Last week the Postal Service informed unions and management that it is opening a new Sorting & Delivery Center in Pompano Beach, Florida, located at 3150 NW 33rd Street. The S&DC will begin operations in January 2024.

The facility will centralize carrier operations — about 250 routes — from five “spoke” post offices: Pompano Beach Main, Tropical Reef Station, Margate Branch, Coral Springs Branch, and Coconut Creek Branch. Tropical Reef will be the first facility to see its delivery unit — 90 routes — move to the new S&DC.

Here’s a map showing the S&DC and the five spoke offices.

The announcement of the new Pompano Beach S&DC came as a surprise because it had not appeared on any of the lists shared with stakeholders over the past year. But the Postal Service has obviously known about it for a long time.

The S&DC update notification sent to the unions and management late last week says that the finalized spokes were approved on Feb. 2, 2023. The deal on leasing the new space must have been made even earlier. Yet somehow and for some reason, the Postal Service kept the new S&DC under wraps, even as it was installing new carrier distribution cases and sorting machines. There’s no mention of the lease deal in local or business media outlets. It’s possible that even postal employees are first hearing about it.

For the most part, the Postal Service is repurposing its current inventory of processing centers, carrier annexes, and large post offices to create the new network, but in some cases it’s also leasing new facilities. Three of the new regional processing centers will be in newly leased and very large (1 million SF) spaces in Indianapolis, Charlotte, and Atlanta. Leasing new spaces for S&DCs, however, is news.

The centralization of letter carriers in Pompano Beach won’t just impact the 450 carriers who will be relocated. The five post offices also have about 80 customer service clerks, processing clerks, managers, supervisors, and custodial workers. Some of these positions will also transition to the new S&DC, and some will remain behind to manage the retail operations in the post offices. But many of these jobs will become unnecessary due to the consolidation of operations and the use of new sorting machines in the S&DC. Those employees will be “excessed” — they’ll have to find another postal job, most likely outside of Pompano Beach.

The S&DC will also impact everyone who lives in the area. When more than half of each post office is emptied of carriers and all that’s left are a few customer service employees to handle the retail operation, it won’t make much sense to pay lease and maintenance costs for facilities that are several times larger than necessary.

The Postal Service won’t admit it, but these post offices will probably be closed, and the three properties it owns — Pompano Beach Main, Margate, and Coral Springs — will eventually be sold. They may be replaced by new, small retail post offices — like the Coral Reef Postal Store and the Lighthouse Point Post Office — or by new contract postal units, like the Post-N-Go in Pompano Plaza.

There may even be a new post office in the S&DC itself, which could become the new “main” post office of Pompano Beach. The Postal Service is installing new self-service equipment in S&DC post offices across the country, and that may be the plan for the Pompano Beach S&DC as well.

The future of postal services in Pompano Beach will eventually be revealed, but the Postal Service is not required to notify elected officials and customers until the time comes for a post office discontinuance or relocation — even though these decisions may have already been made. In the Postal Service’s view, opening up a new S&DC and relocating employees from local post offices are strictly internal operational matters that do not concern the public.

Since the Postal Service hasn’t revealed any details about its plans, much of the following is based on conjecture, and some of it could be wildly off base. Take it for what it’s worth.

The Pompano Beach S&DC

The Pompano Beach S&DC is located in the Royal Palm region, one of 60 regions in the Postal Service’s new network design. The region’s main node is the Regional Processing & Distribution Center (RPDC) in the Royal Palm Logistics Distribution Center (LDC) in Opa Locka, a 460,000 SF facility owned by the Postal Service.

The Royal Palm region will have a Local Processing Center (LPC) at the Miami P&DC on 72nd Avenue; this facility could become an S&DC as well. There’s also a P&DC in West Palm Beach on Summit Boulevard — not far from Trump’s West Palm Beach golf club  — that could become a LPC and/or S&DC.

The new Pompano Beach S&DC is midway between the Miami and West Palm Beach facilities. It’s in the Rock Lake Business Center at 3150 NW 33^rd Street. The developer is IDI Logistics (Industrial Developments International), a privately held real estate investment trust with headquarters in Atlanta, GA.

The original plan for the Rock Lake Center included four buildings, and many of the online real estate listings show renderings with all four. But apparently the plan changed, and now there will be two buildings, with the space for the other two being used as large parking lots.

Here’s a video tour of the property from four years ago, with the original plan of four buildings.

A more recent image of the Rock Lake Center shows two buildings (B is nearer the highway; and D is nearer the pond) and large parking lots where the other two buildings would have been. Here are a couple of views.

