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Jul 05, 2023

Agile Cold Storage plans $170M Claymont, Delaware, warehouse

Agile Cold Storage plans to invest upward of $170 million into this facility at the former Claymont steel mill. | PHOTO COURTESY OF AGILE COLD STORAGE CLAYMONT – A cold-storage and distribution

Agile Cold Storage plans to invest upward of $170 million into this facility at the former Claymont steel mill. | PHOTO COURTESY OF AGILE COLD STORAGE

CLAYMONT – A cold-storage and distribution company aims to invest upward of $170 million into a new facility at the former steel mill in Claymont.

While most of the millions of square feet built in Delaware in the last five years is typical four-wall warehousing, Georgia-based Agile Cold Storage aims to build a climate-controlled warehouse at its First State Crossing project off Naamans Road in northern Delaware.

Agile is a 3-year-old, third-party logistics provider that stores and distributes for other companies. It has two existing warehouses in Georgia with a third on the way, but this would be its first out-of-state expansion for the Gainesville, Ga., company.

John Ripple, right, senior vice president at Agile Cold Storage, explains the operations of the young company during their Council on Development Finance hearing. | DBT PHOTO BY JACOB OWENS

John Ripple, senior vice president for automation at Agile, explained that each facility typically supports three to five customers, and that the Delaware facility would bring one existing Agile customer to it with another bringing its operations from the Port of Newark, N.J.

Agile plans to import food products at nearby ports to distribute within the mid-Atlantic region. The 265,000-square-foot warehouse would be built in two phases, with construction aimed to begin this fall and last upward of five years. It will support the creation of 130 new jobs, with an average annual salary of about $56,000.

To support the hiring and construction, the state’s job investment board, the Council on Development Finance (CDF), approved on Monday a grant from the taxpayer-backed Strategic Fund worth more than $4.56 million. It’s the largest grant approved by the CDF this year.

“We are excited that Agile Cold Storage is choosing Delaware for its next facility. This will create good jobs and economic investment in Claymont,” Gov. John Carney said in a statement after the grant’s approval. “Their operations will build on Delaware’s strong foundation in food manufacturing and transportation, helping our region’s supply chain.”

Ripple told the CDF that geography played a big part in Agile’s interest in the Claymont site, as it lies about midway between the Port of Wilmington and the Packer Avenue Terminal in Philadelphia.

Right now, existing customers that are utilizing the Philadelphia terminal are being shipped to South Jersey and then back west to end users, and Ripple said that Agile would prefer to bring those products to Claymont. Another client that is using the Port of Newark, N.J., would like to come to the Port of Wilmington, but there isn’t any cold-storage capacity, he said.

This parcel on the former Evraz steel mill is planned to become Delaware’s newest cold-storage warehouse, employing more than a hundred people. | DBT PHOTO BY JACOB OWENS

The Agile warehouse would lie near the Interstate 95 interchange across the road from the former Tri-State Mall. It marks a departure from the original development plan from Community Development Company (CDC) announced before the pandemic, which had targeted the 31-acre parcel for office and retail development.

CDC Executive Vice President Stephen Collins has said that the downturn in office demand amid the new work-from-home and hybrid work trends convinced his firm to pursue a new best use for the site that was previously the steel mill’s scrapyard.

“This was originally slated to be a high-rise office building but, as you know, the market for office space is pretty slow right now and this very attractive cold storage facility came forward. So, we were able to strike a deal with them,” Collins told the state’s planning office this past spring.

The project has been approved for expedited review by New Castle County’s Jobs Now program and the Delaware Department of Transportation, potentially speeding the time to build for the industrial-zoned site.

In Delaware, there are only four current cold-storage warehouses, with two on the Port of Wilmington site to accommodate produce leaving refrigerated ships. The warehousing niche has been seeing growing demand by investors, however, with 39% of investors expressing interest in the industry in CBRE’s 2022 Investor Intentions Survey – up from 7% in 2019.

Megan Kopistecki, the senior manager for business development at the state’s public-private economic development agency, Delaware Prosperity Partnership, which has been working with Agile on the project for about a year, emphasized the demand for newer cold-storage space.

The 265,000-square-foot cold-storage warehouse would be developed in two phases. | MAP COURTESY OF NCC

“Demand for cold storage facilities is at an all-time high right now. More than 70% of all storage facilities in the U.S. were built before 2000, with the average facility more than 40 years old. Older facilities lack the taller ceilings and the wider column spacing that allow for increased inventory and more efficient operations,” she said.

Cold-storage warehousing is considerably more expensive to build than regular warehousing because of the industrial chillers and insulation required to keep refrigerated or even subzero temperatures in a space. Those costs usually lead to higher asking rents and longer leases though, providing some job stability for local markets.

At First State Crossing, the cold-storage warehouse would join a traditional, 385,000-square-foot speculative warehouse being built just to the southeast by First Industrial Realty Trust, a top publicly traded real estate investment trust. It would also sit across the street from another redevelopment project where New York-based developer KPR will raze the former Tri-State Mall and build a 525,000-square-foot distribution center.

The trio of projects aim to kickstart the Claymont economy that has suffered following the closure of the Evraz steel mill, with CDC aiming to invest upward of $1 billion to reimagine its site with retail stores, offices and housing too.

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