Amazon Fulfillment

[Laramie]

Well that leaves location I-35/I-40 crossroads; significance to the proximity to the huge Dallas Market Center.

[Plutonic Panda]

^^^^ Laramie, I’ve wondered when OKC will get a world market center like the one in dallas or Las Vegas.

[shawnw]

http://newsok.com/okc-officials-to-c...rticle/5594332

[Pete]

If you do the math, you see there are 53 'quality jobs' at approximately $60K per year.

The remainder of the 1,750 mentioned in Jim Couch's memo to the trust would average just over $25K per year, or $12.10 an hour based on 2,080 annual work hours.


I doubt these quality job incentives are the only ones that have been negotiated by the City and State for Amazon.

-

Here is the meat of that memo from Couch to the Economic Development Trust:


Joint Resolution between The City of Oklahoma City and the Oklahoma City Economic Development Trust approving the allocation of General Obligation Limited Tax Bond proceeds and/or investment proceeds in an amount of $1,700,000 to provide job creation incentives for a job creation Economic Development Agreement with Amazon.com Services, Inc. in consideration for Amazon.com selecting Oklahoma City as the location for its new Fulfillment Center in Oklahoma City and for Amazon.com's commitment to create approximately fifty-three (53) new quality jobs over the next 5 years and authorizing and directing the General Manager and/or designee to negotiate an Economic Development Agreement with Amazon.com, for subsequent Trust and City Council consideration and approval, project to be located at 9201 S. Portland Avenue.
(GOLT)

Location
9201 S. Portland Avenue

Background
Amazon.com Services, Inc. ("Amazon") plans to add approximately 1,750 full-time jobs to the local workforce and to make approximately $153,000,000 in capital investment in a facility and site development in the next five years. As part of this project, the Oklahoma City Economic Development Trust will be incentivizing the creation of approximately fifty-three (53) new-to-market quality jobs eligible for incentives under the Strategic Investment Program and Amazon's capital investment of approximately $140,000,000 in building, infrastructure and equipment.

These jobs would be part of Amazon’s management team serving the company’s operations facility in Oklahoma City, which would serve customers throughout their fulfillment network. The average first year wage for the new jobs receiving incentives is estimated to be $60,000. After evaluating options for the location of this facility in other Southern and Midwestern states, Amazon has chosen to locate this facility in Oklahoma City. The availability of appropriate and affordable real estate, the ability to access regional transportation infrastructure and the ability to deliver the project to the market quickly, along with Oklahoma City’s receptiveness to the project, all contributed to Amazon's selection of Oklahoma City as the site for Amazon’s newest fulfillment center facility

Company Background
Amazon serves consumers through its retail websites and physical stores, and has a brand focus on selection, price, and convenience. Amazon has designed its websites to enable hundreds of millions of unique products to be sold both internally and by third parties across dozens of product categories. Customers access its offerings through websites, mobile apps, Alexa, and physically visiting Amazon stores. Amazon also manufactures and sells electronic devices, including Kindle e-readers, Fire tablets, Fire TVs, and Echo devices, and develops and produces media content. Amazon strives to offer customers the lowest prices possible through low everyday product pricing and shipping offers, and to improve operating efficiencies to continue to lower prices for our customers. Amazon also
provides easy-to-use functionality, fast and reliable fulfillment, and timely customer service.

Amazon fulfills customer orders in a number of ways, including through: North America and International fulfillment and delivery networks that it operates; co-sourced and outsourced arrangements in certain countries; digital delivery; and through its physical stores. Amazon operates customer service centers globally, which are supplemented by co-sourced arrangements.

Project Background
The Greater Oklahoma City Chamber and the City have worked with the Company since November of 2017. In evaluating its location for a fulfillment center, company management met with Chamber and State economic development officials to discuss the needs of their planned operation. Based in part upon local incentives, the company has decided to focus their growth in Oklahoma City.

Economic Impact
The total estimated economic impact of the incentivized portion of the project is $9.5 million over the first 2 years of operation (based on total project impact, including capital investment, wages, state and local taxes). The estimated local sales tax and property tax revenue is expected to be $2,611,402 over the first 2 years of operation and more than $178,769 annually from the 3rd year forward. The estimated economic impact of the entire Amazon project is $129,223,912 over the first two years of operation. The estimated local sales and property tax revenues for the initial five years are $4,815,763.

