A home meal delivery company plans to open a packaging and distribution center in DeKalb County that is expected to employ more than 1,200 people by 2020.
The announcement by Home Chef, a player in the burgeoning market of online meal and grocery delivery services, adds to a boom in metro Atlanta's warehousing and distribution industry. The sector has become a major jobs generator in the region.
Home Chef plans a 140,000-square-foot operations center in a leased building along Lithonia Industrial Boulevard near the city of Lithonia, according to an announcement Wednesday from Gov. Nathan Deal's office. If it builds out as planned, the project will bring a jobs boost to an area that's lagged in the choppy economic recovery.
The center will package and ship home meal kits that are part of the company’s subscription services. Home Chef is part of a sector of meal services firms such as Blue Apron and Hello Fresh that deliver in the metro Atlanta area.
“We’re undergoing tremendous growth and are excited to expand our distribution footprint,” Pat Vihtelic, Home Chef founder and CEO, said in the release. “The culture of collaboration makes Georgia the ideal location for us today and tomorrow.”
The Chicago-based company, which currently has about 500 employees, said it delivered more than 1 million meals last year. The firm recently expanded to national distribution.
The value of the incentives package to woo Home Safe was not immediately known. The company, which will spend $3.35 million on the facility, is eligible for state tax credits for new jobs created, sales tax breaks on new equipment and worker training under the state’s Quick Start program, a state economic development spokeswoman said.
The state tax credits alone could be worth $10.5 million over five years for 1,200 new jobs. The project is in an “enterprise zone,” or an area designated as in need of redevelopment, which could make the company eligible for certain property tax breaks or fee waivers.
The county's economic development arm, Decide DeKalb Development Authority, said local tax incentives are not being considered.
The Home Chef facility will be a boost for new business development around Stonecrest Mall, an area that has struggled since the financial crisis.
“We’ve been needing a shot in the arm for several years while other parts of the county have taken off running,” said Dan Kelly, president of Kelly Land Company, a large property owner in the area. “This is exactly what we need. I’m not going to say it’s time to buy a $1,000 bottle of champagne yet, but it might be time to buy that $100 bottle.”
J.P. Singh, chairman of the Stonecrest Business Alliance, said the area needs more businesses to use vacant land and structures.
“This has the potential to hopefully create a domino effect where folks will see businesses are ready to come in and occupy space here in southeast DeKalb,” said Singh, chief development officer for Duke Hospitality, a hotel management company.
The growth of distribution or fulfillment centers reflects metro Atlanta’s status as a regional transportation hub as well as growth in consumer spending and changing preferences.
Companies such as Amazon, Kroger and Williams Sonoma have established large new distribution centers here in recent years to service both online and bricks-and-mortar commerce.
The Atlanta region is the ninth-largest metro area, but fourth in industrial space, according to CBRE Research. The region also boasts ready access to ports in Savannah and Brunswick and a robust rail and interstate network.
“It’s another victory in a sector that I think Georgia and metro Atlanta are poised to do quite well in,” said Roger Tutterow, an economics professor at Kennesaw State University.
In 2015, retailers, consumer goods companies and other industrial tenants filled 17.5 million square feet of industrial space in metro Atlanta — the most in one year since the late 1990s, according to CBRE Research. Through the first two quarters of this year, more than 10 million square feet of space had been filled or absorbed, the firm said.
But developers have slowed their pace of new speculative construction to prevent overbuilding, a recent CBRE report said.
