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A massive ‘merchandise logistics center’ is teed up for Westphalia. Is Amazon coming to Prince George's?

Washington Business Journal, 2019/07/01

The Prince George’s County Planning Board Thursday approved a major change to the layout of the 500-acre Westphalia Town Center, cutting back on plans for office in the core in favor of a 700,000-square-foot, 1,000-plus employee “merchandise supply center.”

The word on the street? Amazon.com Inc. (NASDAQ: AMZN) is coming.

County officials declined to comment — we're told they are under a strict non-disclosure agreement. But the contract purchaser of the Westphalia site is Duke Realty Corp. (NYSE: DRE), a logistics-focused real estate investment trust whose No. 1 client, by far, is Amazon. The description reads very much like a center that just opened in South Florida. And residents in the area, worried about truck traffic, architecture and other effects, wrote to the planning board in advance of the meeting making such a claim based on what they have heard.

Amazon has a host of logistics centers and warehouses in Greater Washington, from Sterling to Springfield to Rockville. But at 700,000-plus square feet, if this is in fact Amazon, the Westphalia center would be about five times the size of the largest existing facility, a 157,300-square-foot Whole Foods distribution center in Landover. That is according to MWPVL International, a global supply chain consulting firm that tracks Amazon’s network.

Westphalia, a master planned community of homes, office, hotel and retail immediately north of Pennsylvania Avenue and Joint Base Andrews, is an effort of Walton Westphalia Development Corp. The development plan was approved more than a decade ago, but the promised retail at its core has yet to materialize and the office may never, given the market and the lack of Metrorail access to the area — and no plans from the Washington Metropolitan Area Transit Authority to add it.

“Development of the remainder of the Town Center relies on attracting employment to the area,” Walton Westphalia wrote in its statement of justification to the planning board for the change. “In lieu of that original proposal, the Applicant presents here a unique opportunity to develop the property for an exciting user, bringing needed employment and economic development to the Westphalia Town Center Core.”

Ed Fleming, executive vice president of Walton Global Holdings Ltd., said in an email his company is looking to “capitalize on recent successes.”

“Based on the changing retail marketplace, new and emerging real estate uses, and an opportunity to partner with a best in class developer, Westphalia is moving into the next phase,” Fleming wrote. “We appreciate the relationship we have with Prince George’s County and look forward to capitalizing on this opportunity that will benefit the entire County and accelerate more retail prospects at Westphalia in the near future.”

The 70-foot-tall merchandise supply center “is envisioned to employ more than 1,000 workers” across a “functional four-story interior,” per documents filed with the county. The facility will be a “state of the art, technology-based logistics center where customer orders are fulfilled for e-commerce retailers,” employing people and “high-tech robotics.”

The Prince George’s County Council has already played its part to make this happen. On June 18, it voted unanimously to add “merchandise logistics center” to the county’s zoning ordinance, defining it as a facility “where goods or products are received and may be sorted, packed and stored for the purpose of distribution to parcel carriers or delivery directly to a customer.” The facility would also allow for ancillary retail sales, printing, assembling or “making products on demand.”

The council, which is subsidizing Westphalia with a $39.8 million tax-increment financing package for roadway and infrastructure projects, also moved to allow such a logistics center only in a “regional urban community.” There is but one in Prince George’s: Westphalia.

William Shipp, Walton Westphalia’s land use attorney, described the proposed center as a “highly technical innovative-type facility,” and not a warehouse. An attorney for Duke Realty said it would host “over 1,500 employees.” They made these comments during a council committee meeting in May.

But some Westphalia residents, reading the tea leaves, are concerned about how the facility might affect their slowly evolving neighborhood. Westphalia has largely been limited so far to single-family homes. Residents are still waiting for the grocery store and other retail they were promised ages ago, though Walton Westphalia has said in its recent quarterly earnings reports that an unnamed supermarket has committed via a signed letter of intent.

“I am emailing you out of concern about the proposed Amazon warehouses in Westphalia Town Center,” one Westphalia homeowner wrote to the planning board. “I am highly concerned about the environmental and health consequences that warehouses of this nature have on residential communities. I, along with other members of the community, do not believe bringing Amazon warehouses are in our best interest. What do we need to do collectively to stop this atrocity?”

If anything, Fleming said, the logistics center will “hasten development” of all retail uses. Under the amended conceptual site plan, the 32.3 million-square-foot Westphalia would be built out with between 200,000 and 1 million square feet of retail, up to 5.5 million square feet of commercial office and employment uses, 600 hotel rooms and 5,000 residential units.