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15-acre, $25 million complex will serve as distribution center for major cereal company
By Dave Flessner
Jim Kennedy III admits that it took some imagination last spring to see how Chattanooga’s biggest warehouse could
 be built on a hilly farm spanning the Tennessee-Georgia border along Old Wauhatchie Pike.
But only six months after workers began grading the 90-acre site along the CSX Railroad line in Lookout Valley, Mr. Kennedy’s Kenco is preparing to begin using one of the largest buildings ever erected in Chattanooga. The initial $25 million complex includes more than 15 acres under one roof and could grow another third if the business grows as expected in the future.
"It took a real leap of faith to think we could develop the site and build this size facility in such a short of time," said Mr. Kennedy, president of the family-owned Kenco, one of the South’s largest warehouse and logistics companies. "But we knew we had to be able to do it to keep this international customer in Chattanooga."
The Minneapolis-based company, which acquired its crosstown rival in November 2001, will begin consolidating its two Chattanooga warehouse operations into the new 688,200-square-foot Kenco warehouse next month. The facility, which could be expanded to include up to 1 million square feet, will serve as a Southeastern distribution center.
Kenco will own and operate the complex, which will be leased to the customer. The new facility will be used to store and ship tons of packages of cereals and dry goods throughout the Southeast from more than 80 truck bays. Some shipments will use the adjacent CSX rail line, according to Kenco Vice President Jimmy Glascock. The project will help save and add up to 90 jobs in Chattanooga, Mr. Kennedy said, and open up more than 500,000 square feet of Kenco warehouse space elsewhere in Chattanooga. "We hope to be able to fill this space by the end of this year," said David Gilley, vice president of marketing for Kenco.
"We’ve been very pleased at the number of companies that find Chattanooga to be a good location. We have excellent highway and rail connections to serve not only the Southeast but most of the Eastern half of the country."
A recent study for the Chattanooga Area Chamber of Commerce identified warehouse and distribution businesses as one of the region’s growth industries for the future.
The Kenco Group owns or manages nearly 16 million square feet of warehouse and distribution facilities in 19 states, including 4 million square feet here.
But no project has involved so much earth moving and rock crushing as Kenco’s newest building in Lookout Valley, which company officials dubbed "the Rock" for all of the rock and cement moved at the site.
The builders of the structure — Conlan Co. in Atlanta and Stein Construction and Wright Brothers in Chattanooga — erected a temporary concrete mixing plant on the site to use rock dug up on the property to help mix the 30,000 cubic yards of concrete used for the floors and walls of the new warehouse. At one point, more than 200 workers were on the property pouring a record volume of concrete for a single day in Chattanooga, exceeding even concrete poured on any day during the construction of the Chickamauga Dam in the 1930s.
Since the new warehouse covers land in two states, developers got tax breaks from both Hamilton County in Tennessee and Dade County in Georgia.
Kenco, which began as Cherokee Warehouses in the 1950, built its first warehouse in Lookout Valley in the 1960 and has since built a half dozen buildings for manufacturing, food and equipment storage for a variety of companies.
"We’re building for the future with this newest facility," Mr. Kennedy said.
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