*SEDA’s Board of Directors unanimously approved the agreement at the June 4 SEDA Board of Directors meeting.
Plans to develop 10 million square feet of warehouse space near Veterans Parkway could take another step forward this week as the Savannah Economic Development Authority (SEDA) considers approval of a development agreement with Rockingham Farms during its board of directors meeting Thursday, June 4.
It’s essentially the same agreement that was approved by Savannah City Council in a 7-2 vote at the Thursday, May 28, regular meeting, but with tightened language to reflect some changes requested by council-related internal auditing and reporting requirements, said SEDA President and CEO Trip Tollison.
Tollison said the authority initially started engaging in conversation with the Rockingham Farms group about a year and half ago.
“We thought there might be an opportunity to get the development agreement done by the end of last year, but the previous city council, rightfully so, said this needs to be voted on by the new folks, they’re about the take office and they need to have the opportunity to buy in and approve this,” he said.
The agreement will establish a public-private partnership that will serve to develop an interchange and extend city water/sewer service to Rockingham Farms property. The development has also been presented as a project that would create jobs and add substantial new revenue for the city.
The warehouses are estimated to create about 2,500 jobs with pay estimated at $16 to $17 per hour for a 40-hour work week, according to city documents. Rockingham Farms LLC presented pay rates of $18 per hour.
Most of the jobs would be forklift operators. The agreement calls for funding of an estimated 1,000 scholarships at Savannah Technical College for workers. The course is on one Saturday for eight hours. The city would use the payment in lieu of funds from the developer for the scholarships.
Tollison said if you look at warehouse distribution jobs on a conservative basis on average there are about 250 jobs for every one million square feet of space and on the wage side forklift operators are averaging $16 to $19 per hour, depending on the company. Those numbers tend to increase for e-commerce jobs, he said.
“To put it in perspective, Wayfair, which we announced at the end of 2018, they’re projected to hire 1,000 people over five years just for 1 million square feet,” he said.
The 1,125 acres of land will provide space for just over 10 million square feet of warehouse space. While the site will be ideal for e-commerce and logistics and warehouse distribution, Tollison said the property will provide opportunities for an array of developments.
“I could see e-commerce salivating over a park like this, I could see light assembly, light manufacturing really liking this opportunity and, of course, your standard warehouse distribution,” he said.
The agreement also calls for Rockingham Farms to guarantee repayment of the first five years of bond debt service for the $38 million in bonds that will be issued by SEDA and cosigned by the city. SEDA would take title to the land and lease it back to Rockingham.
According to city documents, assuming the 10 million square feet of warehouse space is developed within 10 years, the city would receive $119 million in incremental new revenue during the course of 20 years.
“In the meantime, the taxing authorities that are getting taxes on the property now, mostly meaning the Chatham County M & O and the School Board M & O, they will continue to get the taxes they’re getting now with a 2% escalator over the life of the 20 years, so nobody can say we’re taking taxes away from them. They’re still going to get their property taxes,” Tollison said.
“Then, after the year 20 or 21, all of the property is placed on the digest and that’ll be a huge windfall of new taxes for the city, county and the school board.”
The land, which is already zoned appropriately, is located in unincorporated Chatham County and will need to be annexed into Savannah for the deal to work. The Rockingham Farm owners are primarily requesting Savannah annexation to provide necessary water and sewer connections for the development.
“The development agreement was a very important step, but the city has to annex the property in order for us to proceed,” Tollison said.
Tollison said the interchange and water and sewer is already under design, and contracting out to build the interchange could start in the third quarter so that construction can start as soon as possible.
“It fits in line with what we’re trying to do at the Port, creates jobs and investment and, if you look at a comprehensive picture of Chatham County, this really is a fantastic site,” he said.
“It’s one of the last big tracts like this that’s already zoned, got good upland acres and will have immediate highway access, so we’re looking forward to it.”
Savannah Morning News
June 2, 2020