Ecommerce stores warehouse

Empty Amazon warehouse in Hamburg comes under scrutiny for tax breaks | Business premises

As seeks more than $124 million in tax breaks for huge distribution center in Niagara County, e-commerce giant faces scrutiny in Hamburg for warehouse that was completed in March but remains empty – although the company got almost $7 million in tax breaks for this small project.

Workers spent 11 months constructing the 181,500 square foot building at the intersection of Lakeshore and Bayview Roads, and completed fitting out the $47.2 million facility complete with shelving, shelving and other equipment necessary for its operation.

But Amazon has yet to occupy the warehouse and did not give a specific date as to when it plans to do so. Amazon officials did not respond to requests for comment on Friday.

“It’s finished. It’s fitted out. But they haven’t moved in yet,” said Sean Doyle, executive director of Hamburg’s Industrial Development Agency. “It’s a concern. We’re monitoring it.”

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Hamburg’s IDA had approved a $6.85 million package of sales, mortgage registration and tax relief for the project in February 2021. The company has pledged to employ at least 100 workers within two years of completion – 50 full-time and 50 part-time employees. timekeepers – but has not hired any yet.

However, Amazon has until March 2024 to meet this goal, or face potential clawbacks in the event of a breach of contract. The 10-year payment in lieu of taxes on the property does not begin until 2023.

“They’re compliant,” Doyle said. “They’re in that period where you have two years after project completion to achieve full employment.”

Amazon has been expanding aggressively for several years, capitalizing on the massive increase in online sales and consumer demand for home delivery during the Covid-19 pandemic. It has doubled its warehousing capacity in the United States since the end of 2019, to 387.1 million square feet, with more than 1,200 fulfillment centers.

But that expansion has now outpaced its slowing retail business. The company admitted earlier this year that it now had too much space, which contributed to excess costs in the first quarter and its first quarterly loss in seven years. So it’s subletting 10 million square feet of warehouse space and cutting spending on new facilities, while halting or delaying work on at least 16 projects nationwide.

Doyle, however, did not say that was the case in Hamburg and even speculated that the project could have been completed earlier than the company had expected, given the well-documented supply chain issues. in building materials. He said Amazon officials would provide updates to the IDA board at its Aug. 17 meeting.

“Last time I spoke to them, they’re fully engaged,” Doyle said.

Amazon is paying rent to the developer and working on the final details, including activating all 250 electric vehicle chargers, he said. He added that the company had planned to occupy the warehouse by the December holidays.

“I don’t see that happening, just practically,” Doyle said.

In the meantime, Doyle said, the company and its developer — Bayview Road Associates, a subsidiary of Frank Campofelice’s Walden Development Group — have hit construction spending and employment targets, generating about $13 million in payrolls. for construction work, with 84,000 local labor hours. work. Amazon and Bayview also obtained sales tax exemptions of more than $1.314 million on purchases of equipment and materials.

So, combining wages and tax revenue so far, he explained, the project has produced $9 in economic benefits for every $1 in incentives.

“At this point, we’re just watching him,” Doyle said. “The project is compliant. And so far it’s been a success in terms of local labor.”

Located in the Lake Erie Commerce Center and designed by architectural firm Gensler, the new site was built on 57.4 acres of land owned by Walden, across from a FedEx Corp distribution center. which was built several years ago. The project has been supported by construction unions, but criticized by community and labor activists such as the Coalition for Economic Justice and State Sen. Sean Ryan, D-Buffalo.