Moratoriums on Warehouse Construction being Enacted across the US

The latest trend in US warehouse space: not in my backyard.

Supply Chain Digest Says...   But even if the development goes forward, the resistance has forced Chesapeake to modify its original plans. What do you say? Click here to send us your comments   Click here to see reader feedback

In recent years, developers have put up warehouses at a frantic pace, led by an incredible multi-year build out of fulfillment centers, sortation centers and delivery stations by Amazon, now operator of more than 1200 US logistics facilities of all types, according to consulting firm MWPVL International, which tracks Amazon’s network.

In general, communities have been happy for companies to open warehouses in their towns, with the largest operations often bringing in more than 1000 jobs and adding to the overall tax base.

But things are changing. Communities and individual citizens are starting to say “That’s enough.”

For example, according to a recent story in the Wall Street Journal, a coalition of residents is fighting a proposed warehouse in Harford County, MD., amid concerns about its impact on the nearby water supply and wildlife.

Another group of residents recently sent a letter to California Gov. Gavin Newsom asking him put a regional moratorium in place for warehouse construction pending further study of the health and environmental impacts of these facilities.

Another area of pushback has to do with costs. Of course, most new warehouses receive significant tax breaks from the cities and states they are built in.

In the Harford County, MD area cited above, the citizens group is also protesting a plan to build a new road, at taxpayers’ expense, needed to alleviate traffic around a new warehouse.

In Perryman, MD, a citizens group has raised $100,000 to fight another proposed warehouse complex nearby, which would encompass 5.2 million square feet across five buildings. In 2022, the group filed a lawsuit to block the project, which is pending in court.

“We have rural roads with no shoulder, no sidewalks that all this traffic and trucks would have to go down,” said Paul Fallace, one of the group’s 20 members, told the Wall Street Journal.

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Chesapeake Real Estate Group, the warehouse’s developer, has filed a motion to dismiss the lawsuit and plans to go ahead with the project.

But even if the development goes forward, the resistance has forced Chesapeake to modify its original plans. According to the Journal, the company has made several commitments to mitigate the impact to the local community, such as leaving 43% of the 700-acre property undeveloped, building an access road for local traffic, and planting trees on the 200-foot setback between the site and abutting residential properties.

All told, elected officials from southern California to the Cleveland suburbs to Bloomingdale, GA., have passed moratoriums on new warehouse construction, according to the Journal.

Some developers are moving construction away from areas of local resistance. For example, Prologis, the world’s largest logistics developer, recently noted that that a shortage of developable land in California combined with local opposition to warehouse construction in many areas would likely result in industrial development shifting from the Golden state to Texas.

Any reaction to the resistance to new DCs? Let us know your thoughts at the Feedback section below.