Red Stag Fulfillment proposes $300M distribution center, 3,500 jobs in Sweetwater

Knoxville-based e-commerce company Red Stag Fulfillment has proposed a $300 million distribution center in Sweetwater.

In partnership with parent company Mollenhour Gross, which will develop the project, Red Stag has identified a 420-acre site on which to expand its storage, packaging and shipping capacities.

It has estimated the campus would create 3,500 jobs and millions of dollars in tax revenue if developed.

“If the people of Sweetwater are supportive of this project, our goal as the developer will be to waste no time, break ground this spring, and deliver Building A to Red Stag as soon as possible,” said Jordan Mollenhour, co-founder of Mollenhour Gross.

The firm is working to obtain zoning and permitting approval for the project now, dependent on community support and typical development studies and regulations. Meanwhile, Red Stag will evaluate other East Tennessee sites, but looks to start this project quickly.

"Over the coming weeks, the site will remain under evaluation by Red Stag while due diligence is conducted by the development company and while Sweetwater officials vote to approve or disapprove the plans that are presented. It is important to us that an investment of this size is complementary to and welcomed by a community and its leaders,” Mollenhour Gross co-founder Dustin Gross said in the blog post announcing the project.

In addition, Red Stag plans to complete an expansion of its Knoxville campus in June, expand its presence in Salt Lake City and open facilities in Pennsylvania and California.

At 4.5 million square feet, the Sweetwater campus would be its largest.

Proposed e-commerce site design

A rendering of the proposed e-commerce distribution center in Sweetwater, Tennessee. Red Stag Fulfillment has estimated the project, if approved, would require a $300 million investment and bring 3,500 jobs.

Red Stag revealed a preliminary concept of the land, which was assembled by combining six separate tracts. The property, located between I-75 and a ridgeline, will be accessed by a private road that intersects with State Route 322.

Mollenhour said the site was chosen for its accessibility and its potential minimal impact on traffic patterns.

Work would start with Building A at the northeast end of the property. The buildings, pre-engineered steel structures, will include office and warehouse space. The proposed design features energy-efficient insulation and engineered automatic fire suppression systems.

The company has estimated the project would increase Sweetwater's annual tax revenue by $1.9 million a year, plus an additional $3.6 million in annual taxes to Monroe County and $3.3 million to the State of Tennessee.

Those estimates are based on the current proposal, which is subject to change. The developers have not requested any tax credits or incentives yet, the blog post said.

"The actual rate of development will depend on Red Stag’s growth and capacity requirements at the Sweetwater campus," the blog post said.

Red Stag was founded in 2013 by Mollenhour and Gross after one of their businesses was struggling to find a fulfilment vendor. Red Stag ships products from furniture to pet food and electronics.

“Red Stag is part eCommerce, part logistics, part software, and part distribution center,” Eric McCollom, president since 2013, said in the blog post. “Our team is dedicated to being a model place to work and to serving our clients with excellence — the two go hand-in-hand.”

Mollenhour Gross, LLC, will develop the site for lease to Red Stag. Joseph Construction, Inc., will serve as general contractor. Johnson Architecture is the architect and Cannon & Cannon will provide civil engineering and surveying.

“A fantastic and proven team of engineers, architects, and advisors are already engaged to ensure that the site is developed responsibly and with an eye towards creating a clean, safe place for Red Stag employees,” Mollenhour said.

Source: Knoxville News Sentinel, by Brenna McDermott

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Published January 18, 2021