Massive speculative logistics development on its way to Kyle

Alliance Industrial Co., the new industrial wing of one of the Austin metro’s most active residential developers, has announced it will build the first-ever speculative project of 1 million square feet or more in the region between Austin and San Antonio.

To put that into perspective, it’s like building a footprint of more than a dozen H-E-B stores.

The Houston-based company, which launched in May of 2021, on June 7 received incentives from both the city of Kyle and Hays County that will aid with the development of Kyle/35 Logistics Park just off I-35 near the corner of Logistics Drive and South Goforth Road.

Codenamed in economic development discussions as “Project Fire Engine Red,” the development will include five state-of-the-art logistics facilities ranging in size from 140,000 square feet to 475,000 square feet. The buildings will have clear heights ranging from 36 feet to 40 feet with employee and trailer parking and a mix of single-loaded and cross-docked layouts. Buildings are designed for either single or multi-tenant use and can accommodate end users between 40,000 and 1.4 million square feet.

Officials said the project has initiated a $115 million capital investment and is estimated to bring approximately 1,500 jobs with an average pay of around $41,600.

“There was no question about our need to be in the city of Kyle,” Chad Parrish, managing director of Alliance Industrial, said in a statement. “With explosive growth and growing demand for industrial and logistics space in the region, we found ourselves perfectly aligned with the Kyle business community. We’re proud to be bringing the largest-ever speculative space to the Texas Innovation Corridor and bring much-needed infrastructure to the companies that want to be doing business in Hays County.”

Both the city of Kyle and Hays County Commissioners Court passed performance-based agreements with Yarrington Logistics Owner LP, a subsidiary of the company, during June 7 meetings. The Hays County agreement stipulates property tax abatements capped at 75% over a 10-year period, with an estimated value of $3.4 million. The Chapter 380 agreement the Kyle City Council approved includes a tax rebate of 75% for 10 years, not to exceed about $4.9 million.

“Hays County is the fastest-growing county in all of Texas for good reason,” Mark Jones, Hays County commissioner, said in a statement. “The incredible business environment found in the Texas Innovation Corridor is highly conducive for developers like Alliance Industrial Company to bring new investments online and build custom solutions for future companies. This development will create the opportunity for new quality jobs and increase major capital investment dollars to our great county.”

The relocation marks another economic boost for Kyle, located about 20 miles south of downtown Austin. It has ranked among the fastest-growing cities in the country over the past two decades, growing from 5,314 residents in 2000 to 51,789 in 2021, according to U.S. Census Bureau data.

Other large employers that have moved into the city recently include Redbird Flight Simulations Inc., manufacturer of flight simulation equipment; Plastikon Industries Inc., a plastic parts manufacturer that supplies Tesla Inc. and Toyota Motor Corp.; Simwon North America Corp., also reportedly a Tesla supplier; Amazon.com Inc., Lowe’s Cos. Inc. and ENF Technology Co. Ltd.

“This is a milestone achievement for our city and its growth,” Kyle Mayor Travis Mitchell said in a statement. “We welcome Alliance Industrial Company to Kyle as well as the future companies and job creators that will reside in their buildings.”

Back in June 2021, Phoenix-based Alliance Residential Co., the developer behind at least 11 apartment projects totaling 3,500 units in progress or on the ground in Austin, announced that it was expanding into the industrial market.

In December, Yarrington Property Owners LP filed documents for the project with the Texas Department of Licensing of Regulation, records show. The five projects totaled approximately 1.4 million square feet with a combined value of about $79 million. Construction was expected to begin in March and be completed by February 2023.

The company lists another Austin-area project on its website: a 157,450-square-foot building dubbed Corridor Commerce Center in nearby Buda.

Another major project coming soon in Kyle, headed by Kalterra Capital Partners, will be bringing more restaurants and luxury apartments to the suburb.

Courtesy of Austin Business Journal. See the full article here.