It’s possible that the Postal Service will share the Rock Lake Business Center with Amazon, as it’s doing with the new RPDC in Charlotte. According to the Pompano Beach Development Services, Amazon was permitted in 2020 for $2.1 million of interior alteration work in Building D. The aerial view with labels (from Bing Maps) shows Amazon in Building B, but it’s not clear where this information came from.

Amazon may have subsequently dropped its plans to move into the Rock Lake Center. According to a January 27, 2023, article in the South Florida Sun Sentinel, Amazon received permits, but the project was on hold since no business license had been pursued. It’s possible that the Postal Service itself took over the lease.

The Postal Service has most likely leased Building D at 3150 W. 33rd Street — the address for Building B is 3250. Building D is the larger of the two, with 135,962 SF. The property listing indicates that there are 140 parking spaces, most of them on the side where there’s now a canopy. This canopy wasn’t part of the original plan, and its purpose is a mystery — a shelter for loading delivery vehicles, parking for EV charging stations?  There’s also the parking lot on the east side that can handle about 250 vehicles.

That adds up to 400 parking spaces, which seems like a lot, but it’s not enough for delivery vehicles for 250 routes and personal cars for over 300 employees. Perhaps the Postal Service is also leasing the other parking lot as well.

The Center is located near major interstates, well suited for the large trucks that connect distribution centers. But it’s not exactly your neighborhood post office.

An overview of the five post offices

Relocating carriers to the S&DC will have several financial impacts — the additional lease costs on the new S&DC, additional lease costs if smaller retail-only offices replace the current post offices, and the higher costs for longer routes to the S&DC. There will also be savings from closing two leased offices and reducing carrier-support labor. Here’s an overview of the five offices, followed by a very rough estimate of the additional costs and savings.

Lease Costs

The real estate listings don’t provide a rental price for the new S&DC property, but there’s a comparable at the East Pompano Industrial Center, about five miles from the Rock Lake Center. The property has three buildings ranging in size from 160,000 to 215,000 SF, and the advertised price is $14/SF.

If the Postal Service has rented a building with 136,000 square feet at $14/SF, that’s $1.9 million a year in lease costs. The Postal Service is probably leasing one or both parking areas intended for other buildings, so let’s figure another $200,000. And there’s also the cost of interior alterations, a one-time cost, perhaps a couple of million, say $100,000 a year over ten years. Let’s say total costs for the new space are $2.3 million.

Let’s assume that the Postal Service decides to relocate the five post offices rather than discontinuing them. Retail-only post offices in metro areas — they’re called finance stations and finance branches — average about 3,000 square feet.

The Coral Reef Postal Store is one such finance unit. Located in a shopping center in Pompano Beach, the rent on 3,200 SF was $22/SF in 2017. Just looking over Loopnet at other comparables, $25/SF seems to be a conservative estimate these days.

So say the Postal Service rents five spaces in shopping centers, 3,000 SF each, at $25/SF. That’s $375,000 annually. Added to the $2.3 million for the new S&DC, that’s $2.7 million in new lease costs

The five post offices losing their carriers total 123,000 SF — almost the size of the new building that’s been leased. The Postal Service owns three of them, for which the only cost is maintenance. The Coconut Creek and Tropical Reef branches are leased, so moving out will yield some savings.

As of 2010-2015, the rent on the Coconut Creek facility was about $237,000 and on Tropical Reef, about $448,000. (The USPS stopped reporting lease costs in 2017.) With the increases that have taken place since then (usually about 13 percent every five years), the total rent for the two buildings is perhaps something like $600,000. Subtract that from the $2.7 million in new lease costs for the S&DC and five replacement finance units, and the net is $2.1 million in additional costs for space.

Labor and transportation costs

Then there’s the cost of longer routes as well as the savings from reducing carrier support labor in post offices. To help visualize the impacts of longer routes, here’s a map showing the S&DC, the five spokes, and the ZIP code areas served by each delivery unit.

A 2012 OIG study on decoupling carrier and retail operations examined the added costs and savings of consolidating about 100,000 routes from about 10,000 post offices. Using the IG’s numbers, one can estimate the increased costs for longer routes in Pompano Beach.

For areas with a high population density, like Pompano Beach, the IG determined that the average transit distance for carriers — not including the route itself — was currently 2.5 miles, round trip. In the IG’s scenario, if routes were relocated to a nearby post office, the round trip would increase to 5 miles.

Moving carriers to a centralized S&DC, however, means that the additional travel will be much greater. The five post offices are, on average, 6 miles from the S&DC, and the more distant routes will be about 8 miles. Some routes will be closer to the S&DC than they are to the post office, some will be about the same distance, many will be farther away, and some will be much farther. It’s guesswork, but a reasonable estimate for the round-trip transit between S&DC and routes is 10 miles.

