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CVG, developer celebrate Wayfair project

Posted: 1:57 PM, Oct 14, 2015
Updated: 2015-10-14 13:57:52-04

ERLANGER, Ky. – Online retailer Wayfair Inc. will add upward of 250 jobs in Northern Kentucky starting in early 2016 as construction continues on its new 900,000-square-foot distribution facility at the Cincinnati/Northern Kentucky International Airport.

The development, first announced in August , got its official christening during a groundbreaking ceremony Tuesday. Site work started this summer, and the facility, known as LogistiCenterSM at 275, should be complete by the second quarter of 2016.

While the ceremonies served as a reunion of sorts for a slew of partners involved in the project, CVG quietly took center stage. Earlier this year, the airport leased the 52-acre site to Dermody Properties, an industrial developer based in Reno, Nevada, which will act as Wayfair's landlord, and Hillwood Investment Properties, its financial partner, for a 49-year, 11-month term. It marked the first speculative development in CVG's history – and likely not its last.

CVG owns and maintains 7,500 total acres. While most of that land is used for airport operations, at least eight parcels and roughly 600 acres were recently identified for near-term development, including 167 acres that the City of Florence is considering annexing to provide water and sewer. CVG officials say more is available.

"About four or five years ago, we sat down and determined that land development was essential in order to diversify our revenues and that it was necessary for the future success of CVG," Candace McGraw, airport CEO, said. "There were some naysayers along the way; they told us this wasn't the way to go, we wouldn't have long-term development. I'm so very pleased to be here today to prove them wrong."

Wayfair will ramp up hiring over the next couple years and expects to top out around 200 to 250. The new facility, which will handle a bulk of the company's small package shipping, will be staffed with 75-100 employees initially, officials said.

LogistiCenterSM will complement Wayfair's existing Northern Kentucky operations, a 525,000-square-foot fulfillment center in neighboring Hebron, where another 200 are employed. The retailer has a multi-year lease there but has reached capacity.

"Wayfair is well on its way to becoming the world's largest retailer of home furnishings and décor. We firmly believe that Northern Kentucky is the optimal location…to support the rapid growth of our business," Nick Malone, chief administrative officer at Wayfair, said. "We are pleased to expand our footprint in the region."

Work at the site, located at 1600 Donaldson Pike in Erlanger, has progressed rapidly. Dermody officials say utilities are nearly complete, floor slabs are 25 percent complete and the construction team is starting to form the exterior walls. While this is Dermody's third project in the Commonwealth of Kentucky, it marks a first in the Northern Kentucky area.

And at 898,560 square feet exact, or the equivalent of 15 football fields, it's the largest single development by square footage in Dermody's 55-year history.

"We scoured the market and looked at multiple sites," said Greg Arnold, partner, Dermody Properties, who led the site selection search. "When we heard (CVG) was going to offer land for lease, we knew this was going to be a success. We applaud your vision."

Additionally, parties from Cushman & Wakefield, formerly DTZ, which served as the tenant broker representing Wayfair; and Paul Hemmer Company, the project's general contractor, were recognized, among others.

Wayfair officials say they'll start their own build-out inside the building around February or March. They plan to start stocking inventory in mid-April.

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Follow Liz Engel on Twitter: @_LizEngel