beltway between New Berlin Road and Alta Drive.
A 1.3 million-square-foot distribution center would need at least 80-90 acres for development, and both parks appear to have that available.
Also, both are near the JaxPort marine terminals, Jacksonville International Airport, I-95 and I-295, and are not far from I-10.
That makes it easier to take delivery of, and to deliver, products.
What about the jobs?
If Project Zeus resembles Amazon, its fulfillment-center workforce would be topped with a few hundred jobs that pay an average of about $50,000, but the majority of the workers would make $12-$15 an hour.
Amazon has pledged to hire 2,700 employees. Area city and business leaders have said that the larger region could provide the labor force for those positions.
Seasonal work would mean even more positions to fill.
Considering Amazon has not yet staffed up, it’s not clear how many qualified applicants it might attract. That number would indicate whether Zeus can easily fill its jobs.
Gibson at FSCJ circulated information to Zeus representatives about the college’s Global Logistics and Supply Chain Technology certificate and courses, its Logistics Bachelor of Applied Science degree, its Supply Chain Management associate in science program and other assessment, training and certification.
Candace Moody, vice president of CareerSource Northeast Florida, today was on the agenda with Gibson. She said she could only comment about companies that have announced a project.
What might it cost?
A center the size proposed by Zeus would cost at least $100 million and higher depending on the complexity of the center.
For example, Amazon will invest $200 million into its multi-level fulfillment center in Northwest Jacksonville, which will handle small consumer goods.
The footprint is 855,000 square feet, but the facility will be highly automated and its multilevel construction adds up to 2.4 million square feet of space.
Amazon will invest $115 million into its 1 million-square-foot Cecil Commerce center facility for large items.
MWPVL reported that the Wal-Mart e-commerce fulfillment centers in Davenport represented $100 million and $107 million investments.
City and state incentives also are expected, given the number of jobs and the involvement of Enterprise Florida and the mayor’s Office of Economic Development. Representatives of both were among the group included on the April 6 lunch agenda.
The city and state incentives for Amazon add up to $8.3 million for the Cecil project and $18.4 million for the Northwest Jacksonville facility. That location was awarded road funds for access improvements.
What’s next?
Considering Zeus is down to four sites, with two in Jacksonville, it’s likely that city legislation for incentives might be the point at which its interest is confirmed, unless it pursues preliminary regulatory reviews.
If Zeus chooses a site outside Jacksonville, or it delays or tables its plans, its identity might remain unknown.
Project Zeus
Project: Fulfillment distribution facility
Size: 1.3 million square feet
Jobs: Up to 800
Company: “Unidentified major company”
Short-list: Four sites; two in Jacksonville
Site visit: April 6-7
Source: Email from JAXUSA Partnership to Jacksonville Transportation Authority CEO Nathaniel Ford
@MathisKb
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