Owners typically know the kind of workforce they want, such as a highly educated workforce or a labor-intensive workforce, adds King. So another consideration for many of AM King’s clients is proximity to a community college or technical college so clients can develop relationships with nearby colleges, utilizing the synergy of an available educated and trained workforce nearby.
Honest To Goodness Savings
King has a 15-year relationship with Batavia, IL-headquartered Aldi Inc. Over that time, he and his colleagues have aided the food retailer in the site selection and construction of about 12 new regional DCs primarily for perishable and dry goods. Aldi’s business model requires situating a DC within a 50-mile radius of a major city, from which it can serve 70 to 100 Aldi retail stores. The food retailer has a very aggressive growth plan, constructing about 80 new stores annually. AM King is involved exclusively in establishing DCs for the retailer—not any of the retail stores. Today, the retailer operates 1,000 stores in 31 states from the East Coast as far west as Kansas. The goal is to establish a presence nationwide.
The newest 500,000 square-foot Aldi DC is located on a 100-acre site in South Windsor, CT, about 50 miles north of Hartford. About 20,000 square feet of that facility houses offices in a Class A office building attached to the DC. “Prior to this project, our company had been involved in conducting site analysis and due diligence required to prepare for construction,” explains King. “This time, Aldi wanted us to help them identify an appropriate site as well as perform the usual services for them.”
Although Aldi has a network of real estate directors in place to handle site selection for its retail stores, it did not have a team handling its regional distribution center site selection, notes Brian McGee, national warehouse coordinator for Aldi, Inc. “The reason for this is because we are a lean operation and everything we do is built around efficiency and productivity,” McGee says.
Probably the biggest challenge in site identification in the Hartford region has to do with the population density, McGee says. “There are limited numbers of parcels of land of the size we needed and at a cost-effective price. This is a big factor for us because, as discount grocers, we are very cautious about how we spend our money. Our goal is to sell the highest-quality products at the best price and that goal cannot be undermined by real estate market conditions.”
King and his colleagues began this project by meeting with Connecticut’s department of economic development. Throughout the project, the team worked closely with the town manager, town council, and the planning and zoning boards. “We negotiated tax incentives and the purchase price of the land on Aldi’s behalf,” he reports. “We handled all of the local approvals. The small town wanted to be certain that Aldi would be respectful of the rural area and develop the building in accordance with the site’s bucolic characteristics.”
Aldi is very particular in its desire to design and build very attractive buildings that tend to be located in pastoral settings. “They were not interested in locating in a large business park surrounded by a bunch of other industries,” explains King. This often means these sites, often farmlands, are challenged by limited access to critical infrastructures. “We often need to have utilities brought in to the site, sometimes constructing anywhere from 500 feet to a half mile to tap into a city-owned water line, for example. It’s an added cost to the owner or developer to bring in public utilities like sewage, water, and electricity. We found that it is more cost-efficient and time-efficient for us to do that work ourselves and then deed the utilities back to the public entity. This allows us to have the utilities we need in a timely fashion.”
Trucks deliver products to Aldi’s DCs, so another requirement is proximity to major interstates. Another is having a large tract of land for tractor trailer storage and being in a location where trucks can come and go throughout the day and night without violating any noise ordinances.