More subsidies for more massive airport-adjacent Amazon warehouses

On 14th February 2020 a massive Amazon warehouse near the entrance to New York Stewart Airport in Orange County, New York, measuring more than 1 million square-feet, was granted a payment-in-lieu-of-taxes (PILOT) agreement by the Town of Montgomery Industrial Development Agency (IDA). The $20.5 million tax break was agreed with a 5-2 vote. It was reported that felling of nearly 190 acres of trees to make way for the warehouse, a ‘fulfilment center’, would begin four days later. The project site is immediately north-west of New York Stewart Airport, next to the intersection of two major highways, routes 17K and 747. The two satellite images below show the site in September 2019, pre-construction when the trees were still standing, and in December 2020, by which time trees have been felled and the warehouse building along with earthworks surrounding it and an access road are clearly visible.

Satellite imagery of the Amazon warehouse site in Montgomery (top left), next to New York Stewart Airport (bottom right). Use the slide bar in the middle of the two images to see the changes at the project site between September 2019 and December 2020.

Works at the site continue and the warehouse is scheduled for completion in time for the 2021 holiday shopping season, i.e. the beginning of November. At 1,010,880 square feet the warehouse, one of Amazon’s largest windowless giants, will be the largest building in Orange County. The facility will operate day and night 24/7, will have its own wastewater treatment plant and there will be a parking lot for 1,200 tractor-trailers and cars. Montgomery residents say that noise and dust from construction is having negative impacts on their lives. Many local residents had raised concerns over negative environmental impacts of increased traffic, potential contamination of nearby Tin Brook and stormwater runoff when the Amazon warehouse was approved, in February 2020. Local business owner Barbara Lerner, whose property abuts the eastern edge of the Amazon site, angered by approval of the warehouse, referred to two pending lawsuits against the project, one asserting that part of the warehouse site was improperly zoned, the other claiming that the developer had misrepresented the nature and character of the area.

Dan Berger, founder of a citizens’ group with 500 members, Residents Protecting Montgomery, said it was difficult to understand the rationale for IDA board members allowing a tax break for a large company like Amazon. The group’s ‘Mega Warehouses 101‘ document lists the concerns of the residents uniting to protect their town when officials fail to research the detrimental impacts of mega-warehouses, defer to warehouse firm laywers when questioned and seem determined to permit warehouse developments. Truck and car traffic will increase noise and air pollution and the scale of the warehouses and associated road traffic strains small town infrastructure including road maintenance, power grids, water usage, policing and fire services. A majority of the jobs are minimum wage, insufficient for workers to reside in Montgomery and lowering property values for existing residents due to zoning changes from residential to industrial and aesthetic impacts such as 40-foot high cement walls and 24-hour operations bringing light pollution at night. Zoning changes could pave the way for more warehouse development around the airport, on green space and farmland. Speaking about recommendations made by a study of the Route 17K corridor Maureen Halahan, president and CEO of the Orange Country Partnership, recommended creation of two economic development zones, one around the airport and another along 17K, which would permit commerical development on rural/agricultural areas.

Expanding Amazon’s footprint on Long Island

In May Amazon leased a planned warehouse in Woodmere, on an 11-acre site to the south of JFK Airport. The facility will be built and owned by JFK Logistics Center LLC, an affiliate of Wildflower Ltd., a Manhattan-based developer. Wildflower has been granted $16 million in economic development incentives by the Town of Hempsted Industrial Development Agency (IDA). An incentives package approved in April 2020 included a 15-year payment-in-lieu-of-taxes (PILOT) agreement and exemptions from mortgage recording and sales taxes. The 422,000 square foot facility, a ‘last mile distribution center’ will be Amazon’s second largest in the region and brings the firm’s planned warehouse space in Long Island to more than 1.4 million square feet.

At the east end of Long Island, Gabreski Airport, located immediately to the north of Westhampton Beach village, in one of the wealthiest areas of New York, the Hamptons, hosts an Air Force Base and provides services for a wealthy clientele who can afford private jets, helicopters and single-engine recreational planes. Plans for an Amazon distribution hub on Suffolk County owned land near the airport are not landing well with the seaside village’s 2,000 inhabitants who are concerned over the potential increase in aircraft traffic. One resident with a summer home in the village said “it’s going to be horrible…I’m already hearing airplanes when I sit outside by the pool in summer. Can you imagine if Amazon is here?” Described in the New York Post as a ‘mammoth warehouse’ the 91,000 square foot facility may be large compared to other buildings in the beachfront village setting, but is dwarfed by many airport-adjacent Amazon facilities measuring up to 1 million square feet, and exceeding this scale in some instances.

In October 2020 Suffolk County Industrial Development Agency gave preliminary approval for $2.3 million in tax breaks for the developer of the Amazon warehouse near Gabreski Airport, Rechler Equity Partners. The incentives package also included a 53 per cent reduction in property taxes. Legislator Robert Trotta called the decision “unconscionable” and called for it to be immediately rescinded, saying that Amazon’s IDA application was “fraudulent”. Along with supporters he called for rescinded tax breaks because Amazon competes with small businesses, many of which were struggling because of the Covid-19 pandemic. Another legislator, Anthony Piccirillo, said the tax break pushes the tax burden “onto middle class and working families throughout Suffolk County”. Christopher McNamara, president of Greater Smithfield Chamber of Commerce, said Amazon did not need the tax break, “$2.3 million is a drop in the bucket to them, but to Suffolk County and to taxpayers of the county, we need it.” Nevertheless, Amazon secured the tax break in November 2020. Robert Trotta said that Rechler had misled Suffolk County by stating on an aid application that Amazon would select an out-of-state warehouse if lawmakers did not approve the tax breaks. Speaking to the New York Post he asked “Why are we giving billionaires tax breaks? The tax breaks they got should be immediately rescinded.”