Recommended SIP offer: $1,700,000
The Greater Oklahoma City Chamber Economic Development Division recommends a local incentive package of $1,700,000 based on the following information provided by the Company:
• Investment of $140,000,000 in building, infrastructure at and around the Oklahoma City facility
• Incentive based on the creation of approximately 53 new jobs over 5 years.
• Estimated average annual wage of $60,000 (first year wage).
• Estimated incentized first year payroll of $1,080,000 which they plan to grow to $3,180,000 by the 2nd year of operation. For the entire 1,750 new jobs, the estimated first year payroll is $11,461,636, which they plan to grow to $45,899,000 by the second year of operation.
• The Oklahoma City operation will serve customers throughout the company’s fulfillment center service territory.
• This is the latest expansion in an established pattern or continual growth for the company.
• There is the potential for additional future growth at this facility.
• The Company considered a number of alternative locations for these jobs. The state and local incentives were important in positioning Oklahoma City as a competitive location for this operation.

Adoption of the attached resolution authorizes the OCEDT General Manager or his designee to begin negotiations with Amazon.com Services, Inc. for the development of an Economic Development Agreement and approves the allocation of $1,700,000 in General Obligation Limited Tax Bond proceeds and/or investment proceeds for the Economic Development Agreement with Amazon.com Services, Inc.

Estimated Cost Not to exceed $1,700,000

[Pete]

BTW, in just the last month the Oklahoman has included this line in each of 4 or 5 stories about Amazon:

Amazon already has a $3 million, 300,000-square-foot “Sortation Center” under construction at SW 15 and Council Road.

That facility opened in October of 2017; it's been almost 8 months.

They held big job fairs in the summer to get staffed up, opened in October and we posted photos of Gov. Fallin cutting the ribbon on October 24th, 2017.

Here is a recent photo I took:

[ChrisHayes]

I'm more excited about Amazon because of the ripple effect that facility could have for the area. It'll hopefully help ignite a wave of development around the airport and in Larriat Landing.

[Zuplar]

BTW, in just the last month the Oklahoman has included this line in each of 4 or 5 stories about Amazon:



That facility opened in October of 2017; it's been almost 8 months.

They held big job fairs in the summer to get staffed up, opened in October and we posted photos of Gov. Fallin cutting the ribbon on October 24th, 2017.

Here is a recent photo I took:

I actually started criticizing this on Twitter. Crazy to me that they don’t even know it’s been open for awhile now.

[Pete]

The Oklahoman finally changed their embarrassing repeated mistake by editing their last article:

Amazon has a $3 million, 300,000-square-foot “Sortation Center” at SW 15 and Council Road. Sorting centers are used to organize packaged items before final delivery to customers.

It goes to show how closely their reporters monitor this site, even though this description of a sortation center is misleading and in many ways incorrect.

In my reporting I've described in depth how these facilities work, mainly taking packages and grouping them by zip code before delivering to the corresponding post office before the USPS makes final delivery.

[gopokes88]

I feel neutral about giving amazon incentives.

[stile99]

With all due love and respect, can we have a separate thread to cuss and discuss incentives, and restrict/move such posts there? I ask because I went back to look for some info on CACI, and the CACI thread is filled with back and forth over incentives. Actual CACI information is hard to find, even in the thread one would think to look for it. This discussion also infests the convention center thread, the convention hotel thread, this thread, the Costco thread. I mean, it's a good discussion to have, but I don't think it needs to be had in every thread, to the point where trying to find information on the actual thread topic becomes all but impossible.

[OKCRT]

I'm more excited about Amazon because of the ripple effect that facility could have for the area. It'll hopefully help ignite a wave of development around the airport and in Larriat Landing.

I already felt a ripple. They sent me an email letting me know that my Prime membership went from $99.00 to $119.00. So I am thinking that us Prime members are paying for construction of their new facility. $20.00 a pop seems like a pretty significant increase all at once. Much more than the normal 5-10%. I am thinking about cancelling just because they just pretty much did this without asking me. A 5-10% increase could be seen as business as usual but 20%? But when I signed up a few years ago it was $79.00 so I can see how that guy JB is one of the richest SOBs in the world.

[Ginkasa]

I already felt a ripple. They sent me an email letting me know that my Prime membership went from $99.00 to $119.00. So I am thinking that us Prime members are paying for construction of their new facility. $20.00 a pop seems like a pretty significant increase all at once. Much more than the normal 5-10%. I am thinking about cancelling just because they just pretty much did this without asking me. A 5-10% increase could be seen as business as usual but 20%? But when I signed up a few years ago it was $79.00 so I can see how that guy JB is one of the richest SOBs in the world.

So, not disagreeing with you about disliking the price hike, but that certainly was almost certainly not directly influenced at all by this facility.

