USPS revving up operations in new, 1.2M-square-foot distribution hub on former Navistar site

A small section of the massive United States Postal Service distribution hub at 5505 Brookville Road. (Image courtesy of Google)

The United States Postal Service could consolidate some of its Indianapolis facilities into a new regional distribution hub opening later this year on the city’s east side.

Known as a regional processing and distribution center, the facility at the former Navistar manufacturing site, 5505 Brookville Road, occupies 1.2 million square feet and will count USPS as its sole tenant.

Indianapolis was among the first handful of cities across the country to be selected to pilot the new facility class, although complete details of the plan largely have been kept under wraps. However, the opening of the center is expected to result in the consolidation of operations at several other facilities across Marion County.

Susan Wright, a strategic communications specialist for USPS, told IBJ that “all options are being reviewed” for consolidation, but noted no additional information about the closure of Indianapolis facilities has been finalized.

The postal service’s downtown distribution facility, a 550,000-square-foot structure at 125 W. South St. directly east of Lucas Oil Stadium, is not listed as a likely casualty of the consolidation, according to public presentations and documents obtained by IBJ. Other USPS operations, such as a package sorting facility in Greenwood and two mail facilities by Indianapolis International Airport, could be shuttered. No timeline has been given.

Wright said the Brookville Road facility, developed by Indianapolis-based Ambrose Property Group on the 88-acre site as part of a long-term lease agreement with USPS, is one of 60 regional processing and distribution centers expected to open across the United States in coming years.

“These new [facilities] will allow USPS to better use resources—including space, staffing, processing equipment and transportation—to take advantage of state-of-the-art technologies that process mail and packages more efficiently, while also creating brighter, cleaner, and more modern workplaces for postal employees,” she said in a written response to emailed questions from IBJ about the new facility.

“Most importantly, the [centers] are part of our growth strategy. We will be able to offer a wider range of products and solutions to our customers by having much greater reach and capabilities,” she said.

Ambrose did not disclose the cost of the building or terms of the lease, but a separate internal document from USPS shows the government allocated $149.9 million for the buildout and launch of the new facility.

Ambrose acquired the Navistar property in mid-July 2020 for $8.2 million, with initial plans to spend up to $75 million on its redevelopment. Ambrose received a five-year tax abatement for the project from the city’s Metropolitan Development Commission that will save the company nearly $2 million in new property taxes over the life of the abatement.

Initial plans for the project, known as Indianapolis Central Logistics Park, called for a single building of 616,000 square feet that could be expanded to the current size—1.2 million square feet—based on client needs.

Within the first few months of advertising the site in 2022, Ambrose received interest from at least five strongly interested parties, including USPS. Eric Seamands, senior development manager for Ambrose, told IBJ that all of the companies that showed interest indicated a preference for a larger building than the 616,000-square-foot proposal, leading the firm to green-light expansion shortly after beginning construction,

He said the buildout of the structure wrapped up earlier this year, and it is now occupied by USPS, which began hosting job fairs for the facility in March with plans to hire as many as 300 workers. 

“We’ve turned the building over to the Postal Service, and they’re operating out of half of the building, and they’re currently still working on the other half of the building with the material handling and equipment installation,” Seamands said. “It’s my understanding they’re targeting to be fully operational by the end of this year.”

According to a letter sent by Postmaster General Louis DeJoy to Sen. Gary Peters, chairman of the Homeland Security and Government Affairs Committee, the Indianapolis facility is now partially operational for package sorting, “with increasing functionality and volume through the end of 2024.”

When asked about the anticipated staff needs and a full opening date for the facility, USPS spokeswoman Wright said she did not have any additional information to share.

Before construction on the USPS project began, the site had been vacant since 2015, when Illinois-based Navistar International Corp. closed its foundry operations there.

For most of its 70-year-plus history, the local Navistar plant operated under the name International Harvester and built a range of products, from farm implements to refrigerators. In its later years, it made only diesel engines—a booming business before the Great Recession set in.

Former owner Cleveland-based Park Corp., which acquired the property from Navistar in 2016, demolished that plant in 2018 after efforts to lease the existing structures were unsuccessful.