The 527,000-square-foot Cheshire Distribution Center in Cheshire was purchased in December by Preferred Real Estate Investments for $22.5 million, the largest sale ever recorded in the town’s history. Warehouses such as this property have been taking the place of manufacturing sites throughout the Northeast.
A historic Connecticut company is shutting its factory doors in New Haven, it announced last week. But for the state’s economy, that news was tempered by the announcements that Walgreens will build a new 700,000-square-foot distribution facility in Windsor employing 550 workers and that plastics company Polylok Inc. will expand by building a new 125,000-square-foot facility in Wallingford.
The pattern of manufacturing leaving the area or closing altogether – as is the case with the Winchester firearms factory in New Haven – is one that has been happening in New England for years, according to Tim D’Addabbo, a commercial broker with Cushman & Wakefield. But lately the closings have been diluted by the construction of distribution centers like the one Walgreens has planned for Windsor.
“Manufacturing is still seeing more firms than not leaving the Northeast and being replaced by warehousing,” D’Addabbo said.
Fifteen years ago saw factories moving to states in the South, and then Mexico became popular with manufacturers. Now, many are moving to China.
“All I know is they’re not coming here,” D’Addabbo said.
The Winchester factory, which is owned by the U.S. Repeating Arms Co., is closing because of declining firearms sales. After hearing the announcement last week, city officials and union leaders, who hope to find a buyer for the plant before it closes on March 31, began a lobbying effort, according to the Associated Press. If there is no buyer, it could be the end of nearly all commercially produced Winchesters, according to the AP.
More than 19,000 people worked at the Winchester factory during World War II. The New Haven facility was built in 1994, but the plant employs fewer than 200 now.
The rifle made at the factory was once called “The Gun That Won the West.”
“It’s part of who we are as a nation, just like it’s part of who we are as a city,” New Haven Mayor John DeStefano told the AP.
John Wayne made the Winchester rifle a signature of his movies and Chuck Connors posed with his on the poster for the television series “The Rifleman.”
“Marlin made lever-action rifles but nobody ever had a Marlin in films or TV series. They were always Winchesters,” said Ned Schwing, a firearms historian, in an interview with the AP.
‘Jobs, Jobs, Jobs’
While the announcement of the Winchester factory closure may have been unexpected, the announcement about Walgreens building the new distribution center was not a surprise. Other national companies like Lowe’s Home Improvement have built similar facilities in Connecticut. The state’s location between Boston and New York and its ready pool of labor make it a natural location for distribution centers.
Northern Connecticut is especially popular for such centers because companies can draw from labor both in Connecticut and in western Massachusetts, said Bob Daglio, a senior vice president and partner at CB Richard Ellis in Hartford.
“So you’re going to get two great labor pools to draw from,” he noted.
The HomeGoods home furnishings chain chose to build a distribution center in Bloomfield for similar reasons, Daglio said. Also, that part of Connecticut has lots of open, flat land available.
The incursion of big, new distribution centers does not, however, do much to help the state of industrial real estate.
“There’s definitely a flight to quality,” D’Addabbo said.
Big companies typically want big blocks of space that can accommodate the newest technology. Most of the space on the market is older, with low ceilings and little light.
“They’re looking for newer, cleaner, brighter,” D’Addabbo said.
So the big companies build from the ground up, because it is often cheaper than adapting existing space.
“People like Walgreens and the Lowe’s and Home Depots of the world come in with their own plan,” Daglio said.
But for companies that can use the older space that is on the market in Connecticut, good deals are waiting, D’Addabbo said. Even so, he added, he expects older inventory to remain idle in the near future.
Walgreens and Polylok are bringing new construction to the state, but will benefit the economy by employing 550 and 20 new employees, respectively. The state is loaning Polylok $1 million to help them build the facility.
“My focus is on three things: Jobs, jobs, jobs,” said Gov. M. Jodi Rell in a prepared statement. “I will continue to work tirelessly with small businesses and manufacturers to make sure their needs are addressed so they can thrive, retain jobs and grow jobs.
“[Polylok] will retain 39 full-time positions and create an additional 20 full-time positions with this loan. Economic development officials in Wilmington, N.C., tried to get Polylok to relocate there. Without Connecticut’s incentives, the owners may well have moved Polylok and its sister company, All Molded Plastics, out of state.”
Meanwhile, Walgreens will invest more than $175 million into its new facility, and is planning on 30 percent of the new hires being workers with disabilities.
“Like the distribution center we’ll open next year in Anderson, S.C., our goal for this facility is to have one-third of the workforce made up of disabled employees working side by side with other team members,” said Randy Lewis, senior vice president of distribution and logistics for Walgreens, in a prepared statement. “We’re doing this because it’s the right thing to do. Seventy percent of adults with disabilities – and 95 percent of people with autism – will never be offered a job. I believe we can, and will, make a difference for many of them.”
The Connecticut Department of Economic and Community Development, along with Windsor officials, have been working with Walgreens on the proposal for several months.
The project is being supported through an estimated $5 million in proposed incentives from the Department of Economic and Community Development: a $1.5 million loan to the company for machinery and equipment; a $2 million grant to the town of Windsor to support its business assistance program; and a $1.5 million grant to create a new customized training program. The funding requires approval from the state Bond Commission.
