UPDATE: Town's Rejection Puts $100M Project in Jeopardy

John Jordan | May 2018

Medline Facility in Middletown , NY

MIDDLETOWN—A rebuff by the Town Board of Hamptonburgh has Orange County political leaders and economic development officials scrambling to save a mega-warehouse project valued at $100 million.

Medline, a health care distribution company based in Middletown, had hoped to build a 1.2-million-square-foot warehouse project in the Town of Hamptonburgh. However, members of the Town Board of Hamptonburgh on Monday May 7th rejected the project by refusing to vote to begin the environmental review process on the proposal. Supervisor Bob Jankowski’s motion was not seconded by any Town Board member, which all but killed the project there.

Orange County Partnership President and CEO Maureen Halahan said that while disappointed with the action by the Hamptonburgh Town Board, the partnership is in discussions with Medline on two possible alternative sites in Orange County. Halahan did not divulge to Real Estate In-Depth the locations currently being studied by Medline.

Tom Fallon, director of operations for Medline’s Wawayanda facility, said in a statement, “Medline has a proud and long-standing history as a member of the Orange County community. We live here, we work here, our children go to school in Hamptonburgh, Wawayanda and across the county. We are grateful to all our friends and neighbors who have supported our efforts to continue to grow and provide jobs and opportunities for our team members and their families.”

He continued, “We are disappointed that we won’t be expanding into Hamptonburgh at this time, but will continue to explore site options in the tri-state area that support our strong growth and provide our team members with even greater opportunities. Medline has a 52-year history of consecutive growth that has rewarded our employees and the communities in which we live and work, and we are optimistic about bringing that momentum to other communities in the future.”

Orange County Executive Steve Neuhaus said of the rejection of the project by Hamptonburgh, “Medline’s a great company and we look forward to working to keep them in Orange County. Hamptonburgh may not have been the ideal location for the project, but we have great spaces in Chester, Wallkill, Newburgh and elsewhere.”

The Orange County Partnership’s Halahan said, “This was a loss on so many levels. Medline has over 300 jobs, the town of Hamptonburgh stood to gain tax ratables and the Valley Central School District, which is currently cutting jobs, stood to secure financial benefits that could have saved (some of those jobs) for the district.”

She said the Medline project is a high-priority project for the Orange County Partnership and noted that although the company is now considering two other sites in the county, the Hamptonburgh property was its first choice. While Halahan is hopeful that the firm will remain in Orange County, she said it was “a monumental turn down” for a “monumental project.”

Prior to Hamptonburgh’s rejection of the proposal, officials with Medline, which is headquartered in Northfield, IL, held a press briefing on May 3 at its offices in Middletown to detail its plan to vacate its 500,000-square-foot medical supplies distribution facility on Route 6 here and relocate to a 1.2-million-square-foot healthcare distribution and logistics facility to be built on almost 361 acres in the Town of Hamptonburgh on a site now called Hudson Valley Crossing II.

Medline said at the session it planned to ask the Hamptonburgh Town Board on May 7 to move the approval process forward so that it can begin work on a Draft Environmental Impact Statement for the project. Company officials told reporters that the project would require a zone change for it to proceed. Medline plans to acquire the 361-acre site from Green Acres Development Group.

Zvi Segal, managing partner of Green Acres Development Group, had a plan to build as many as seven buildings and 2.3 million square feet of commercial space on the property that is located adjacent to the existing Hudson Valley Crossing I complex. Green Acres recently amended that plan and proposed in March two commercial buildings totaling 1.6 million square feet of space. The latest plan announced on May 3rd calls for one building specifically for Medline totaling 1.2 million square feet.

Josh Sommers, a spokesman for Green Acres Development Group, said the property is currently zoned for residential use and has approvals for 293 residential units. If the project was approved, Medline promised to retain its current 300-member workforce and likely add between 200 to 300 workers in the future.

Fallon, director of operations of the Medline facility in Middletown, said the company hopes to remain in Orange County and move to the new Hamptonburgh facility by 2020. He noted that Medline has sold its Middletown facility and is currently leasing its space there. The company is hopeful to secure municipal approvals and acquire the 361 acres from Green Acres Development to build its new complex there.

He said the reason for the move was because the company has simply outgrown its Middletown facility.

Fallon related the new facility would be built to LEED standards on just 93.2 acres and stressed that more than 268 acres would remain green.

Medline, which has a worldwide workforce of approximately 18,000 employees, has operated out of the complex at 3301 Route 6 since 2009 and has been doing business in Middletown since the mid 1990s.

Fallon, a native of Orange County and a graduate of Monroe-Woodbury High School, said that remaining in Orange County is the company’s “first choice,” but that it is also keeping “all its options open” and is looking at possible alternative locations in Pennsylvania, New Jersey, as well as other locations in New York State.

At the press conference, both Fallon and Sommers reviewed the merits of the project and what they termed as low noise and traffic impacts. Orange County Executive Neuhaus and the Orange County Partnership’s Halahan also expressed their support for Medline’s expansion proposal, with Neuhaus particularly praising the significant amount of land that would be preserved as green by Medline if approvals were secured.

Medline is the largest privately held manufacturer and distributor of more than 500,000 medical supply products. The company operates approximately 40 distribution centers totaling 12 million square feet of warehousing space.

 

 

John Jordan
Editor, Real Estate In-Depth