trees

More subsidies for more massive airport-adjacent Amazon warehouses

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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!

Nijgadh aerotropolis – 2.4 million trees could be felled, and 7,380 people displaced

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An 80 square kilometre aerotropolis is planned in Nijgadh, Nepal. The projects entails displacement of 7,380 people and felling of 2.4 million trees.

A major aerotropolis is planned in Nijgadh, in the Bara District in southeastern Nepal, 175 kilometers south of Kathmandu. If the megaproject proceeds as planned as many as 2.4 million trees will be felled, and 7,380 people living in the Tangiya Basti settlement within the site will be displaced. The government has repeatedly stated that Nijgadh Airport with a 80 square kilometer site, will be the largest, by area, in South Asia. An airport city adjoining the airport is planned. The map below shows the proposed Nijgadh Airport boundary as reported in the Nepal Gazette on 5th June 2015. The site is between two braided rivers, Pashah to the west and Bakiya to the east. The northern boundary is the Mahendra Highway between the two rivers. Most of the site, about 90 per cent, is densely forested land, predominantly consisting of Shorea robusta trees, which are also known as Sal or Sakhua. The settlement in the middle of the airport site, where about 7,380 residents living in 1,476 households face eviction, is called Tangiya Basti.

Nepal - proposed boundary of Nijgadh Airport, an 80 square kilometre aerotropolis
Nijgadh Airport site boundary , as described in Nepal Gazette, 5th June 2015

A series of government announcements underlined determination to pursue the project. In June 2014 the government emphasized determination to attract investors, reportedly ‘preparing to complete the pre-construction works to spare the investors all the hassles whether the government, private sector or foreign investors invest on the project’ as preparations were being made to fence off the land. January 2016 saw another high level push to commence construction of Nijgadh airport. The Ministry of Culture, Tourism and Civil Aviation (MoCTCA) was instructed to begin land acquisition, site clearance and resettlement of affected people and the Ministry of Soil Conservation was directed to fell trees and clear the site for the construction of primary and access roads to the airport site within two months.

It appears that a confirmed investor in the airport has proved elusive. Public funds will be used to develop the project. On 24th May 2016 the government allocated US$46.4 million for the construction of Nijgadh Airport, for land acquisition, resettlement of displaced people, environmental impact assessment and preparation of a detailed project report. The Tourism Minister said the project would be developed in phases, beginning with a single runway facility with capacity for 20 million passengers annually, with the accompanying airport city to be constructed at a later stage. In January 2017 the government assigned preparatory work on Nijgadh Airport to the Nepal Army, tasking it with building a perimeter road and an access road to the area earmarked for the runway, and clearing trees to make way for construction.

600,000 trees could be felled to fund Nijgadh Airport construction

By May 2017 forest earmarked for Nijgadh Airport remained unfelled, but vast numbers of trees could be transformed from an obstacle to airport construction into a source of funding for it. A news article entitled ‘Money grows on trees for Nijgadh airport project‘ reported a statement by officials that a vast swathe of the forest, about 600,000 trees, will be felled for the airport. The market value of the lumber was estimated at nearly US$581 million, which would be sufficient to pay for half of the US$1.172 billion construction costs for the first phase of the airport. The Forest Ministry permitted the Tourism Ministry to conduct an EIA (environmental impact assessment) on the condition that 25 trees are planted for every tree that is cut down.

Tourism Ministry officials pointed out that tree planting on this scale this would be difficult to implement, as felling 600,000 trees would require the planting of more than 15 million saplings. The suggestion that 15 million trees could be planted is more than merely ‘difficult’; it is completely unfeasible. Any such mega tree plantation could not replace the rich biodiversity of an long-established forest ecosystem and an enormous land area would be required, inevitably entailing the wholesale obliteration of an existing ecosystem in order to plant such a huge number of trees.

2.4 million trees could be felled for 80 square kilometre aerotropolis

Subsequent announcements in July and August 2017 threaten the felling of even more trees for Nijgadh Airport, over 2.4 million, to make way for the full 80 square kilometer aerotropolis. The first phase of the airport will spread over between 1,000 and 2,000 hectares, and CAAN has assigned the Nepal Army to clear trees at the airport construction site and to build access and perimeter roads. The government has allocated US$14.6 million for the project this fiscal year with CAAN setting aside an additional US$29.2 million to pay for initial works, if required.

A short video of the forest at risk of being destroyed for Nijgadh airport was posted on Twitter, by Milan Dhungana, who commented: “It’s very hard to believe that this beautiful dense forest is soon to be vanished to give way to a new airport.”

