The Council on Development Finance unanimously approved a $4.5 million Strategic Grant for Amazon Services.
The company is proposing a multi-story 3.7 million-square-foot fulfillment center in a portion of the former GM Boxwood plant site near Newport. The center is slated for completion in late 2021 or early 2022.
The price tag for the project is a quarter of a billion dollars, with the company employing 1,000 full-time positions. The site will make greater use of robotics, although Amazon officials do not see a reduction in jobs as robots go online.
The company already employs 2,500 persons full-time in Delaware at sites in New Castle and Middletown. That total swells past 3,000 during holiday periods
The $4.5 million would include $3 million based on jobs created and $1.5 million for capital costs in the quarter of a billion-dollar project.
The total economic impact of the project is estimated at $445 million.
Amazon issued the following statement following the vote by the Council on Development Finance:
“There are a lot of contributing factors that go into our thought process on where to place a new fulfillment center. Most importantly, we want to make sure a fulfillment center is placed to best support our North American logistics network to ensure we can offer great selection, competitive prices and the great Prime service and fast shipping speeds we know our customers love. Receiving incentives and support from local and state governments is a standard practice when a company plans a large investment. Every state and big city has economic development offices or similar entities working to attract private investment to their region, and incentives linked to job creation are one of the mechanisms they use to do so. By securing support for our facilities in a comprehensive manner, it allows our company the ability to reinvest in more locations due to the material cost savings achieved through programs like the Delaware State Strategic Fund.”
Dermody Properties, the developer of the site for Amazon, did not request property tax abatements or other incentives. Dermody acquired the site from Harvey Hanna and Associates, Newport.
The site is already being prepared for the construction of the fulfillment center, with concrete slabs removed.
A number of people spoke for and against the project, with criticism leveled at the developers, the lack of union workers involved in the demolition of the project.
One construction worker said he is unemployed, but claimed that out of state workers being hired. Another opponent said the $15 an hour starting wage that is paid by Amazon is not a living wage.
“Enough is enough,” State Rep. John Kowalko said in lengthy prepared remarks. Kowalko criticized the Delaware Prosperity Partnership for not being transparent in its request on behalf of Amazon. Kowalko called the proposal “corporate welfare” and took aim at Amazon founder and CEO Jeff Bezos for seeking money. Bezos is one of the world’s richest men.
The Delaware Prosperity Partnership is a public-group charged with retaining and adding jobs in Delaware. It has been under fire for what critics see as a lack of transparency.
State Sen. Anthony DelCollo, R-Marshallton, said he would like to see more communication with the surrounding community regarding the project. DelCollo has constituents in the area of the plant
The performance grant money is allocated by the Delaware General Assembly. Payments are not made upfront but are paid when a project reaches set employment and spending goals.
Clawback provisions are in place in the event that Amazon reduces its presence or pulls out of the state. Employee transfers from Middletown or New Castle would not count towards the 1,000 jobs at the Boxwood site.