No-frills German grocery retailer Aldi is planning to establish a divisional headquarters and build a 500,000-square-foot distribution center in Dinwiddie County near one of Amazon’s fulfillment centers.
Virginia successfully competed against North Carolina for the $57 million project, which will create 145 new jobs, Gov. Terry McAuliffe’s office said Tuesday in announcing the project.
The grocer is buying 80 acres at U.S. 460 and U.S. 1 that is part of a larger parcel conceptually known as the Patton Commerce Park, said developer J. Dale Patton of Petersburg-based First Management Company LLC, which is selling the land to Aldi.
“They bought the parcel in the rear of the site,” Patton said. “We originally had it laid out for more higher residential utilization and maybe senior housing. This (Aldi project) is a higher and better use for the county, and we are very excited for Dinwiddie County and the prospects of jobs. We will be (trying to sell) the front parcels — the outparcels out front on Boydton Plank Road/Highway 1.”
“It’s up to their discretion, but I believe they are going to call it Aldi Park,” Patton said of the development.
The proposed site for the project is within a half-mile of online retail giant Amazon.com’s distribution center in Dinwiddie and about a quarter-mile from Interstate 85, said Tammie J. Collins, Dinwiddie’s deputy county administrator for planning and community development. She said Aldi plans to have the project up and operating by the end of 2017. (Amazon operates another distribution center in Chesterfield County.)
“One of the things that is welcoming and unique with Aldi is, although it’s labeled a distribution headquarters, one of the things that is very attractive to Dinwiddie County is the fact that their average wages exceeds the prevailing wages for the area. They have a track record of providing great benefits for their employees,” Collins said.
Aldi has opened seven stores in the Richmond region in the past year, and has plans for at least two more. The grocery chain is known for its low-priced store brands and relatively small store footprint. Its grocery stores are about 17,000 square feet — compared with the 45,000 square feet of the typical grocery store and the more than 100,000 square feet of mega-sized supermarkets.
Aldi has 32 stores in Virginia, and plans to open up to 60 more locations across the state in the next five years.
Nationally, Aldi operates more than 1,500 stores in 34 states. One of the fastest-growing retailers in the U.S., Aldi is in the midst of an accelerated growth plan to operate nearly 2,000 stores by the end of 2018.
“The access to qualified and capable employees and transportation options first attracted us to this location, but it was the integrity and positive attitude of the Dinwiddie County leaders that truly won us over,” Jason Hart, Aldi’s CEO, said in a statement.
Aldi is the second European grocery giant focusing on selling discounted items that will place a distribution center in Virginia. Lidl, also based in Germany, announced last year that it will put its American headquarters in Arlington County and open a distribution center in Spotsylvania County as the chain looks to open stores in the U.S.
State officials tout the region’s access to much of the U.S. population as a draw to distributors.
Supervalu, one of the nation’s largest grocery distributors, operates a warehouse in Hanover County. North Carolina-based Food Lion has operated a distribution center off U.S. 460 in Prince George County since 1983.
Harris Teeter Inc. in December announced plans to open a 1.5 million-square-foot, $200 million distribution center in Caroline County. The location is on about 190 acres near exit 104 off Interstate 95 in the Carmel Church area.
Construction is expected to begin in 2017 on the first phase of the center that is expected to employ 400 people.
Walmart has operated a grocery distribution center at U.S. 15 and Interstate 64 at the Zion Crossroads exit for more than a decade.
To secure the Aldi project, Virginia officials have made a number of incentives available to the grocer including: a $450,000 grant from the Commonwealth’s Opportunity Fund to assist Dinwiddie with the project; and $680,000 in Tobacco Region Opportunity Funds from the Virginia Tobacco Region Revitalization Commission.
The Commonwealth’s Opportunity Fund grant has to be matched dollar-for-dollar by Dinwiddie, said Virginia Economic Development Partnership spokeswoman Suzanne Clark. Grants may be used for site development, transportation access, public or private utility extension and other infrastructure items, according to the grant website.