In North Carolina and Oklahoma

In North Carolina, Amazon is planning a 620,000 square foot warehouse, a $100 million ‘import processing center’, in West Smithfield Industrial Park, next to Johnston Regional Airport. Johnston County has approved a seven year abatement on property taxes, accounting for 90 per cent of withholdings for the first three years the tapreing downwards to 50 per cent on year seven. Amazon will also get a five year grant on personal property. The total economic development investment grant over the seven year period amounts to more than $3.3 million. Johnston County officials worked on the deal for about six months before Amazon officially announced the plans in May 2021. If the project goes ahead as scheduled the facility will launch in 2022.

In Oklahoma, a new Amazon operations facility with a sortation center, next to Tulsa Airport, is anticipated to be completed later this year. The 270,000 square foot facility, Amazon’s third large project in Tulsa, will take up a 40 acre site, located on Tulsa Airports Improvement Trust (TAIT) land. Welcoming the expansion of Amazon’s footprint in Tulsa, Joe Robson, Chair of TAIT, said, “This initiative capitalizes on the use of available land that is adjacent to the airport as well as Highway 168, making it extremely attractive to companies looking to expand near Tulsa’s largest Industrial and transportation corridor.” TAIT will enter into a long-term land lease and Tulsa International Airport Development Trust (TIADT) will provide financing incentives through its Tax Increment Finance (TIF), whereby a firm keeps or captures any increases in property tax revenues from post-development increase in the value of their property. Alexis Higgins, CEO of TAIT, said “Property development is one of the airport’s key initiatives, and we are thrilled to have Amazon continue their investments here in Tulsa and on airport land”. Amazon’s new facility is the latest addition to the airport industrial complex which includes 4,900 acres hosting the city’s largest aviation, logistics and transportation providers. A further 700 acres of property are available for industrial development.

On farmland in Fargo

In North Dakota, a new Amazon distribution center near Fargo Airport (also known as Hector International Airport) might be built without tax breaks. Fargo City Commissioner Tony Gehrig told WXFG News that Amazon had not, as yet, asked for any tax breaks for the project, which would mean “more tax revenue for the community”. A large area area of farmland will be lost. The site, approximately 110 acres of farmland north of Fargo Airport, was recently annexed and rezoned by the City of Fargo. The new Amazon distribution center will be by far the largest building in the City of Fargo, and possibly the largest in the entire state of North Dakota. The massive fulfillment center will be 40 foot high with 1.3 million square foot of warehouse space. ‘Amazon is paying for two road projects to support its new facility, and preparing to seek bids for construction of new turn lanes (traffic lanes that allow vehicles to make a right or left turn at an intersection or into a side-road) on existing roads to facilitate access.

Amazon did not officially announce its Fargo warehouse project until October 2020, more than two months after work had started on the site when Fargo City Commission approved permits and zoning without naming the company involved. By January 2021 the pre-cast concrete walls were being erected. By April 2021 construction of the distribution center was moving forward at a rapid pace. Structural steel, roofing and the pre-cast walls were nearing completion and 1,300 yards of concrete were being poured daily for the interior floor. More warehouse development is proposed next to the Amazon distribution center, and might be supported by tax breaks. Minneapolis-based Hyde Development, is seeking a $5.25 million property tax break for an industrial park spanning 44 acres and hosting 643,000 square feet of warehouse space. More farmland would be paved over. The site is zoned for agricultural uses, a designation intended to protect farmland. But the City of Fargo’s land use plan is for industrial and commercial development in this area.

Land-based distribution hubs

Aside from the planned warehouse near JFK Airport, the airport-adjacent Amazon facilities mentioned above are not included in a recent map of the growing Amazon Air network of ‘air hubs’, many of which have direct access to the airfield. In contrast, these warehouses are land-based distribution hubs; positioning of the facilities takes advantage of airport proximity to major highways and interchanges along with the zoning of large areas of undeveloped land around airports for industrial development. The warehouses may well lead to an increase in air cargo as Amazon’s logistics network expands, but the emphasis is on surface transportation. All the Amazon warehouses are heralded by authorities and the mainstream media with claims of job creation. But much of the ‘new’ employment will displace jobs from elsewhere, from smaller-scale businesses that do not benefit from the tax breaks and other subsidies bestowed on Amazon. And tax breaks for Amazon are spiralling upwards. The Amazon Tracker, produced by Good Jobs First, tallies state and local economic susbidy deals given to Amazon throughout the USA. At the time of GAAM’s previous post about Amazon’s expanding footprint during the Covid-19 pandemic, in August 2020, subsidies granted to Amazon stood at $2,982,000,000. Just nine months later, in May 2021, this figure has increased by more than 25 per cent, to at least $4,092,000,000, and counting!

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