That’s four times the current average distance and twice the estimate in the IG’s study, and it means another 7.5 miles and 18 minutes of drive time going back and forth between the S&DC and routes. That may not seem like much, but over the course of 300 days and with 250 routes, it adds up. In fact, it adds up to $1.8 million — $830,000 for transportation (fuel, maintenance, etc.) and $945,000 for carrier work hours. That’s about $7,000 per route.

In the OIG study, the additional carrier costs were offset by the savings associated with eliminating clerk work hours for support of carrier operations and closing, rather than relocating, the 10,000 post offices. The IG estimated that relocating 100,000 routes would save $566 million in reduced clerk labor (13.6 million work hours at $42/hour). For 250 routes at $5,660 per route, that’s $1.4 million in savings — the equivalent of about 18 clerk jobs.

The other labor costs would remain the same, with some non-carrier jobs relocating to the S&DC to support the carrier operation and some clerk jobs remaining at the post office to do the retail work.

If carrier costs increase by $1.8 million and carrier support costs are reduced by $1.4 million, labor and transportation costs would increase by nearly $400,000. The total additional costs for space and carrier relocation would increase by $2.5 million a year.

Selling the three buildings would cover these additional costs for several years, but the lease and carrier costs will go on long after the break-even point.

Here’s a summary of these back-of-the-envelope calculations.

The Postal Service obviously has a much more accurate estimate for all the additional costs and potential savings that will result from leasing the new S&DC and consolidating carrier operations. But the Postal Service is not required to share its estimates or provide a financial rationale for its decision. Postal employees, customers, and the residents of Pompano Beach must nonetheless bear the consequences.

Here’s a closer look at each of the five post offices.

Tropical Reef Station

The Tropical Reef Station at 1950 NE 6th Street, is the largest of the five offices losing their carriers, and it will be the first to send carriers to the S&DC. It has 48,403 SF, 175 employees, and 91 routes covering three ZIPs — 33060, 33062, and 33064 — with 64,000 delivery points. While the Atlantic Avenue facility is officially the Main Post Office of Pompano Beach, the Tropic Reef Station is the main “downtown” office for Pompano Beach. It’s located across from the Amphitheater and next to the Pompano Beach credit union and Cowboy Café.

The Postal Service has been leasing Tropical Reef Station since 1962, and it looks as though the current lease runs to 2025.

It’s 7 miles and 18 minutes from the S&DC, but the routes on the southern end are 11 miles and 30 minutes away — the maximum “reach” between S&DCs and spoke offices in the new network.

The Tropical Reef Station is just three miles from the Hillsboro Inlet, the last known location of the Barefoot Mailman, James Hamilton, who went missing on October 10, 1887, as he crossed the inlet between Hillsboro Beach and Pompano Beach. Hamilton was the most famous of the carriers on the first mail route from Palm Beach to Miami, a contracted Star Route that often involved walking barefoot on the beach.

In 1939, he was honored with six murals in the West Palm Beach Post Office, painted by Stevan Dohanos for the Treasury Department’s Section of Fine Arts. This New Deal post office was sold in 2010, and the murals were moved a couple of times; they are now in the new West Palm Beach post office on Summit Blvd.

Pompano Beach Main Post Office

Pompano Beach is named after the Florida Pompano, “the world’s most edible fish.” It’s the birthplace of Kelsey Grammer and the home of the Goodyear Blimp Spirit of Innovation.

Pioneer settler George Butler was appointed postmaster for the new settlement sometime in the 1890s. He supposedly ran the post office from his home, out of a cigar box. The area was incorporated in 1908.

The Postal Service has owned the Pompano Beach Main Post Office at 2351 W. Atlantic Boulevard since 2000. In 2009 it was renamed the Elijah Pat Larkins Post Office Building to honor the city’s first African American mayor (he served seven terms, starting in 1985).

The Main Post Office is 26,497 square feet, houses 33 city carrier routes, has about 80 employees, and serves ZIP codes 33066 and 33069, with over 26,000 delivery points. It’s about 4.5 miles and 12 minutes from the new S&DC.

The new S&DC is in ZIP code area 33069, which gets delivery from carriers at the Pompano Beach Main, so some of these routes are actually closer to the S&DC than to the Main post office. But the Main PO also houses carriers for 33069, and some of those routes are about 8 miles and 20 minutes from the S&DC.

Margate Branch

Margate was founded in the 1950s, when much of it was still part of the Everglades or farmland. According to Wikipedia, the name Margate combines the first three letters of the founder’s last name, Jack Marqusee, and the first four letters of gateway, since it was considered a “gateway” to western Broward County.

The Postal Service has owned the Margate Branch post office at 5094 Coconut Creek Parkway since 1975. It has 18,980 SF, 63 routes, and 120 employees covering ZIPs 33063 and 33068, with almost 45,000 delivery points. It’s 4.7 miles and 12 minutes from the S&DC; routes on the southern end are 8 miles and 19 minutes away.

