Amazon halts initial operations at new Amazon fulfillment center in Detroit
A new Amazon fulfillment center in Detroit at the former State Fairgrounds that could employ 1,200 or more people is no longer scheduled to open this year as originally planned.
Construction of the massive 3.8-million-square-foot building began in late 2020, and Amazon at the time reportedly hoped that the center could open by the middle of this year so that operations would be in full swing by the 2022 holiday season.
The new building has now been up for months, but Amazon's timeline for using it has changed.
Amazon spokesman Austin Stowe told the Free Press that while "initial operations" have started in the building, Amazon is now looking to 2023 for ramping up and officially launching the fulfillment center.
The spokesman would not give reasons for the opening delay or give details on when next year the center will launch or the type of early operations that have started.
A Detroit official said Monday the city isn't worried about the postponed opening.
"Amazon could have chosen anywhere else," Nicole Sherard-Freeman, group executive of Jobs, Economy & Detroit at Work, said in a statement. "This is great for the city and we're not concerned about the delay, given the fact that the project was announced at the beginning of the pandemic. Amazon has made a tremendous investment and commitment to the city of Detroit and we look forward to the facility's opening."
Amazon has experienced slower sales growth this year and delayed the planned opening of multiple new warehouse facilities in the U.S. and outright scrapped plans for others.
In Michigan, a fulfillment center in Delta Township outside Lansing that was to open this year has been delayed until 2024, and the construction of an Amazon delivery center in Gaines Township outside Grand Rapids is on hold, the township's manager said.
In Washtenaw County, a delivery station is still planned for Pittsfield Township, although there is no available timeline for building it, and Amazon reportedly canceled plans for a warehouse in Ypsilanti Township. The online shopping giant however did open a new delivery center last week in Canton.
The new Detroit fulfillment center, located off Eight Mile at the former fairgrounds, was developed for Amazon by Detroit-based Sterling Group and Dallas-based Hillwood Investment Properties.
Sterling Group and Hillwood bought the 142-acre site from the city of Detroit for $16 million.
Amazon received no local or state tax breaks or subsidies for the fulfillment center.
A group called the State Fairgrounds Development Coalition sought to halt the 2020 sale of the city-owned land, claiming the value of the property had been undervalued in the deal and that Amazon should be required to do a Community Benefits Agreement with Detroit.
The coalition won a temporary injunction from Wayne County Circuit Court in late October 2020 halting the sale, but it was quickly reversed days later by the state Court of Appeals. The deal then went through and construction began.
In response to the coalition's lawsuit against the deal, a Detroit economic development official said in an October 2020 affidavit that the fulfillment center project was on an "extremely aggressive" construction timeline and that Amazon expected the center to be operational by mid-2022.
If the coalition's lawsuit were to delay the start of construction, the official warned, Amazon might decide to build the center somewhere else.
"Amazon requires that completion date in order for operations at the distribution center to have hit their stride in time for the 2022 peak holiday season," the official, Lucas Polcyn, deputy group executive for jobs and economic growth, wrote in the affidavit. "That deadline leaves no margin for delay to complete this $400 million project."
When the appeals court lifted the restraining order in early November 2020, Detroit Mayor Mike Duggan cheered the news and said Amazon had indicated it might even have 2,000 positions available at the new fulfillment center, up from the initially expected 1,200.
Frank Hammer, co-chair of the development coalition, said last week that Amazon is clearly lagging on the timeline that the city once claimed was crucially important.
"It is not opening in time for the holiday season," he said.
The 2020 Detroit Amazon deal also included construction of a new Detroit Department of Transportation transit center within the fairgrounds' old Dairy Cattle Building, which is to replace a nearby bus hub on Woodward Avenue. The new State Fair Transit Center is scheduled for completion by early 2024.
The fairgrounds' historic bandshell, once at risk of demolition, is being repaired and relocated to Palmer Park, near the parking lot for the Detroit Police Department's 12th Precinct. The bandshell is on track for a fall 2023 opening, according to the city.
Amazon facilities in Michigan
Five fulfillment centers
Five sorting centers
11 delivery stations
One same-day-focused delivery station
