Broccolini to break ground on massive Ottawa Amazon warehouse in coming days (updated)

Amazon

Online shopping giant Amazon is expected to create 600 local jobs at a massive new 1.02-million-square-foot distribution centre – the largest facility of its kind ever constructed in the National Capital Region – when it opens in the second half of 2019, the developer behind the project says.

Montreal-based Broccolini has started to clear the 96-acre parcel of land, located on the southeast side of the Boundary Road-Highway 417 interchange, just south of GreyHawk Golf Club. The company is in the final stages of the site plan approval process, said James Beach, Broccolini’s director of real estate and development.

“We’re in good shape to start construction in the next week or so,” Beach told OBJ, adding that the developer is “looking to deliver the project in the summer (or) fall of 2019.”

Amazon / Broccolini site

Broccolini – known locally for building the Export Development Canada tower with Canderel as well as constructing Ciena’s new Kanata campus and the downtown Alt Hotel – will own the distribution centre and lease it to Amazon, which will use the space to pack and ship online orders.

Beach said the project costs are expected to run between $100 and $200 per square foot, bringing the total price tag up to $200 million.

He said the company is in a “final competitive process” with potential capital partners to help Broccolini finance construction.

Jobs and infrastructure

The majority of the 600 Amazon employees at the new facility will be tasked with picking, packing and shipping online orders, said Alyssa Tran, an Amazon community relations specialist based in Seattle.

The Ottawa distribution centre will specialize in large items such as household furniture and decor, sporting equipment and gardening tools, Tran added.
She said Amazon will accelerate its recruitment efforts closer to the facility’s opening next year. The new staff will be full-time, receive benefits and be paid a “competitive” hourly wage, she said.

In addition to the 600 full-time jobs Amazon is expected to create, Beach estimated that more than 2,000 construction workers will be on site at different periods over the next 12 months.

Once completed, the facility – which is being designed with ceiling heights of between 36 and 38 feet – will have some 100 truck loading bays and the capacity for more than 1,000 workers on daytime and evening shifts.

On Tuesday, the city’s planning committee endorsed a staff proposal that will allow Broccolini to defer its payment of approximately $8 million in municipal development charges until construction is complete without incurring any interest charges.

At a press conference prior to the committee meeting, Ottawa Mayor Jim Watson said the move will help ensure the project’s viability, and highlighted how Broccolini is slated to spend more than $8.4 million extending services such as water, gas and electricity to the area – services that could aid in spurring additional development in the area.

The mayor also highlighted the employment boom the development will create in southeast Ottawa.

“For decades, we’ve been talking about creating jobs in the east end,” he said. “Today, we move from talk to bringing jobs to the east end.”

Industrial development

Ottawa is not a traditional destination for large-scale regional logistics, warehousing and distribution operations, many of which opt for locations closer to Highway 401.

Amazon’s decision to open a new fulfilment centre in the nation’s capital comes less than a year after another retailer, Giant Tiger, shuttered its Ottawa distribution centre in favour of a much larger facility in the Johnstown Industrial Park east of Prescott.

Thomas Haig, Giant Tiger’s president and chief operating officer, was quoted in 2015 as saying the Ottawa-based retailer had outgrown its Walkley Road facility and was looking for a new location that could support its growing number of stores.

Giant Tiger is far from alone in locating to what Haig called the “logistics alley” along the Highway 401 corridor in eastern Ontario, where Walmart, Shoppers Drug Mart and other retailers operate or contract large-scale distribution centres in cities such as Cornwall and Brockville.

Truck

Compared with competing land parcels in Ottawa, industrial park properties along the Highway 401 corridor have the advantage of being closer to Montreal, Toronto and the U.S. border as well as typically featuring lower development charges and property taxes.

Amazon’s Tran says two of the most important considerations for distribution centre locations are proximity to customers and the ability to tap into a “great workforce.”

At the moment, however, Ottawa’s unemployment rate is at its lowest level in a generation. While that’s a positive economic story for the region, it can also present headaches for local employers looking to hire.

In response to a question about the local labour supply, the mayor pointed to efforts by Invest Ottawa to attract more working-age residents to the city.

“They’re doing some good work in terms of online advertising and marketing Ottawa as a place to live,” Watson said. “We have a quality of life that is second to none. People see that and want to live and work in our city.”

Spinoffs

In addition to building the distribution centre itself, Broccolini will spend “millions” of dollars extending water, gas and electricity to the site and constructing new roads, sidewalks and interchanges, Beach said.

This will also bring central services to some homes in the area as well as land earmarked for future commercial and industrial projects.

While Beach predicted that there will be some spinoff developments, such as restaurants targeting Amazon employees as well as truck service centres, he said he doesn’t expect to see a new wave of industrial space constructed around the Broccolini distribution centre as some have predicted.