[jonny d]

I already felt a ripple. They sent me an email letting me know that my Prime membership went from $99.00 to $119.00. So I am thinking that us Prime members are paying for construction of their new facility. $20.00 a pop seems like a pretty significant increase all at once. Much more than the normal 5-10%. I am thinking about cancelling just because they just pretty much did this without asking me. A 5-10% increase could be seen as business as usual but 20%? But when I signed up a few years ago it was $79.00 so I can see how that guy JB is one of the richest SOBs in the world.

Not sure if serious. But you're right, that increase is only for OKC members... /s

[josh]

Amazon is increasing the price for Amazon Prime nationwide. Everyone is going to pay more per month/year.

[soonerguru]

BTW, in just the last month the Oklahoman has included this line in each of 4 or 5 stories about Amazon:



That facility opened in October of 2017; it's been almost 8 months.

They held big job fairs in the summer to get staffed up, opened in October and we posted photos of Gov. Fallin cutting the ribbon on October 24th, 2017.

Here is a recent photo I took:

Lulz

[Mr. Blue Sky]

Will the incentives ever end? Something is very wrong when a company like Amazon can qualify for incentives. The founder/CEO, Jeff Bezos, is worth 134.5 billion dollars. I mean, really. Financial giveaways from local taxpayers to a company like Amazon is laugh out loud crazy. It does show just how out of control these handouts are.

These centers cost 200 Million to build. Bezos could build five of these things by himself and still be worth 133.5 billion dollars. The math is crazy that allows a CEO to have that much wealth while asking for giveaways. It has to stop somewhere, somehow.

[mkjeeves]

Will the incentives ever end? Something is very wrong when a company like Amazon can qualify for incentives. The founder/CEO, Jeff Bezos, is worth 134.5 billion dollars. I mean, really. Financial giveaways from local taxpayers to a company like Amazon is laugh out loud crazy. It does show just how out of control these handouts are.

These centers cost 200 Million to build. Bezos could build five of these things by himself and still be worth 133.5 billion dollars. The math is crazy that allows a CEO to have that much wealth while asking for giveaways. It has to stop somewhere, somehow.

He could build five with his own money and still be worth 134.5 billion. He would have to give them away to lose a billion.

[OKCRT]

Not sure if serious. But you're right, that increase is only for OKC members... /s

Pretty sure the -price hike was just for OKCTalk members

But the fact remains that the guy is so rich and doing so well and he's hiking prices along with milking the public just because he can. Nice guy

This guy has so much money his great grandchildrens great grand children will want for nothing. He could make every man woman and child in OK an instant millionaire and still have more money than he could ever spend. But yet he needs more.

[Bunty]

He could build five with his own money and still be worth 134.5 billion. He would have to give them away to lose a billion.

It's not a matter of how huge the amount of worth Bezos has. Instead, it's a matter of how many millions or billions Amazon can spend on itself. How much is that?

[bombermwc]

We dont get free shipping and cheaper prices on amazon because he builds things on his own dime, or because he pays his employees well. There's a trade-off here. So as long as you're ok with buying on Amazon, then you're ok with them offering crappy pay part-timer non-benefit jobs. As long as you continue to buy on Amazon, then you're ok with tax incentives, and really anything else they do. I'm not really sure why it's a surprise here to so many people. Did you think he was making millions by giving things away?

For the record, yup, i still buy on Amazon and im still a Prime member.

[Pete]

Amazon actually pays full benefits on almost all their jobs, including these at fulfillment centers.

[BBatesokc]

Don't know if this was posted previously, but I found it to be an interesting read....

What Amazon Does to Wages - Economist.com 1/20/2018

Again, maybe it's been discussed already (I haven't read all of this thread) - what percentage of warehouse workers are part-time vs. full time?

[onthestrip]

I feel neutral about giving amazon incentives.

Same here. I dont like that most of the jobs are low wage too. But look at the overall investment for construction of one of the biggest buildings in the metro, along with the large amounts of ad valorem dollars that will come in annually, $1.7M is not very much compared to what we will get. Certainly a better deal than other past incentives or TIFs, such as Wheeler.

[Pete]

^

I'm not sure the $1.7 million is all they will be getting from the city and state.

Also, this money will be borrowed by the city and paid upfront, so the actual cost is close to double that.

[BoulderSooner]

^

I'm not sure the $1.7 million is all they will be getting from the city and state.

Also, this money will be borrowed by the city and paid upfront, so the actual cost is close to double that.

The money is being borrow for economic development (which was voted and passed by the public). No matter if it goes to this project or not This type of deal is why we have that money