Amid Rising Anger, Completed Amazon Warehouse In Philly Sits Empty As Company Goes Quiet
Amazon's voracious appetite for warehouse space in the first two years of the pandemic may have cost Philly-area taxpayers millions of dollars.
Now that it appears to have overeaten, those taxpayers' representatives are furious.
The e-commerce giant purchased a 29-acre plot of land at 6901 Elmwood Ave. in Southwest Philadelphia for $9.6M last year, and quickly built a 140K SF last-mile distribution center at the site. Months after completion, Amazon has yet to start any operations at the site, hire any workers or set a schedule for doing so, the Philadelphia Inquirer reports.
The Southeastern Pennsylvania Transportation Authority had targeted the plot, once home to a General Electric factory, for acquisition to build a trolley barn that would kick-start a modernization program for the agency's fleet of streetcars.
After 10 years of planning and negotiating produced a $5.7M bid from SEPTA, Amazon's higher bid of $9.6M was chosen with support from local elected officials including Pennsylvania Sen. Anthony Hardy Williams, the Inquirer reports.
Forced to pivot from the Elmwood Avenue site, SEPTA approved nearly $22M to purchase a former steel fabrication plant less than 2 miles northeast at 5100 Grays Ave. for the trolley barn. Though it does include a building that figures into an adaptive reuse plan, the purchase would cost nearly four times what the agency had initially budgeted for the acquisition portion of the trolley modernization plan.
The Elmwood Avenue facility is one of at least 66 affected by Amazon's pullback on industrial space this year, and it fits the type that has been most likely to be scuttled: It is a smaller, urban facility within a market where Amazon already has a heavy presence, and simply canceling or delaying plans to open is less complicated than winding down operations, laying off workers and rerouting established supply chains.
Part of Williams' reasoning for pushing Amazon's bid through over SEPTA's was the idea that a private employer would produce more tax revenue from the site and have higher-paying jobs. But the company abruptly stopped communicating earlier this year as it reported quarterly losses and decelerated its industrial expansion plans all over the country, Williams told the Inquirer.
"[Amazon going quiet] is the worst thing," Williams said, adding that he now wishes he had supported SEPTA's bid. "It is really, really, really insulting. I can tell you that they have hit a big boulder here in Philadelphia.”
Amazon still plans to operate the warehouse it built, but has not set a timeline for doing so, a company spokesperson told the Inquirer. A separate Amazon facility in the Montgomery County suburb of East Norriton also lies completed but unused as of Sept. 27, the Inquirer reports.
The purchase of land, rather than a lease, was part of a strategic pivot Amazon began last year and has accelerated this year in places where it is still in growth mode. As it seeks to sublease millions of square feet within its portfolio, Amazon may yet look to add the Southwest Philly property to a growing list of surprise availabilities in the industrial sector.
