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November 16, 2020 Town Profile: South Windsor

S. Windsor's open space lures e-commerce shippers

Photo | Contributed Avistar, a division of Virginia-based foods distributor Performance Food Group, occupies a distribution center at 175 Sullivan Ave. in South Windsor.

It’s been more than a decade since plans for an ambitious $71-million South Windsor movie studio project were first publicly aired.

That development promised to bring Hollywood films and TV shows to the town’s I-291 corridor at the intersection of Route 5.

But after years of made-for-TV drama surrounding the project, it never materialized.

Instead, a different type of industry has sprouted in town: distribution centers.

In fact, since 2017, about 1.5 million square feet of distribution space has been erected in South Windsor by a single developer — Indiana-based Scannell Properties.

That space has led to more than $100 million in investment and attracted top corporate tenants, including Home Depot, which has signed a long-term lease for a new $50-million, 421,000-square-foot distribution facility currently being developed on Ellington Road — in and near the failed movie studio location.

Industrial properties have been the hottest segment of Connecticut’s commercial real estate market in recent years, and many have been built in north-central Connecticut, where large swaths of open land and easy access to major highways have made it attractive for companies — particularly e-commerce retailers — to set up distribution centers closer to their end customers.

Home Depot’s Connecticut investment comes as the home-improvement retailer has been spending large sums of money to beef up its online sales.

That strategy got off to a slow start but has picked up during the COVID-19 pandemic, as more people purchase goods online and undertake “do-it-yourself” projects while stuck at home.

Home Depot’s goal is to get online purchases to customers in a day or sooner so it can compete with the likes of Amazon. To do that, it needs to warehouse products closer to where customers actually live.

“This [Connecticut] location is part of our strategic investment in our supply chain network to offer same day/next day delivery to 90% of the United States,” a Home Depot spokeswoman said.

The Home Depot distribution center is nearing completion and will be operational by next spring, the spokeswoman said.

Business friendly

Daniel Madrigal, Senior Development Manager, Scannell Properties

Scannell Properties has built at least 10 distribution centers in Connecticut in recent years, but has found South Windsor particularly attractive because of its availability of open land, quick and easy access to I-91 and I-84, and pro-business environment, said Daniel Madrigal, senior development manager of the Indianapolis-based company.

“As far as development goes in Connecticut there is a lot of red tape,” he said. “The key to our success is developing strong relationships with state and local officials and we’ve done that in South Windsor.”

In addition to the Home Depot property at 360 Ellington Road, Scannell is building another 182,000-square-foot distribution and storage facility at nearby 240 Ellington Road. That property was being built on spec — meaning no tenant was lined up before construction started — but Scannell recently found a Fortune 500 company to occupy the entire space, Madrigal said.

He declined to name the tenant.

Late last year, Coca-Cola Beverages Northeast debuted its new $49-million, 200,000-square-foot Scannell-built warehouse and distribution facility at 359 Ellington Road.

Photo | Contributed
Inside Coca-Cola Beverages Northeast’s South Windsor sales center on Ellington Road.

The property — home to 300 employees — has automated machines that help pick, sort and organize orders for delivery to more than 6,500 customers, according to Coca-Cola Beverages Northeast spokesman Nicholas Martin.

Scannell also built the 292,000-square-foot auto-parts warehouse at 135 Sullivan Ave., for Mobis Parts of America, and 168,000-square-foot facility at 175 Sullivan Ave., which is currently occupied by Avistar, a division of Virginia-based national foods distributor Performance Food Group.

Early this year, Connecticut’s largest commercial landlord, Winstanley Enterprises, bought both of those properties for roughly $44 million.

Madrigal said Scannell is bullish about Connecticut and New England in general and is scouring the state for new potential projects.

Michael Maniscalco, Town Manager, South Windsor

South Windsor Town Manager Michael Maniscalco said the only thing stopping South Windsor from potentially adding more distribution centers is lack of space. With the aggressive new construction in recent years, South Windsor is running out of open land.

One of the strategies the town has used to woo new development is using tax abatements. In fact, it’s given out three in the last year, including one to Scannell’s Home Depot project, which received a seven-year property tax break worth roughly $2.7 million.

“We pride ourselves on being as business friendly as possible,” Maniscalco said.

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