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DHL Supply Chain announced that construction has started on a 970,000-square-foot manufacturing, warehouse and distribution facility on the former Alcoa site in South Lebanon Township.
The building, which will create at least 200 jobs, is expected to be up and running by the end of March 2022. It will be used to optimize logistics in the northeast for an unspecified life sciences and pharmaceutical company, DHL Supply said.
The global shipping business will invest $88 million total in the project at 3100 State Drive, including a second warehouse of almost 570,000 square feet to be erected later. The tract is by Lebanon Valley Business Park.
With the e-commerce boom, Lebanon County — part of the Interstate 78/81 corridor — has increasingly become a destination for warehousing and distribution.
DHL Supply submitted land development plans for two warehouses to South Lebanon Township on Dec. 28, 2020, LebTown reported in March.
Read More: Tentative plans made for two new shipping warehouses in Lebanon
In May, Lebanon County Commissioners approved a partial five-year tax abatement request from DHL, through the Local Economic Revitalization Tax Assistance (LERTA) program, totaling more than $518,500.
Read More: County commissioners approve rehabilitation tax abatement for Myerstown businesses
According to deed records, Excel Inc., doing business as DHL Supply Chain, purchased the 100-plus-acre former Alcoa tract for $12 million from Lotus Land LLC in the first half of June.
With an early earth disturbance permit, the company was able to immediately begin the excavation process, explained Susan Eberly, president and CEO of the Lebanon Valley Economic Development Corp.
Eberly told LebTown the significant capital investment DHL Supply is making in the county will have spinoff benefits, including the employment of local contractors.
In addition to the project’s economic boost, the reuse of a blighted, brownfield site is a big positive, too, she said.
Alcoa announced almost 20 years ago that it was shuttering its aluminum foil plant in Lebanon, eliminating 240 jobs. It had been “a really nice facility that paid good wages,” Eberly said.
Then a serious fire blazed through the site in 2006.
More recently, the property was used to store tractor-trailers, Eberly said.
DHL Supply is the largest third-party logistics provider for the life sciences and health care industry in the United States, a release said. It employs about 400,000 people in more than 220 countries and territories, and it delivers more than 1.61 billion parcels annually, according to its website.
“Life sciences and health care logistics [are] complex with no margin for error given the life-sustaining and life-saving nature of the equipment and supplies moving through our supply chains,” Scott Cubbler, president of life sciences and health care at DHL Supply Chain, North America, said in the release. “Our investment in Lebanon Valley will enable our life science partner to fulfill their commitment to excellence in patient care.”
Carl DeLuca, head of real estate, Americas, for DHL Supply Chain, added: “We targeted Lebanon Valley for its workforce talent and manufacturing and distribution capabilities as an ideal location for our life science customer.”
Lebanon County has become an attractive location for large warehouses because of its proximity to major U.S. markets, Eberly said. It’s part of the 15-county I-78/81 corridor that stretches through the northeast section of the state, the Lehigh Valley and central Pennsylvania.
According to data from commercial real estate firm CBRE, the I-78/81 corridor last year recorded 11 of the nation’s 100 largest industrial leases, totaling 12.9 million square feet. That led the country, narrowly surpassing Atlanta’s 12.8 million square feet, which came from 13 leases.
A pair of LebTown stories from April also reported on two other major warehouse projects in Lebanon County.
Read More: Massive Hershey warehouse in S. Annville nearing completion
Read More: Construction of Walmart warehouse underway in Heilmandale; traffic light coming
The Hershey Co. is building a $178 million, 1 million-square-foot warehouse in South Annville Township, and the 412,000-square-foot Walmart distribution center, just off Route 72 in the village of Heilmandale, North Lebanon Township, is underway as well. Both are expected to be completed and operational by the end of 2021.
For years, Franklin County was the I-78/81 distribution hub, and now that has started to penetrate into other counties, Eberly said.
“Warehouse distribution is the wave of the future,” she said.
The jobs associated with that industry incorporate a lot more technology than they used to and are a bit more skilled, Eberly said.
The competition for employees, she said, is even producing “wage wars.”
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