Global delivery giant Amazon will be the tenant in a planned new “last-mile” distribution centre on Victoria Airport Authority lands scheduled to be operating in fall 2022.
Work on the site is to begin in September. A $65-million, 115,000 square-foot sorting centre is going up. It will be topped by another 115,000 square feet to be used for parking, bringing the structure’s total size to 230,000 square feet.
It will be somewhat smaller than the Thrifty Foods warehouse, also on airport lands, at 250,000 square feet. The downtown Victoria Bay Centre is larger at about 400,000 square feet.
Area residents raised concerns this year about the project’s height, size, design and possible traffic impacts after Edmonton-based York Realty unveiled plans for a larger building on 7.8 acres bordered by Beacon Avenue and McDonald Park and Galaran roads.
Its size and height have been scaled back. It will now stand 11 metres on the Galaran Road side and close to 20 metres on the McDonald Park side.
Tushar Kumar, regional director for last-mile logistics operations for Amazon Canada, said: “We are excited to continue our growth in Canada with the addition of the delivery station in Sidney,” adding that the centre will allow for fast delivery and will create jobs.
York will be work with the W̱SÁNEĆ Leadership Council and the Tseycum, Tsartlip, and Tsawout First Nations to incorporate design and art into the building’s exterior, along with landscaping reflecting First Nations culture and heritage.
A roundabout is planned at Galaran Road and Becon Avenue, along with other possible road improvements. Rod Hunchak, airport director of business development, expects detailed designs will be drawn up next year, with construction beginning in 2023.
At the centre, vehicle traffic has been staggered to reduce impact on local roads. Trailer-trucks will drop off goods after 10 p.m. Packages will be sorted overnight and loaded into about 150 delivery vans which will start leaving at 9:15 a.m. Vans will return about 7 p.m.
Trailer-trucks will enter and leave off McDonald Park Road, Hunchak said Wednesday.
The length and value of lease with York is confidential, he said.
Matt Woolsey, York Realty president said: “It is our hope that, with Amazon as a sub-tenant, the new delivery station will serve as a significant economic generator for the region.”
Geoff Dickson, airport authority chief executive, said: “We would like to thank York Realty and Amazon for the vision they have shown in choosing this location with a goal to meet the growing demands of the region.”
Sidney council did not have regulatory approval rights over the project. The airport authority leases its lands from the federal government and has jurisdiction over such developments. Even so, council heard from more than 40 residents and made recommendations to the airport authority.
Sidney Mayor Cliff McNeil-Smith said: “This will be a significant construction project in the region, with major investment and employment during construction, and significant long-term employment and economic spin-offs.”
He welcomed the “long-needed” upcoming roundabout.
The new building aligns with land use guidelines set out by Sidney and the airport, McNeil-Smith said. “Given the significant transportation hub on the north end of the Saanich Peninsula, a delivery station is a very suitable use on the previously undeveloped site,” he said.
Vancouver retail analyst David Ian Gray, founder of DIG360 Consulting, said the centre reflects today’s retail sector as it focuses on logistics and moving products quickly through the supply chain.
The centre will distribute products throughout Vancouver Island, he said.
He expects that the Island will see additional distribution centres.
“Just keep an eye out for the next one,” Gray said. “And you’re going to get a lot of land speculation,” he added, noting that has happened elsewhere in Canada.
Businesses will want distribution hubs closer to markets, Gray said.
Although Amazon is mainly a direct-to-customer service, other companies might want such centres to stock products and bolster their supply chains, Gray said.
He does not expect Vancouver Island couriers will be hurt by Amazon’s arrival because some customers buy online while others do not.
Amazon is not necessarily creating a demand but instead improving its own efficiency, he said.
However, it may see the new centre as a way to break into the market for perishable food items on the Island, he said. It can be a challenge to move fresh produce and frozen food quickly to customers.
Al Hasham, president and chief executive of Victoria’s Maximum Express Courier, Freight and Logistics, does not believe the company will be affected by Amazon. “I’m not going to lose any sleep over it,” Hasham said.
Maximum concentrates on serving local businesses and supporting the community, and offers favourable wages and benefits to employees, he said.
The company, which also has a branch on the Lower Mainland, is already doing some Amazon deliveries through other parties, he said.
Jeff Bray, executive director of the Downtown Victoria Business Association, said: “I think people have been great at understanding the power of shopping location.”
A large number of customers are drawn to shopping in a place such as downtown, where many unique, independent, medium-sized businesses sell products unavailable elsewhere, he said.
