Hy-Vee plans a KC e-commerce fulfillment center and central kitchen for its stores

Hy-Vee Inc. will begin work in south Kansas City on a $29 million e-commerce fulfillment center and central kitchen for its Kansas City-area stores.

The project, to be at 87th Street and Elmwood Avenue in the Three Trails Industrial Park, will move forward with the issuance of $17 million in industrial revenue bonds, approved Thursday by the Kansas City Council.

Hy-Vee officials said its dual-purpose operation will occupy nearly 137,000 square feet in Three Trails Building III, one of three structures built by the industrial park developer, NorthPoint Development.

The fulfillment center will support the Hy-Vee Aisles Online order and delivery program. The kitchen facility will prepare food to be distributed to the grocer’s area stores.

Hy-Vee said it expects to employ about 127 people at the outset and more than 200 eventually. The average annual wage for the jobs is expected to be about $30,000.

In its funding request to the council, Hy-Vee said it expected to invest $15.5 million in machinery and equipment and $13.5 million in real estate and tenant finishes.

According to the plan, the personal property purchased with bond proceeds will be owned by the city and leased back to Hy-Vee. The bonds will be repaid by the company.

The company also obtained a 50 percent personal property tax abatement for 10 years, worth about $838,000.

The Three Trails buildings also receive real property tax benefits through Port KC, the Port Authority of Kansas City.

City staff calculated that the Hy-Vee project would produce a net benefit for some taxing jurisdictions, including the city of Kansas City, Jackson County and the Hickman Mills School District, but not the Mid-Continent Public Library.

Three Trails Building III is the third and final building built by NorthPoint on the speculatively developed 180-acre site in south Kansas City.

Previously announced tenants for the three buildings include Boulevard Brewing Co., Commonwealth Inc., S.P. Richards Co., Rensenhouse Electric Supply, A.J. Manufacturing and Shuttlewagon.

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