Coral Springs Branch

Originally marshy lands, the Coral Springs area was drained in the 1940s and then became a bean farm, then a cattle farm, and finally a planned community. Coral Springs was officially chartered in 1963.

There are two post offices in Coral Springs — the Coral Springs Branch at 3255 NW 94th Avenue (33065), and the Atlantic Branch at 8801 W Atlantic Boulevard (33071). For some reason, only the Coral Springs Branch is set to lose its carriers to the S&DC.  Maybe the S&DC doesn’t have enough room for carriers from both offices, or maybe consolidating the Atlantic Branch carriers will come later

Back in 2006, the city of Coral Springs asked the Postal Service to change the name associated with ZIPs 33065 and 30071 from Pompano Beach to Coral Springs — not merely a matter of civic pride but also an issue involving home insurance rates and revenue sharing for government programs. The Postal Service said no, and the city threatened legal action. In 2016, the Postal Bulletin announced that the ZIP place names would be changed from Pompano Beach to Coral Springs.

The Postal Service has owned the Coral Springs Branch since 1980. It’s in downtown Coral Springs, near city hall, restaurants, and a parking garage. It’s got 14,040 SF, 77 employees, and 32 city carrier routes that deliver to 22,000 addresses. It’s 7 miles and 16 minutes from the S&DC. Nearly all of the routes are closer to the branch than the S&DC; some on the west side of the ZIP are 8 miles and 18 minutes from the S&DC.

Coconut Creek Branch

Coconut Creek is the “Butterfly Capital of the World” because it is home to Butterfly World, the world’s largest butterfly aviary. The city seceded from Pompano Beach in the 1960s, but apparently it did not get a main post office, so the office remains a branch under the administrative supervision of the Pompano Main PO. In 2008, it was renamed the Army SPC Daniel Agami Post Office Building, after a soldier who died in the Iraq War.

The Coconut Creek Branch is located at 4233 W Hillsboro Boulevard in a shopping center shared with a Planet Fitness, Goodyear, a USPS office, La Brasa Restaurant, Burger King, and Walgreens.

The Postal Service has been leasing this branch since 1995. It’s got 14,779 SF, and as of the lease for 2010-2015, the rent was about $16/SF; the lease probably runs until 2025. About 80 employees work there, and 37 rural carrier routes cover ZIPs 33067 and 33073, with over 24,000 delivery points. (The area is actually suburban, not rural, but rural carriers do both.)

The branch is about 6 miles and 15 minutes from the S&DC. A few of its routes are closer to the S&DC than the branch, but those in the north end of ZIP 33067 are 8 miles and 18 minutes away.

Optimizing stations and branches

One of the cost-saving initiatives discussed in the Delivering for America plan is “rationalize stations and branches.” More specifically, the plan says the Postal Service will “evaluate and consolidate low-traffic stations and branches of city Post Offices into nearby full-service retail Post Offices.” That’s a good description of what may happen to the Pompano Beach stations and branches after the carriers are gone — they’ll be closed and consolidated into other retail-only post offices.

But the Postal Service maintains that the S&DC initiative will not impact retail operations or access. As the Postmaster General said in an interview for the latest issue of Eagle Magazine, “Customers will see no changes to their local Post Office retail operations; no Post Offices will be closed and PO Box service will not be changed with the opening of the S&DCs.”

Just yesterday, a spokesperson for the Postal Service told Michigan Live that ““customers will see no changes to their local post office retail operations,” as a result of the consolidation of delivery operations in Kalamazoo in June 2024. “No post offices will be closed and P.O. Box service will not be changed.”

The Postal Service has to say this. Otherwise, alarm bells would go off every time it announced the opening of another S&DC. And no doubt, when asked, the Postal Service will say that the post offices in Pompano Beach are not closing, despite the rumors and what’s being said on social media.

As part of the Public Inquiry being conducted by the Postal Regulatory Commission, the Postal Service explained it this way: “The Postal Service is not currently pursuing initiatives that would result in changes to retail access by aligning hours of operation to customer demand at certain Post Offices, or rationalizing stations and branches. However, this does not mean that the Postal Service will never pursue these or other initiatives in the future that might impact retail access.”

In other words, once implementation of the S&DC initiative is further along and there’s no stopping or undoing it, once hundreds of S&DCs have been created and thousands of carriers have been relocated and the EV charging stations have been installed and the dust has settled, the Postal Service will launch its next set of initiatives — reducing window hours, relocating retail operations, and closing post offices — but all that will have nothing to do with S&DCs.

— Steve Hutkins

(Featured Image: Rock Lake Business Center)

For more about the S&DC plan, visit our DFA dashboard.