The OLCC approved a sales agreement for the property on Southeast 1st Avenue in a special meeting Tuesday.
Spokesman Bryant Haley confirmed to the Current that the new facility, estimated to encompass 400,000 square feet, will house the agency’s inventory, distribution and other operations as well as executive headquarters and administrative offices — essentially making Canby the new home of the OLCC. (OLCC will continue to operate some regional locations as well.)
The warehouse will nearly double the available inventory space in OLCC’s current facilities, estimated at just under 228,875. However, at an estimated 30,000 square feet, the new agency headquarters will be a smaller footprint than its current digs (52,730 sf).
Haley said this is due to the current building, which was built about 70 years ago, having “lots of unusable space.”
“The new HQ will have a more efficient design for utilizing the overall reduced space,” Haley said in an email.
To give some idea of the operations the Canby facility might see, Haley explained that the agency’s current maximum warehouse capacity is 610,609 cases. In the last calendar year (2021), OLCC received 4,897 inbound truck trips and generated 7,606 outbound trips in 262 days of operation.
The property will encompass three tax lots comprising almost 34 acres, roughly similar in size and shape to the Columbia Distributing development located across South Walnut Street.
The historic Zoar Cemetery on Walnut Street was not included in the purchase, according to a copy of the executed purchase and sale agreement provided to the Current.
The state agreed to a purchase price of $40.8 million, records show. The agreement was executed on April 11 and closing is scheduled for on or before December 15, 2022.
The choice of the Canby Baker Center property, offered by commercial real estate developer Trammell Crow, comes almost four years after the OLCC estimated its current warehouse wouldn’t have the capacity to meet future consumer demand.
That projection, which was based on annual growth rates before the pandemic, was independently confirmed in a study completed by the Deloitte consulting firm in January 2020. During the intervening period, the inventory of industrial land suitable for a sizeable warehouse has been drastically reduced, the OLCC said.
The Covid-19 pandemic has also driven changes in the commercial real estate market that have reduced the availability of large parcels of land, officials said, and increased material and labor costs associated with large-scale construction projects.
Without added capacity, the OLCC’s ability to store and supply liquor products would level off, as would revenue generated to support state programs.
“This is a great strategic plan to support local Oregon businesses,” Commissioner Kiauna Floyd said in an agency press release. “We have room to grow with this decision. Positioning OLCC to be able to provide faster and more efficient service to liquor stores in turn allows liquor stores to provide timely deliveries to Oregon’s hospitality industry.”
The Deloitte study also recommended that a new warehouse be located closer to the I-5 corridor to more efficiently distribute distilled spirits to the state’s 280 liquor stores. A site survey team had originally identified four suitable locations, only one of which — Canby — was still available.
Fortunately, it also happened to be the Commission’s top choice. Commissioner Jennifer Currin from Pendleton said the Baker Center property made sense for distribution logistics and would accommodate a larger warehouse to better facilitate consumer choice.
“It’s easy to get to and serve our customers,” said Currin. “If we’re going to continue to be able to offer the diversity of products, the amount of products, be able to get products to our customers and also make money for the state, this is going to be an investment that will truly pay off.”
The new Canby warehouse would combine inventory from and replace the two facilities it currently uses for storing product. The main OLCC currently in use would need to be seismically retrofitted to remain serviceable, and the Deloitte study confirmed that wouldn’t be cost-effective, according to the agency.
Earlier this month, the Oregon Legislature approved an increase in the OLCC’s bonding authority for the proposed warehouse because of the marketwide rise in construction costs. In 2019, the project was expected to cost $62.6 million; three years later, it has more than doubled, to $145.8 million.
The new distribution center will enable the OLCC to increase the number of products sold and distributed statewide. The sale of those increased offerings is expected to generate enough money to pay back the construction bonds in less than a year.
The warehouse will be located across Walnut Street from the 531,000-square-foot facility owned by Columbia Distributing, the largest beverage distributor in the Pacific Northwest. That warehouse, which opened in late 2020, is the company’s base for its Portland metro area distribution of beer, cider, wine and soft drinks.
Canby will also soon be home to a 517,000-square-foot Amazon sortation facility, which will be located nearby on South Township and Mulino Road.
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