Warehousing firm plans $11.7M expansion near downtown

Merchandise Warehouse Co. Inc. is planning an $11.7 million expansion and renovation of its warehouse facilities just south of downtown, allowing it to add 65 employees over the next five years.

The Department of Metropolitan Development disclosed the plans Monday in a tax-abatement request that will be heard by the Metropolitan Development Commission on Wednesday.

Merchandise Warehouse, which offers multi-temperature warehousing services for the food, grocery, pharmaceutical and general commodity industries, has been in business at 1414 South West Street since 1953.

The company has a 400,000-square-foot, rail-served temperature-controlled warehouse and 250,000-square-feet of covered rail and truck-loading areas.

The expansion project would turn the covered spaces into finished buildings. It would also include the demolition of 88,000 square feet of space that would be replaced with refrigerated storage and offices. A two-story office addition on the north side of the facility also is planned.

Merchandise Warehouse said it would spend $9.8 million on the construction project and an additional $1.9 million to equip the new facilities.

The company said the project would help it retain 69 employees making an average wage of $20 per hour while adding another 65 workers at an average wage of $15 an hour by 2020.

DMD staff is recommending the company receive a eight-year abatement that would save it an estimated $902,000, or 56.5 percent, on its real property taxes over the abatement term. The business would still pay an expected $694,000 in real property taxes on the improvements during that period in addition to the $56,000 it already pays annually on the existing property.

After the abatement period, the company would pay an estimated $199,000 annually in real property taxes on the improvements.

Additionally, Merchandise Warehouse also is requesting an eight-year abatement of its personal-property taxes that would save it an estimated $766,000, or 61.6 percent, over the abatement period. It would still pay about $62,000 in personal property taxes on the new equipment during the period.

After the abatement period, it would pay an estimated $16,800 annually in personal property taxes related to the new equipment.

The MDC could give preliminary approval to the tax breaks on Wednesday and final approval on Nov. 18.