Demdaco may be just window shopping in Edgerton, but Edgerton officials are moving forward as if the company will be making a purchase.
Demdaco, a Leawood-based importer of figurines and collectibles, is shopping for a location for a 312,000 square foot distribution center and warehouse. Edgerton officials are making plans as if a location within the intermodal property will be its eventual home.
David Dillner, Edgerton City Administrator, said the Allen Group and the city would like to have everything in place just in case an Edgerton location is selected by the company.
“We’re being considered as a potential location, and what (The Allen Group) wanted to do was move forward to rezone a portion of the BNSF property,” Dillner said. “That would allow them to be in a position to move forward. There is no tenant yet, but we’re moving forward with the idea that there is.”
To that end, Edgerton officials are preparing to rezone 16 acres within the intermodal property from agricultural zoning to business park logistics zoning. They’ll conduct a public hearing on the rezoning application next month, and at a recent council work session, council members reviewed a host of zoning regulations related to the Allen Group’s rezoning request.
If the Allen Group is successful in wooing a Demdaco warehouse to Edgerton, the building will be constructed in the northeast corner of the intermodal property – somewhere along Waverly Road near U.S. 56 Highway. It’s land as far away from Edgerton city proper as is available within the intermodal property.
“It’s easier and cheaper to build a portion of Waverly south from U.S. 56 than it would be to build 191st Street or any other road,” Dillner said.
The location and improvements to Waverly Road would likely route truck and employee traffic from Interstate 35 through Gardner on U.S. 56 Highway and then south on Waverly Road to the site.
That raises a mild concern for school officials, according to Bill Miller, director of operations at USD 231. Miller told the Gardner News he didn’t know about the potential new building, but school officials would be very interested in seeing projected traffic counts at Waverly Road and 56 Highway related the new building.
“The traffic study will be of interest to us at that intersection,” Miller said. “We release 1,200 students from that point or near that point on a daily basis. We’re going to have to see the traffic impacts on a building like that.”
The city is examining ways to finance improvements to south Waverly in the event the site is selected. Specifically, Dillner said city officials would hope to pay for improvements to south Waverly using CARS money – county road improvement funds.
Johnson County has already agreed to fund improvements to 191st Street in connection with the intermodal project, however the agreement between the city of Edgerton and the county stipulates that construction on 191st Street won’t commence until BNSF issues a notice to proceed on the intermodal itself. A Demdaco building doesn’t meet that criteria.
Intermodal agreements between concerned parties also stipulate that Edgerton won’t begin its stage I infrastructure improvements until build-out is complete of more than 350,000 square feet.
Stage I improvements, which would include creating two quiet zones and the first phase of wastewater development, are estimated to cost more than $3 million. First stage wastewater improvements would not allow for a building in the northeast corner to connect to existing wastewater lines. The first wastewater improvements will service the intermodal facility itself – not warehouses. Early buildings in the intermodal logistics park will likely be serviced by holding tanks.
“The developer will have to enter into an agreement to pump wastewater, and then take it somewhere to be treated,” Dillner explained.
In addition to awaiting traffic studies and acquiring CARS funding for the site, Dillner said city officials are also conducting a financial analysis to determine if the projected revenue from a proposed Demdaco building will fund the infrastructure required to service it.
The building will receive a 75 percent tax abatement, and it’s anticipated the Allen Group would use Industrial Revenue Bonds, sponsored by the city, to pay for construction of the building.
“We would not make infrastructure improvements if the financial analysis determines there would not be enough money to pay for it,” Dillner said.
But, Dillner said, before much of the research on the potential building can be complete, Demdaco must formally make a site selection.
“Until that happens we don’t have a deal,” he said.
Demdaco officials did not return phone calls to the Gardner News, but the KC Business Journal recently reported Demdaco is investigating three options for a warehouse including a new building, an existing building or renewing its existing lease in the Paseo Industrial District in North Kansas City, Mo.
Reiderer said it’s highly likely the company is also considering new building sites in more than one location.
“Generally, as a rule, companies keep that kind of thing quiet,” Reiderer said.
“In this market, if they were only looking at one site, believe me, that would be the shock of the century.”