Warehouse, logistics development boom could see broader resistance

Some cities and towns that once rolled out the red carpet for new giant distribution centers – and the accompanying growth in tax revenue and jobs – are becoming increasingly hesitant.

As towns like Windsor and South Windsor have experienced a warehouse boom, residents are raising increasing alarm over congestion, pollution and noise concerns, prompting some local governments to contemplate stricter land-use controls.

“I don’t think there’s any question we are seeing that, if you want to call it NIMBY,” said Mark Duclos, president of Hartford brokerage firm Sentry Commercial. “Towns are getting pushback from citizens who don’t want to see it in their backyard, like South Windsor, or the pace of growth just outpaced regulations and things have started to get away from towns.”

Growing resistance to warehouse development was a topic during a recent panel discussion at the Society of Industrial and Office Retailers’ Northeast Regional Conference in Boston, Duclos said. Panelists agreed they are starting to see greater pushback, he said.

Duclos said higher hurdles contemplated in some towns will likely drive developers to look elsewhere.

“It’s slowing down development and there’s plenty of demand out there,” Duclos said. “What we don’t need is even less supply. That’s a challenge.”

Big piece of CT’s economy

Many top officials in Waterbury turned out for a January press conference celebrating the announcement of plans to bring a massive Amazon distribution center to a piece of city-owned land. Gov. Ned Lamont was there, touting logistics as a key part of Connecticut’s economic reawakening.

“We are going to be a logistics center for this entire region,” Lamont said. “You see, that is a big piece of our future.”

That vision was already well underway as a wave of massive distribution centers swept through the state over the past decade.

Towns just north of Hartford have seen a big share of that development. Now, Windsor and South Windsor are contemplating or adopting new regulations to grant local officials greater discretion.

But this is hardly happening in isolation. Officials in Wallingford, Northborough, Mass., and several California communities have contemplated distribution center moratoriums, zoning changes or other controls, according to published reports.

In South Windsor, a resident’s petition for a year-long moratorium on new warehouse and distribution center construction has won support from the town. The Planning and Zoning Commission on April 5 unanimously approved the moratorium so it could take time to craft tighter restrictions.

The community of 27,000 has added seven large distribution centers since 2009, ranging from a 176,763-square-foot building for food-and-beverage distributor Vistar, to a 652,000-square-foot property for discount supermarket Aldi.

South Windsor moratorium advocates argue distribution centers have provided questionable benefits while causing environmental health concerns, traffic congestion, noise pollution and other impacts.

Kathy Kerrigan, a retired insurance worker and teacher who launched the petition, said residents are coming to understand the impacts that accompany this type of development.

“Eight years ago, most people in town were generally in favor of them because of the tax base and jobs, but the reality has set in,” Kerrigan said.

Kerrigan lives in a handsome, 112-year-old home on a stretch of South Windsor’s Main Street that is lined with antique houses. A 292,000-square-foot warehouse for auto-parts distributor MOBIS takes up a good chunk of the skyline behind her backyard, across busy Route 5.

Windsor eyes stronger review

In neighboring Windsor, Town Planner Eric Barz said local officials last year asked him to investigate the possibility of stronger warehouse regulations, following approval of a roughly 500,000-square-foot distribution facility.

The town is now considering adoption of a special-use permit that would create a higher bar for distribution center approvals; currently such facilities are allowed by right in industrial areas.

Barz said conditions that would trigger a special-use permit could include the sheer size of a facility; ratios of loading docks to square footage; truck storage numbers; and other thresholds like proximity to non-commercial or residential areas.

Barz acknowledged the proposal has been “kind of on a back burner” in his busy planning office. He wasn’t certain when it might come up for board review or a vote.

Windsor doesn’t currently have any logistics proposals under review, Barz said, but he has had discussions with potential applicants.

“There is also a lot of interest in [speculative] warehouse [development] right now,” Barz said.

Last July, Windsor officials approved Scannell Properties’ plans for two new spec warehouse buildings totaling 487,200 square feet on a 40-acre triangle of former farmland between Kennedy Road, Hayden Station Road and River Street.

At the time, Scannell, an industrial real estate giant headquartered in Indiana, was building a nearby 823,000-square-foot Amazon distribution center. Amazon previously opened a 1.5 million-square-foot distribution facility at 200 Iron Ore Road in 2015.

Scannell issued a statement in response to questions.

“We value the strong relationships we’ve built with local communities through our development projects in the South Windsor and greater Hartford area, and we respect the community’s concerns,” the company wrote. “Scannell abides by all regulations and will operate within local policies and procedures.”

Enfield residents fight warehouse

In Enfield, major developer Winstanley Enterprises’ plans for an 819,000-square-foot distribution center on former farmland between Shaker Pond and Crescent Lake faced staunch opposition from a determined group of residents, who raised concerns of congestion, pollution, runoff and harm to endangered species.

After listening to both sides, local boards greenlighted the project. Opponents have pledged court appeals and are raising money for attorney fees through a GoFundMe page.

Cheryl Cote, one of dozens of residents pooling money for the fight, said the group aims not only to oppose this project, but also convince the town to adopt tighter zoning regulations.

Thirty-five years ago, Cote and her husband, Paul, moved into a converted 1,100-square-foot cottage along the east side of Shaker Pond with their 1-year-old daughter and newborn son. Now, they have grandchildren who visit to swim in the pond in summers. They worry about runoff from the new warehouse polluting the lake and making it unsafe for use.

“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.”