SELLERSBURG — Almost 1 million square feet of industrial warehouse space is likely coming to Sellersburg on a development site that rivals River Ridge Commerce Center.
NAI Fortis Group president Jon Seiz, developing with New York-based real estate investment management firm Clarion Partners, announced plans during the Sellersburg Town Council meeting Monday night to bring two Class-A type industrial facilities to the 77-acre property bordered by Butler Road and U.S. 31.
"This particular property in Sellersburg offers a unique opportunity because it capitalizes on all of the positive momentum that’s taking place generally in Southern Indiana, but the fact in our view that it’s separate from River Ridge and has great proximity to Interstate 65 is a really compelling differentiator," Seiz told the council.
To make the land more attractive to potential tenants of the buildings — none that have been identified — the council preliminarily adopted a resolution designating the property as an economic revitalization area.
Under state law, an economic revitalization area, or ERA, is "an area ... which has become undesirable for, or impossible of, normal development and occupancy because of a lack of development, cessation of growth, deterioration of improvements ..."
Paul Wheatley, president of The Wheatley Group and consultant to the Sellersburg Redevelopment Commission, said an ERA must be established before a company or developer can receive a tax abatement.
The town council will conduct a public hearing during its Dec. 28 meeting on establishing the ERA to allow residents to voice their opinions before taking a final vote. Wheatley said he expects to present a tax abatement request at the same meeting that would save developers $1.2 million over 10 years on real property.
Council President Paul Rhodes said he's in favor of establishing an ERA for the property "because we have not been able to do anything else with it."
The property owner purchased the land about a decade ago, broke ground but never developed it, Rhodes said.
"[The ERA] provides us with the tool to attract business," Rhodes said.
The property is also within the town's only tax increment financing district and would generate $4.8 million in revenue over the 19-year life of the TIF district, Wheatley said. That extra money will help the town fund some "ancillary infrastructure projects" it hasn't had the money for, he said.
"This site has been a competitor to River Ridge, and now that the River Ridge land sale prices are starting to increase a little bit, it's really put this site in a competitive position," Wheatley said.
Clarion Partners has more than $35 billion in investments in projects similar to the one proposed in Sellersburg. The company owns 4 million square feet of space in the Louisville area, Seiz said.
"As they have watched the Southern Indiana submarket of individual properties grow, they've had an interest in exploring development opportunities over here," he said.
The development, which has not been named, would include two speculative buildings — 659,000 and 415,00 square feet each.
"They want to build an asset here and market that to their potential clients," Wheatley said.
Tenants that Clarion Partners has worked with before include General Mills, FedEx, UPS, Kraft and General Electric. When developed, the companies will be investing $45 million into the project.
Seiz said plenty of new products are entering the local market.
"We're not afraid of that at all," he said of building without tenants. "There is enough activity in the market."
Seiz said they hope to break ground on the property early next summer. Unless a specific user comes along, developers likely won't build everything at once.
The project would be split into three phases — the first two comprising the larger facility and the third phase being the smaller building.
A proposed site plan show an exit and entrance into the development from U.S. 31.
"Our goal is to do everything we can to facility a smooth ingress and egress to the park," he said.
The site will service both cars and trucks.
The plan also shows a landscaping buffer along Butler Road, which is a private road bordered by residential property.
"It's our expectation that we'll have adequate noise and light buffering from the residential area," Seiz said.
Councilman Terry Langford asked when the Indiana Department of Transportation would add turning lanes on U.S. 31 in front of the development. Seiz said engineers are scheduling initial meetings with INDOT to discuss these possible changes and added that developers likely will be asked to order a traffic study.
One resident at the meeting asked if developers thought about putting an entrance or exit from Butler Road. Rhodes added that the property seems to be an "escape route" for residents when U.S. 31 is flooded.
"I would say as a rule, ordinarily, we wouldn't necessarily invite automobile traffic from offsite, only because there is a certain amount of liability with someone who may not be familiar with truck movement and that kind of stuff," Seiz responded, adding he'd be willing to engage in dialogue on the matter.
The plan shows two detention ponds on the U.S. 31 side of the property.
Developers entered into a contract with the property owner last month to buy the land. Seiz would not divulge what the proposed sale price is.