New Amazon fulfillment center could create housing demand in Baldwin City

In this Monday, Dec. 2, 2013, file photo, Amazon.com employees organize outbound packages at an Amazon.com Fulfillment Center on Cyber

Amazon.com’s announcement that it would open a fulfillment warehouse in Edgerton that will employ 1,000 hourly wage employees came at a good time for Baldwin City, a Baldwin City economic development professional said.

Amazon announced March 24 that it would move into an 822,104-square-foot warehouse in Logistics Park Kansas City adjacent to the Burlington Northern Santa Fe Railroad’s intermodal in Edgerton. The exterior of the warehouse is complete, and NorthPoint Development, which built the warehouse on a speculative basis, is now finishing its interior to meet Amazon’s needs.

Ashley Robinson, communications manager for Amazon operations, said the date when Amazon will start its fulfillment center operations in the warehouse has not been set. The 1,000 hourly employees would be joined by “many more” salaried managerial and support staff at the fulfillment center, she said.

The center would fill orders of items larger than 18 inches for national and global destinations, Robinson said.

Amazon will be the largest employer to date to locate in the Logistics Park, which opened in October 2013. That news came just as Baldwin City is set to start an update of its eight-year-old comprehensive plan, said Hank Booth, executive director of the Baldwin City Chamber of Commerce. That’s a good thing for the city, he said.

“Baldwin City needs more housing,” he said. “That has to be addressed in the comprehensive plan. We need to identify places in the community we are willing to have duplexes and those homes not costing $250,000. There will be a lot of people looking to move to Baldwin City, and there is not a lot of housing to show them.”

There are currently only 14 homes on the market in the Baldwin City zip code area, said Dave Hill, president of the Mid-America Bank and president of Baldwin City Economic Development Corporation. He, too, said the updated comprehensive plan needed to identify locations for duplexes and less-expensive homes.

The community will probably have time to get its housing situation in order, if the prediction of Edgerton City Administrator Beth Linn holds true. Edgerton has not seen an increased demand for housing with the opening of warehouses in the Logistics Park and had no new housing starts last year. That’s not a concern because the community is focusing on industrial growth with the knowledge residential growth will follow, she said.

It typically takes at least two years after employees start jobs in new locations to feel secure enough with changes to look for homes nearby, Linn said.

Linn has stated hourly wage employees at the fulfillment center would earn about $30,000 annually. Robinson refused to confirm that figure, saying wages vary by tasks, experience, performance and other factors.

Although higher-paid Amazon managerial employees could be candidates to buy the typical new homes built in Baldwin City, which range from $210,000 to $250,000, such new houses would be out of reach for those earning $30,000 a year, Booth and Hill said. A household of two wage earners taking home that income could afford a home in the $150,000 to $180,000 price range, Hill said. The $30,000 wage would make higher-range homes affordable for some two-income families, he said.

With the Logistics Park 10 miles east on U.S. Highway 56, Baldwin City would probably be edged out of future warehouse development, Hill said. Local property owners would probably want too much for land to compete with the Logistics Park, he said.

There was still plenty of opportunities for the city as a bedroom community, and growth of 3 to 5 percent per year was a realistic goal, Hill said. That growth rate would not change the character of the community, Hill said.

Hill’s confidence is based on what’s coming next to the Logistics Park, and Linn said more warehouses are indeed in the pipeline. On the same date of the Amazon announcement, NorthPoint announced it would start construction of 765,000-square-foot and 927,112-square-foot warehouses. Both would be erected on a speculative basis and should be completed in summer or fall. Under construction are two more speculative warehouses of 550,000 and 650,000 square feet, she said.

Beyond that, there are plans to build warehouses totaling from 15 million to 18 million square feet, Linn said. They would be built in a reverse domino effect, with another warehouse started when a speculative one was filled, she said.

Another consequence of the Amazon hiring and other Logistics Park development could be wage inflation, Hill said.

“Douglas and Johnson counties have 4 percent unemployment,” he said. “Franklin County has 5 percent. When you have unemployment that low, new businesses have to steal employees from other businesses.”