Two of the Largest Commercial Projects in Orange County History Begin Construction

John Jordan | May 2020

Rendering of the new Medline Industries building

Site work has commenced on two of the largest warehouse-distribution facilities ever to be built in Orange County.

The two build-to-suit developments in Montgomery for Amazon and Medline, involve nearly 2.3 million square feet of new construction totaling nearly $200 million in investment.

Developer Bluewater Partners has commenced construction on the 1,015,740-square-foot distribution center for Amazon. The project secured final approvals from the Town of Montgomery and trees have been cleared and site work has been underway at the development that will involve the creation of approximately 1,000 jobs. The project is being built on a site that totals approximately 187 acres of land at 635 International Drive, at the intersection of Route 17K and Route 747.

The Montgomery Industrial Development Agency granted a 15-year PILOT agreement valued at $20.5 million. The warehouse is expected to create 300 construction jobs and more than 800 jobs within two years of completion.

Meanwhile, Medline Industries Inc. of Northfield, IL, has received its Final Environmental Impact Statement approval, and has secured water and sewer permits and is only awaiting site plan approval from the Town of Montgomery. Site work has commenced on the $120-million, 1.2-million-square-foot facility being developed on 118 acres on the Aden Brook Farm site.

The firm will be relocating from its current facility in Wawaynada to the larger complex. Medline will relocate its current workforce of 340 and plans to add 150 to 200 new positions in coming years. Medline has sold its Wawayanda property to Morgan Stanley.

While the two projects met some local opposition, the tremendous financial benefits both ventures will provide the Town of Montgomery, its school district and Orange County, won the day.

Maureen Halahan, president and CEO of the Orange County Partnership, said, “The fact that we have two of the largest buildings ever constructed in the history of Orange County underway during the worst economic crisis since the Great Recession gives a monumental infusion into our economy and the promise of good jobs moving forward.”

Orange County Executive Steven M. Neuhaus said that despite COVID restrictions, the two projects can begin construction. “I am in favor of construction starting at these two sites and many others in Orange County. I believe that construction workers can socially distance while doing their jobs.

He added, “Every day that goes by that people are not working is another day that is damaging our economic development and our communities,” he noted. “Tens of thousands of people in my community and throughout the state are unemployed and their families are suffering and if there is a way for us to bring them back to work in a safe manner and get them back on the payroll that should be our ultimate goal.”

Most of the construction work to be performed at the two projects will be performed by local labor. L. Todd Diorio, president of the Hudson Valley Building & Construction Trades Council, says that a host of union trades are working on the approximately $40 million worth of site work being performed at the Amazon distribution center site. He estimated that approximately 90% of the overall project work will be performed by union labor.

In terms of the Medline project, Diorio noted that site work is expected to commence at the property shortly. The contractor for the site work at both the Amazon and Medline projects is Petillo Inc., which has offices in New Jersey and Middletown, NY.

The site work and concrete work have been bid and will be performed by union tradesmen, Diorio added. He said he is hopeful that the majority of the remainder of the project will also go union.

Diorio said that each project will employ several hundred union workers.

Jesse Greenberg, public affairs director for Medline, said, “After a lot of hard work and collaboration with the town, we received our (Final) Environmental Impact Statement approval on March 30, which was a major milestone that we needed to clear and we were very happy that we did.”

He said that while the firm is currently awaiting site plan approval from the town, the firm has commenced pre-construction activities at the property, including site preparation. Allston Construction has been retained as the general contractor for the project. The project is expected to take 12 months to complete.

During the approval process, Medline pulled an application for incentives with the Montgomery Industrial Development Agency. The firm does plan to utilize the 485B program with the State of New York. The value of those incentives has been estimated at approximately $15 million over a 10 year-term.

The two projects are a sign that the industrial market in Orange County and the New York metro region will continue to be strong after the COVID-19 pandemic finally dissipates.

Bluewater Parners, which had no comment on its Amazon project, is moving forward on a number of speculative projects in the region, including a 470,000-square-foot venture in Hazelton, NJ and another 500,000-square-foot project in Central New Jersey. The firm is also building a large development for Amazon in Johnston, RI and is also developing a site in Fishkill in Dutchess County for a grocer that will involve approximately 1 million square feet of warehouse space.

John Jordan
Editor, Real Estate In-Depth