Board partially waives local labor requirement for big warehouse project in Clay

A sign advises workers on ways to prevent the spread of the coronavirus and COVID-19, the respiratory disease it causes, at the construction site of a giant distribution center at the former Liverpool Public Golf and Country Club in Clay on March 20, 2020.

Syracuse, N.Y. -- Trammell Crow Co. says it cannot meet a requirement that it use entirely local labor to build a $350 million distribution center in Clay that many believe will be operated by Amazon.

The Onondaga County Industrial Development Agency voted unanimously on Tuesday to grant the project a waiver from the policy after the company said the project’s size and tight construction schedule has made it impossible to hire local contractors for more than 70% of the work.

“I think they’ve given it the effort,” agency member Victor Ianno said of the company. “The publicity has made people aware of this opportunity, and if they can’t fill it, they can’t be a part of it. I think we’re OK.”

Of the $350 million cost of the project, $66.6 million represents the cost of labor, according to Robert Petrovich, director of the county’s economic development office. Trammell Crow has been able to hire local contractors for $47.5 million worth of the work, which represents 70% of total labor costs, he said. Contractors from outside the area will need to be hired for the remaining 30% of the work, he said.

Dallas-based Trammell Crow began site work March 11 for the 3.8-million-square-foot distribution center at the former Liverpool Public Golf and Country Club at 7211 Morgan Road. The company has said the project will employ 300 construction workers and 1,000 people to operate it.

The industrial development agency voted Oct. 31 to approve $70.8 million in tax breaks for the project over 15 years.

Developments receiving financial assistance from the agency must agree to use local general contractors, subcontractors and labor for 100% of the construction. (Local labor is defined by the agency as workers permanently residing in Cayuga, Cortland, Herkimer, Jefferson, Madison, Oneida, Onondaga, Oswego, Tompkins and Wayne counties.)

Noncompliance with the policy can result in the revocation or recapture of all benefits provided by the agency. But the agency allows waivers for “compelling circumstances.”

Petrovich said it is not surprising that Trammell Crow cannot fully comply with the policy because not all local contractors are big enough to take on a project of this size without dedicating their entire workforces to it.

“Some folks locally have not bid on the project,” he said. “They have other existing businesses and they want to make sure that they service them.”

In addition, he said a portion of the project will require the installation of specialized robotic equipment for the movement of materials within the center.

“We don’t have that skill set readily available locally," he said.

Rendering shows what a $350 million, five-story distribution center in Clay will look like.

Ninety percent of the labor used on the project, whether local or from outside the area, will be union labor, he said.

Site work on the project stopped briefly last month after Gov. Andrew Cuomo ordered a halt to non-essential construction to slow the spread of the novel coronavirus. The work resumed this month after the state granted the project “essential” status.

Trammell Crow has said it plans to open the facility in the fall of 2021.

The developer has not announced a tenant, saying only that the center has been designed for an e-commerce company or retailer. Given the project’s size, the tenant will almost certainly be Amazon, according to logistics experts.

Distribution center near Liverpool would be 2nd biggest in world; is it Amazon?

Rick Moriarty covers business news and consumer issues. Got a tip, comment or story idea? Contact him anytime: Email | Twitter | Facebook | 315-470-3148

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