Central Massachusetts Town Clears A Path For New England's First Multi-Story Warehouse

A small central Massachusetts town has paved the way for New England’s first ground-up, multi-story warehouse, taking a big step toward embracing the project expected to be a high-tech Amazon structure.

Residents at Charlton’s town meeting Monday applauded after their 119-19 vote to approve a zoning update to allow a structure of up to 110 feet, clearing the way for developers Bluewater Property Group and Bay Colony Property to seek special permits despite the board of selectmen and planning board's recommendations against approval.

Developers hinted at Amazon being the project's end user, which will be revealed during the upcoming planning process.

The sleepy community of approximately 13,000 residents 54 miles west of Boston embraced the potential tax revenue boost and dismissed traffic concerns that have brewed opposition for e-commerce tenants among Boston’s larger inner suburbs.

The proposal calls for a 2.8M SF, four-story warehouse on a footprint of 635K SF at what is today vacant land at 53 Sturbridge Road. The project, which, according to researchers, could be the first multi-story warehouse north of New York City, would cost up to $400M and bring up to $2.4M in tax revenue, or an 8% increase to Charlton's annual budget of approximately $29M. The location along U.S. Route 20 also sits between key East Coast arteries like Interstate 84, I-90 and I-395.

“I would just ask everybody to take a look at Route 20 coming in from the Sturbridge line and look at the empty or abandoned buildings that litter Route 20,” Charlton Fire Chief and longtime resident Edward Knopf told the audience Monday in the Charlton Middle School auditorium. “The gas station, the mill, they’re all there. And it’s wasted. It’s time for this town to act.”

The Charlton Planning Board earlier this month declined to endorse the Article 17 zoning update, citing concerns over the height among the town’s wooded roadways. The Charlton Board of Selectmen also recommended against Article 17, citing hesitancy over the unnamed tenant. Members of both boards acknowledged during Monday's town meeting it was the decision of the residents.

“This is just basically opening the gateway to create the good optics for Charlton as a welcoming town with open-minded people,” Charlton Selectwoman Barbara Zurawski said of the project.

A lawyer representing the developers gave a rousing speech before the zoning vote, explaining the details of the project and drawing laughs when tiptoeing around the identity of the end user, telling the town he assumed the end user “has been in your home in the last week.” Developers claim tax revenue will be threefold what a single-story warehouse could produce, produce four times the amount of construction jobs and more than 1,000 employees.

“By approving Article 17, you jump-start development by showing that Charlton welcomes this type of new development that goes up instead of out in some fashion,” attorney Mark Donahue of Fletcher Tilton PC said. “And to distinguish yourself, essentially, from other communities.”

Some of those other communities have soured on the e-commerce warehouses proposed and developed within their towns. Amazon in 2019 rescinded its move for a Braintree warehouse 13 miles south of Boston as businesses appealed Amazon's special permit, citing traffic concerns. Other neighboring towns have complained of traffic, and a state agency in February published a 64-page report citing the impacts of e-commerce in Massachusetts, targeting Amazon’s massive footprint.

Developers say tractor-trailer traffic would arrive and depart from I-84 to the west of the site, preventing trucks from clogging roads through downtown Charlton’s business corridor. Bluewater and Bay Colony in a letter to the board of selectmen cited a transportation study for neighboring projects, estimating the addition of approximately 3,000 trips per day on Route 20 capable of handling 55,000 trips per day. Residents chatted about the traffic concerns after the meeting but were largely unconcerned until further planning board and town presentations.

Earlier this month, residents of the larger Needham suburb 20 miles west of Boston voted to rezone properties along Route 128, preemptively blocking a potential warehouse from being built at the inner suburban location. The site had received interest from Amazon and other warehouse users.

A multi-story warehouse wasn’t floated at either of those locations, and the 110-foot warehouse would be one of just a few tall industrial structures across the nation. Boston’s tight industrial market still has room for new single-story, ground-up developments, prompting some surprises among experts when asked by Bisnow about the vertical project. 

JLL Director of Capital Markets Michael Restivo said his firm has explored potential multi-story warehouses in and around Boston, but the cost of construction doesn’t justify the asset.

“Boston and most of its urban core, a lot of the sites are better suited for multifamily or life sciences,” Restivo said. “Your highest and best use is going to be life sciences.”

Charlton is ideal for its ease of access to major highways and its smaller population, which has already proven easier to work with, Colliers research analyst Dion Sorrentino said.

Also noteworthy is the proprietary stacking software mentioned by developers, a possible clue pointing toward Amazon technology. The e-commerce giant is slated this year to open a 35K SF Amazon Robotics Innovation Hub 23 miles away in Westborough. 

“From what we’re hearing on our end, this is Amazon’s first foray into something like this,” Sorrentino said. “... Massachusetts is the hub for the Amazon Robotics division. It makes sense that their first look into a large-scale, multi-story warehouse like this might be tied to something like that.”

Amazon through a spokesperson declined to comment on the project, citing a policy of not commenting on its future road map. Bluewater and Bay Colony Property didn’t respond to requests for comment.

Since Prologis built the nation’s first multi-story warehouse in Seattle in 2018, just a few more have been developed. The asset type is more abundant in Asia and other dense urban areas where land has dried up, Hunneman Director of Research Tucker White said.

“That’s not the case yet in Boston,” White said. “There’s still plenty of land yet to be developed. Not every tenant in the world’s going to be an Amazon that can really support that build. In my opinion, this is an outlier.”

Farther south, a 12-story cold storage warehouse is being built in Plainville, Connecticut, south of Hartford. The 250K SF warehouse, developed by Stop & Shop parent Ahold Delhaize USA, will be used as frozen food storage for the New England grocery chain. While even higher than the proposed Charlton warehouse at 140 feet tall, the warehouse requires different storage and racking requirements, making it hard to compare to a multi-story e-commerce warehouse, Sorrentino said.

Developers of the 53 Sturbridge project will now have to submit a filing with the Massachusetts Environmental Policy Act Office and a site plan application for a special permit, which they expect to file next month. The identity of the end user will be confirmed as the project moves forward, Donahue told Charlton residents Monday.

Residents sounded cautiously optimistic after the meeting, also assured by town officials and Donahue that Monday’s vote was not an approval of the project but simply the zoning letting the developers apply for a special permit.

“We’ve got to let the experts look at the project in its entirety and tell us whether or not it’s a viable project,” Knopf said. “And that’s all I wanted to do.”