Business/Economy

Amazon plans to build a sorting facility at former Sears warehouse in Anchorage

Amazon, warehouse

Amazon is turning a former Sears warehouse in Anchorage into a sorting facility.

The world’s largest e-commerce retailer will establish a “state of the art” distribution and warehouse center at 5900 Old Seward Highway, off Dowling Road, with enough parking space to handle more than 100 delivery vans, according to Amazon permit applications for the project filed with state and federal agencies.

The company plans to expand the 90,000-square-foot warehouse and parking lot, adding 125 parking stalls for workers and additional space for loading products outside a docking area and for the safe flow of vehicles, the applications show. The building was previously a Sears service center and repair site.

“This new facility will help improve Alaska’s supply chain disruptions, provide a facility for goods from outside Alaska to be efficiently distributed to Alaskan communities, and build the economy through increased employment and commerce,” according to a description of an Amazon application for water quality certification with the Alaska Department of Environmental Conservation.

Amazon is constantly exploring new locations and weighing various factors as it decides where to develop sites that best serve customers, said Eileen Hards, an Amazon public relations manager, in an emailed statement on Sunday.

“While we aren’t commenting on specific operation plans, we’re actively exploring options locally,” she said. “Our commitment to communities is to be a good neighbor, assess how we can invest, create jobs and integrate well into the region.

Amazon warehouse

Bill Popp, president of the Anchorage Economic Development Corp., said the expansion of Amazon’s footprint in Alaska highlights the “dramatic rise” in online shopping in Alaska during the pandemic, accelerating a trend that was already underway.

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“Combined with increased access to broadband services, this new distribution facility is a clear indication of just how much local consumers have increased their purchases through online services,” he said.

[The pandemic years changed shopping in Anchorage. Maybe forever.]

Amazon’s applications did not say how many jobs the center will create. Construction is scheduled to begin in the spring.

Amazon schedules about one flight daily into the Fairbanks International Airport, and about one or two flights daily into the Ted Stevens Anchorage International Airport, with products from outside the state, officials at the airports said.

A new sorting center in Anchorage will create valuable jobs, Popp said.

[Starlink begins providing high-speed satellite internet in Alaska]

“This is going to put a little more economic value from the Amazon supply chain into Anchorage,” he said.

Jobs at the Amazon facility would increase the roughly 4,500 warehouse jobs in Anchorage, which pay an average of more than $66,000 annually, he said.

Those jobs are part of a “hot” business sector — trade, transportation and utilities, he said. It’s the only Anchorage sector beating its 2019 job numbers, before the pandemic.

Employment associated with cargo handling at the Anchorage international airport, a top global cargo hub, is a key reason for that outperformance, Popp said. UPS and FedEx, two of the world’s largest shipping companies, have major global cargo operations at the Anchorage airport. They and other companies have proposed new cargo-handling facilities at the airport as global air trade has grown.

Amazon’s proposed sorting facility is located about four miles southeast of the Anchorage international airport.

Amazon’s application with the U.S. Army Corps of Engineers calls for the placement of 3,673 cubic yards of fill, such as gravel, into two acres of wetlands. The location is just east of Campbell Creek.

The application calls for Amazon to expand the parking lot, covering wetlands that are next to the existing parking lot, said Becky Manbeck, an official with the Corps’ Fairbanks office. To manage storm water drainage at the new development, subsurface pipes will be installed and storm water runoff will be filtered through “arched chambers” before it is discharged into Campbell Creek, according to the application before the Corps.

[The great mismatch: Remote jobs are in demand, but positions are drying up]

The former Sears warehouse was sold this year to Time Equities, an international real estate firm, part of a $44 million deal that also included the sales of Sears’ former property at the Midtown Mall in Anchorage. Time Equities is still listed as the building owner on city property records.

Popp said the project illustrates the global change in shopping habits.

Amazon has became an international giant as more shoppers have increased their online buying, creating challenges for brick-and-mortar competitors. Sears went bankrupt in 2018 amid speculation it couldn’t effectively adapt to digital shopping.

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“It is unfortunate the old retail models don’t work the way they used to,” Popp said. “It’s the nature of creative destruction, and e-commerce is the way many consumers get the products they need.”

Update: This article has been updated to include a statement from Amazon that arrived after it was published.

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Alex DeMarban

Alex DeMarban is a longtime Alaska journalist who covers business, the oil and gas industries and general assignments. Reach him at 907-257-4317 or alex@adn.com.

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