During Tuesday’s virtual regular session the Amarillo City Council approved a trio of agenda items that moved the city closer to finalizing details of a project that could yield an Amazon non-sortable fulfillment center here.
City council members adopted on second reading Ordinance 7901, which designates certain areas of the city as Reinvestment Zone 12 for commercial and industrial tax abatement in the vicinity of NE 24th Street and Loop 335 – involving approximately 100.39 acres. Amarillo Economic Development Corporation President and CEO Kevin Carter previously noted local governments often use tax abatements to attract new industry and commercial enterprises and encourage the retention and development of existing businesses.
Additionally, the city council approved a tax abatement agreement between the city, Happy Horizons Properties L.P., ET Amarillo LLC and Amazon.com Services LLC. According to the Agenda Item Summary, project highlights include:
– Construction of a new one million square foot facility on 110.39 acres located at NE 24th Street and Loop 335
– Capital Investment totaling $100 million ($70 million in facility improvements and $30 million in equipment)
– New employees totaling 500
– A minimum in new projected payroll of $13.5 million
Per the summary, the AEDC requested the city approve a tax abatement of future taxes on the costs of construction and equipment – recommending a 50 percent abatement for five years on the above costs.
And the city council granted approval of the AEDC Board of Directors-approved Location Incentive Agreement proposing an incentive of $2.5 million if Amazon employs at least 500 full time equivalents and provides $13.5 million in annual payroll over a five year period. Per the AEDC, if Amazon was to drop below the 500 full time equivalents and $13.5 million in annual payroll targets, the AEDC would recapture that year and the years left in the agreement.
Each of three agenda items passed with a 4-1 vote, with Council Member Elaine Hays casting the dissenting vote on each item.
“This has been a very unusual year and so the timing of this project is a bit of a challenge,” Hays said. “In a year where our local businesses have been limping along and struggling to stay afloat with the COVID-19 restrictions, it has been an opportunity for larger companies, and certainly Amazon, to have record-breaking years. This year, to be asking for preferential treatment, cash up front for a project is a difficult time to ask our community to be using our tax dollars for that. It’s the timing.”
Hays said a larger issue is the city’s partnership with Amazon.
“I am very concerned about the actions that the parent company has taken over the last couple of weeks related to free speech issues,” she said. “Very specifically, Amazon has withdrawn, cut off the social network Parler from the cloud hosting Amazon web services. Denied the use of their infrastructure, unless demands to control content were met. Amazon participated in a coordinated attack by the big tech giants to kill competition in the marketplace and censure conservative speech. That is very disturbing to me. I would like to celebrate this opportunity, but because of these issues I’m raising, I have major hesitations.”
According to the Amazon.com website, non-sortable fulfillment centers range in size from 600,000 to one million square feet and employ more than 1,000 full-time associates. In those centers, Amazon associates pick, pack and ship bulky or larger-sized customer items such as patio furniture, outdoor equipment or rugs, according to the website.
“So you’re looking at a total economic impact of about $725 million – which is substantial,” Carter said, citing the addition of 366 spinoff jobs generated beyond the 500 Amazon associate positions. “That’s on city and government services. That’s not the overall impact – that’s just on water and sewer usage. Those kind of items. They (Amazon) did not ask for a tax abatement from the school district, Amarillo College or the Panhandle Groundwater District. They don’t like to take dollars out of education.”
Carter said the Potter County Commissioners’ Court would consider the tax abatement request during its Feb. 8 meeting, with Amazon then making a decision whether to move forward with the Amarillo project. He said the projected time frame calls for the operation to be functional by the latter portion of the third quarter of this year or the early portion of quarter four.
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“Still a couple of steps for us left in the due diligence process,” Jessica Breaux, manager of Economic Development for Amazon, said. “Certainly this meeting and the conversation with the county is a large part of that. If the project does move forward, we would anticipate and hope and be working toward having a building operational before Amazon’s peak season.”
Breaux said with regard to the manner in which Amazon would use the $2.5 million LIA funds, Amazon has several infrastructure projects that are part of the overall site development. Hays requested assurances from Amazon regarding workplace safety conditions amid the COVID-19 pandemic. Breaux offered the following in response to Hays:
“Certainly, the safety of our associates is paramount to our entire company – and is our first priority,” she said. “In response to COVID we made 150 different process changes in those very early weeks of the pandemic to make sure that our associates were protected. We’ve invested over $4 billion in safety measures that includes PPE and things we’ve done inside our facilities. We actually utilize a technology at centers where associates are able to see on a camera if they are too close to the associate next to them.”
Per Breaux, temperature screenings are implemented, as well on-site testing. She said employees are provided paid time off if they are sick or have been exposed to COVID-19.
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