United Natural Foods has yet to announce how many people it will employ at the grocery distribution center in Centralia, but developer Tom O’Keefe said he believes it will be more than 350. Right now, however, there may not be enough local housing for these employees.
“There is a ripple effect to people living here,” said Centralia City councilor Peter Abbarno. “When you merely work here, you may not utilize the services that you would if you live here. So we want to create a vibrant community and — if we are going to do that — we need to encourage smart residential and commercial growth.”
UNFI is set to move into the $100 million, 1.2 million square foot grocery distribution center this summer, and the company expects the facility to be fully operational in the second half of 2019. With this major grocery wholesaler coming to Centralia, is a major workforce.
O’Keefe, chief executive officer of O’Keefe Development and the developer behind this distribution center, held a private reception to reveal the tenant Wednesday, Feb. 6. While the company’s official number is 350 employees, O’Keefe said he believes the number will be “significantly higher.”
“Officially, right now, they are still pegging the number at 350 people, but they think it will be more,” said O’Keefe at the time.
Abbarno said for the city to “encourage smart residential and commercial growth,” it needs an efficient permitting process.
Abbarno originally proposed that a design guidelines modification in its municipal code be brought before Centralia City Council in 2016, which he said would make Centralia more attractive for developers. The guidelines outline a developer’s responsibilities regarding hooking up to water and sewer, storm drainage, sidewalks and curbs and other features. They are the minimum standards for construction.
Abbarno used Borst Avenue as an example of why the city should make its design guidelines more flexible. According to the city’s current design guidelines, the street would have a stormwater area and sidewalks on either side, Abbarno said. However, it won’t when it is redesigned in the next year.
“The new pathway is you just have a big sidewalk on one side of the street and not the other,” Abbarno said. “That is a modification of the design guidelines, right? That’s what I want to see more of. I want to see the ability to do that in areas that maybe aren’t downtown, but will help developers on Cooks Hill, maybe in Seminary Hill area and so many of these areas where people show interest in doing development, but say ‘Your guidelines just don’t work with the hill and the grade. Can I do something different?’ Under these guidelines, you can’t.”
The council voted against proposed modifications in 2016. In October 2018, Abbarno again proposed the city council consider modifying its design guidelines. The specific modifications would come from city of Centralia staff.
“What this would do, essentially, would be to say instead of everybody having to follow this exact process — this exact curb, gutter and sidewalk frontage — we would allow for them to approach either the city or the city council saying ‘look, this stringent guideline just doesn’t work with what we are trying to do. Can we do something different and still provide, you know, safety for pedestrians?’ But it would look a little different,” Abbarno said.
In addition, Abbarno said he believes that being open to greater annexation and doing infrastructure improvements, will encourage residential developers to pay attention to Centralia. The Centralia City Council voted in November 2018 for staff to bring proposed modified design guidelines before the city council.
“I want to send the message to investors, whether residential or commercial, that we are open for business and that we are friendly to smart residential and commercial development,” Abbarno said. “So not only will modifying design guidelines, being open to greater annexation, doing our infrastructure improvements — not only will that actually improve, I think the community — it sends the message to people outside of our community, ‘look what Centralia is doing.’ They are really trying to roll out the red carpet for our employees, for employers to come to Centralia.”
UNFI is closing three of its Pacific Northwest warehouses, located in Tacoma, Portland and Auburn. When The Chronicle contacted UNFI, a spokesperson for the company said they are still in the process of communicating with employees from those facilities. In addition to building the Centralia distribution center, UNFI will expand another in Ridgefield.
It is unclear at this time how many employees will transfer from the closing warehouses to the Centralia grocery distribution center.
“We’ll begin the hiring process in the near future and will share details at that time,” reads an emailed statement from the spokesperson in part. “We expect to begin receiving goods later this summer and shipping to customers this fall.”
The grocery distribution center is located inside the Port of Centralia’s Park I. Port of Centralia executive director Kyle Heaton said jobs in the grocery industry are typically unionized, with considerable benefits.
“I think that it’s an amazing opportunity,” Heaton said. “We were lucky that Tom O’Keefe was in place to help us realize that. I think that it is a growth opportunity. As the city moves forward now with encouraging development, new housing, new opportunities for young families — new opportunities for young families that are ready to move onto the next house — that’s how a community grows and thrives.”
Heaton said he expects the employees to live in either Lewis County or south Thurston County.
“There was a recent study done by the Thurston Economic Development Council, where they surveyed the distribution centers in northeast Lacey, and 30 percent of that workforce is coming from Lewis County,” Heaton said. “So we have the workforce that is trained in distribution, we just haven’t had the opportunities for them.”
Abbarno, however, believes most will live in south Thurston County.
“They are going to be in Rochester and Grand Mound — they are going to be maybe in Chehalis,” Abbarno said.
Scott Horner, a local real estate broker for RE/MAX KEY LAND Company, has previously spoken to Centralia City Council about the city’s current design guidelines. The requirements increase the price by $25,000 per lot, he told The Chronicle.
When asked about the number of available houses for incoming grocery distribution center employees, Horner said there aren’t any.
“They are going to be living in apartments, although apartments are really tight around here, rentals are really tight,” Horner said. “They are going to be driving in from Rochester, and Tumwater and wherever they can find a place to live.”
Horner calculated what he expects an employee at the grocery distribution center will make and the house that employee could afford. UNFI has not begun hiring for the Centralia grocery distribution center, nor has it posted jobs or indicated a specific employee salary.
However, Horner used $20 per hour as an example and calculated that that person could afford a $230,000 home. He used this example to discuss what is currently available in Lewis County. Above that price, the market improves slightly for homebuyers. Below that price, it gets worse.
“Let’s look at all the houses in Centralia, Chehalis and Adna area that are under $230,000,” Horner said. “There are 16.”
Of those 16, Horner said, two are mobile homes in a park and a handful more have been on the market for at least six months.
“These houses are for sale because they are really awful,” Horner said. “So, as far as the total universe of what this person can technically afford without coming up with a whole bunch of money for a down payment … is a universe of 16, about half of which are really undesirable houses. … They are going to live somewhere else. There’s no houses here.”
If anything, Horner said, the price of housing will increase if more homes do not become available.
“If I am out looking right now with the person who is trying to buy a $230,000 house and all of a sudden, there are 350 people trying to buy that same house, it will become a more expensive house,” Horner said.
Abbarno said he sees several main issues that contribute to city of Centralia’s lack of housing. However, the Centralia City Council still must consider the staff’s proposed changes to the design guidelines.
The recommended modifications have yet to come before the city council.
“You want them to live in the community where they work and they are not going to at this point, until we can get more inventory,” Abbarno said. “... I don’t know if people are thinking that far ahead. They should be. We are. I am at least — I most certainly am. One of the reasons why I brought up the design guidelines last year was because I want these people to be able to live here. I want them to buy homes and be vested in our community.”