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Work Begins on $75.5M Regional Distribution Center

Thu March 13, 2008 - Midwest Edition
Linda J. Hutchinson

The first pre-cast concrete panel was set Feb. 28 for what will be one of the largest warehouses in central Ohio. When completed, the new $75.5 million Whirlpool Regional Distribution Center will have 1.6 million sq. ft. (148,000 sq m) under roof in two buildings. The rail-serviced Build-to-Suit facility will sit on 90 acres (36 ha) at Rickenbacker West industrial park at 3176 Shook Road in south Columbus.

The two-building facility will be the largest project the developer, The Pizzuti Companies, has completed for Whirlpool during their 11-year relationship. Construction is scheduled for completion in fall 2008.

Pepper Construction is the general contractor. The architect for the project is Glavan Feher Architects Inc., of Columbus.

“It’s been a long hard fight to win these huge projects,” said Rick Dilsavor, vice president of land and development, Pizzuti. “There are only a handful around the country. The fact we were able to snag this for Columbus is a huge win for the city.”

“We had to convince [Whirlpool] that our location was the best. We were competing here in Columbus, as well as competing against other sites around the region,” said Dilsavor, who has been working on bringing this project to Columbus for the past couple of years. “The availability of the local work force carried the day. We proved we could deliver a project this size in their extremely compressed schedule.”

Whirlpool Corporation, a manufacturer of home appliances, has more than 68,000 employees, and approximately 50 manufacturing and technology research centers. The company markets Whirlpool, KitchenAid, Brastemp, Bauknecht, Consul and other major brand names to consumers in more than 170 countries.

Whirlpool will be relocating and expanding from its current site in Creekside XII, a 737,000-sq.-ft. (68,469 sq m) Build-to-Suit facility Pizzuti developed in a tight four-month period. Creekside XII is located within the 500-acre Creekside Industrial Center very near the new Rickenbacker West location.

The new rail-served facility is in a Foreign Trade Zone, Community Reinvestment Area, Enterprise Zone, and DHL Special Delivery Zone. It is located within 500 mi. of 60 percent of the U.S. population; within 1 mi. of Interstates 270, I-70 and I-71. It is minutes from Port Columbus International Airport and Rickenbacker International Airport, according to Pizzuti’s Web site.

The Scope of Work, provided by Melissa Ament, public information officer of the Ohio Department of Economic Development stated, “On February 26, 2007, the Ohio Tax Credit Authority approved a 60 percent, five-year tax credit to Penske Logistics LLC and Whirlpool Corporation for the creation of 269 new full-time jobs as a result of the Penske’s third-party agreement with Whirlpool to staff a new regional distribution center in the city of Columbus, Franklin County. As a part of the tax credit agreement, the Authority requires the company to maintain operations at the project site in the city of Columbus for at least 10 years.”

The Jobs Creation Tax Credit “could be a savings of up to $12.5 million over the abatement period,” said Cynthia Rickman, public information officer of the Ohio Department of Economic Development.

An additional 50 percent 15-year Community Reinvestment Area tax abatement for personal property tax was issued as incentive to lure the Whirlpool and Penske project to Columbus.

Rickman said there is “no science” to the process of gaining tax credits in Ohio. There is an application process, which is put before the city council. With state tax credits and city tax incentives, sometimes, getting one is contingent upon getting the other, according to Rickman.

The Job Creation Tax Credit was a major factor in Whirlpool’s decision to expand and place its Regional Distribution Center in the Ohio. Kentucky and Iowa also were in contention.

The city of Columbus will provide local support for the project through an Enterprise Zone Tax Abatement and an MITC. This tax credit will begin January 2008 and will end December 2012.

According to the Scope of Work, “this project is major for Penske Logistics. Land acquisition costs in Ohio are higher than at the other sites [that were] being considered. As a new location, the availability of incentives to offset portions of start-up costs [have made] this site competitive with sites [which were] considered in the other states.”

Whirlpool will make a fixed asset investment of $75.475 million which includes $9.955 million for land acquisition, $56.52 million for building construction, $500,000 for the acquisition of machinery and equipment, $1.8 million in site preparation and $6.7 million in professional fess and other miscellaneous costs. Whirlpool will own the new facility, and Penske will operate it.

“Penske Logistics, with over 1,000 employees, is consistently ranked among the top 10 logistics providers in the United States. Global corporations such as the Ford Motor Company, General Motors Corporation, and Whirlpool have teamed with Penske Logistics to reduce supply chain costs, increase market share, and improve profitability. Whirlpool and Penske Logistics have worked closely to maximize the use and transition of existing facilities as well as developing new facilities to achieve an optimal network design for Whirlpool. The proposed Regional Distribution Center will be one of 10 located throughout the United States, and will be one of five that handles both high and low volume products,” according to the Scope of Work.

“Realizing that Whirlpool was seeking a location in Central Ohio for their new regional distribution center, we aggressively sought and purchased 180 acres in southern Columbus,” Joel S. Pizzuti, president and COO of The Pizzuti Companies stated on the company’s Web site. “We’ve maintained a long-standing, strong relationship with Whirlpool, having developed more than 5.2 million square feet of Build-to-Suit facilities across the United States.

“Pizzuti’s capabilities and aggressiveness allowed us to provide Whirlpool with short- and long-term facility solutions in Columbus in addition to several other locations across the country,” said Jim Miller, Pizzuti executive vice president in statements on Pizzuti’s Web site. “Whirlpool has a very aggressive rollout of distribution centers across the country and we are very pleased they have selected Pizzuti for this facility.”

In addition to the 269 new full-time jobs Penske has promised to provide, Whirlpool will relocate and backfill 70 full-time employees from its Clyde facility. The average wage of the new jobs will be $14.43 per hour, plus $6.50 per hour in benefits. Penske Logistics has committed to hiring at least 10 percent disadvantaged and/or minority persons, as defined by the Ohio Administrative Code.

Currently, Pizzuti is developing master-planned business parks and public/private projects throughout central Ohio, Chicago, Indianapolis, Orlando and Jacksonville, Fla., according to its Web site.

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