Photos of the forest that is at risk of being felled were also posted on Twitter:

7,380 people face displacement

Residents of Tangiya Basti, 7,380 people living in the settlement in the midst of the forest land earmarked for Nijgadh aerotropolis, face displacement. In June 2014 MoCTCA was attempting to settle disputes over compensation for land acquisition and people’s demands for resettlement arrangements. By March 2016 the task of collecting land details had been completed, with land valuation about to commence, along with issuing public notices for land acquisition. Land had been categorized as under individual ownership, public land and ‘unidentified ownership’, the majority belonging in the latter category. A video shows the Civil Aviation Authority of Nepal (CAAN) sign erected at the Nijgadh Airport site.

A 35-day notice was published for landowners to apply for compensation in March 2017. The amount of compensation for land acquired for the airport had been confirmed and the notice required landowners to harvest their crops within a month, prohibiting them from cutting any trees or plants. But compensation is only available to a minority of residents who have recognized land ownership. A September 2016 project report by Tourism Secretary Prem Kumar Rai stated that 110 households were eligible for compensation, with between 80 and 85 of these households agreeing to the compensation and the remainder reluctant to accept the government’s offer. The majority of residents facing eviction, about 1,400 households, have been categorized as ‘squatters’. Chief of the airport project, Hari Adhikari, said that nothing had been done to resettle the ‘squatters’ living on the construction site. In July 2017 the Himalayan News Service reported that the government’s preparations to acquire land for Nijgadh Airport had left residents of the Tangiya settlement, about 7,380 people, fearing their displacement and in a state of panic over their resettlement.

Tangiya Basti residents are struggling for new homes and livelihood opportunities. The Tangiyabasti Stakeholders Committee stated that construction of the airport had made their future uncertain and held a press conference where they demanded rehabilitation. Residents facing eviction are insisting upon replacement land and food supplies, provision of water, electricity and education in the place where they will be relocated, and one job for each of the affected families. Chair of the Tangiyabasti Stakeholders Committee, Ramesh Kumar Sapotka, said that they would refuse to vacate the area unless their demands were addressed.

Tangiya Basti residents have been living in limbo for years, knowing they face eviction for the long delayed airport, which was proposed 20 years ago. The settlement was established by the government for flood victims in 1975 and the majority of people living there are from the marginalized Tamang ethnic group. For more than 40 years the government has failed to fund essential services for their established settlement, or to support their own efforts to develop these services. Tangiya Basti residents lack electricity, a reliable drinking water supply, electricity and roads. Construction of schools has been cancelled leaving pupils with a dangerous seven kilometer walk through dense forest to get to classes, with the risk of being trampled on by wild elephants that roam freely in the area. Many locals have to go to a neighboring town to make telephone calls and walk for several hours to reach healthcare facilities.

Fast-track to destruction

A 76 kilometer road, a ‘fast-track highway’, linking Nijgadh Airport with Kathmandu, has been on the drawing board since 1996. Reducing the travel time to the capital city to one-hour, is considered essential for the feasibility of the airport, but the road megaproject has also been plagued with delays. A Detailed Project Report (DPR) for the ‘fast-track’, a four-lane mega-highway, crossed by seven bridges and expanding to six lanes, was completed in August 2015.

Preparatory work for construction of the road was fraught with technical problems. The Nepal Army began excavation works without regard to the specifications for a four-lane expressway and the challenges of construction works on steeply sloping terrain, which could cause landslides. After years of delays the foundation stone for the expressway was laid on 28th May 2017, and the project handed over to the Nepal Army which will oversee construction. In the interim the road has fallen prey to the cost escalation common to megaprojects around the world. Over a seven year period the estimated construction cost of the expressway has doubled to over US$1 billion.

Megaproject mania, misplaced priorities

The Nepal government’s relentless pursuit of Nijgadh Airport and the fast-track continues in the face of criticism that the projects are draining funds from other regions of the country.  Meanwhile, other megaprojects languish incomplete and have fallen far behind schedule, such as a 28 kilometer tunnel to bring water from Melamchi to Kathmandu and transmission lines. Massive deforestation looms to clear the designated site for the airport even though funding for construction has not been secured. Successive administrations have put forward different plans for financing Nijgadh Airport. As late as August 2017 no decision has been made on funding. Two financial models have been put forward. BOOT public-private partnership (PPP) would involve foreign investment or private financing. Alternatively, the government would develop the project under the engineering, procurement, construction and finance (EPCF) model.

Megaproject mania, in particular massive government expenditure on a gigantic airport, multilane highway and aerotropolis, is a serious case of misplaced priorities in one of the world’s poorest countries. Nepal is still reeling from a devastating earthquake on 25th April 2015 which killed nearly 9,000 people and destroyed over 700,000 homes. Political infighting has delayed reconstruction and, in spite of billions of dollars pledged in aid, outside of Kathmandu the majority of affected families are still living in desperate conditions, in tents or makeshift shelters, enduring harsh winter weather and heavy monsoons. In these circumstances, spending vast amounts of public money on a mega-airport that would displace over 7,000 people is nonsensical.