Carney: Amazon may bring more than 1K jobs
NEWPORT – Gov. John Carney believes that Amazon may bring more than the 1,000 jobs promised to their future fulfillment center at the former General Motors Boxwood plant.
Amazon was the subject of a heated Council on Development Finance (CDF) meeting Monday, Feb. 24, which saw it approved for $4.5 million in taxpayer-funded grants. Although the bulk of that money would be paid to the trillion-dollar e-commerce giant for creating 1,000 jobs at the five-story distribution center to be built near Newport, Carney told Delaware Business Times that he believes that total will be exceeded after talking with the project’s developer, Nevada-based Dermody Properties.
Carney said Monday that he heard from Dermody that like-sized facilities for Amazon around the country employ more than 1,000, and he believes the total announced employment may be lower than what will materialize in order for Amazon to keep the grant’s funding metrics lower.
“That thousand was what they committed to as part of the CDF [grant],” he said, noting that the Strategic Fund grant incentives are tied to that benchmark figure. “If you commit to a higher number [and you don’t keep them], then there’s a claw-back. So, they don’t want to over-extend.”
Kurt Foreman, president and CEO of the state’s private-public economic development agency, the Delaware Prosperity Partnership (DPP), told DBT that he had likewise heard of Amazon facilities with larger employment levels.
“Can it be bigger? Certainly it could, but [1,000] is what they’re committing to at this time,” he said. “If they end up creating 1,200 or more jobs that’s even better for Delaware.”
Similar examples of Amazon facilities utilizing robotics around the country back a belief of more jobs on the horizon. One in Charlotte is to employ about 1,500, while a facility in Robbinsville, N.J., employs about 4,500, according to local officials. Like Delaware, both of those facilities were landed with the help of incentive packages, according to media reports.
Notably, Jeff Zygler, senior vice president of national development for Dermody, told a New Castle County board in November that employment at the facility, which will be known as the LogistiCenter at I-95, would range between 1,000 and 2,000 people.
Amazon is well-known for hiring hundreds of extra temporary workers in its seasonal push for distribution around the Christmas season, but Carney said he believed full-time employment would exceed 1,000. The company already employs about 2,500 people at fulfillment centers in Middletown and New Castle, as well as at a New Castle truck yard.
According to Amazon’s CDF application, the company plans to create about 50 managerial positions earning a minimum of $60,000 annually and 950 associate jobs, earning between $31,200 and $33,000 annually, at the 3.7-million-square-foot, five-story Newport facility.
Although Amazon is still negotiating the terms of its grants with the Delaware Economic Development Authority, similar such deals have allowed annual payments for eligible positions created. The employer only gets paid a one-time incentive for jobs created and held for the lifetime of the agreement. Should the job be eliminated before that time, the employer would be required to repay any funds gained from it.
This isn’t Amazon’s first time seeking public funds in Delaware, as it received a $3.47 million Strategic Fund grant package in 2012 for its Middletown fulfillment center. Those funds were tied to the creation of 849 jobs at the Middletown facility, which it satisfied and exceeded.
Unlike the 2012 funds, which required that Amazon keep its employment level in Middletown at 849 full-time employee for at least 90 days, Delaware Division of Small Business Director Damian DeStefano said Monday that the state would seek to require Amazon to hold the positions for at least four years beyond the end of the agreement’s term. Officials told DBT that would likely push the potential claw-back period to 2026.
For now, Carney told DBT that his administration was concentrating on connecting local tradesmen and construction workers to Dermody to make sure they get a piece of the $200 million project.
“We’re focused on making sure we get Delawareans working on that project in terms of construction. I had a good conversation with the developer today about that. They’re eager, they’ve got a timeframe to be met and the local workforce is the most important part of that,” he said.
Although the project had its fair share of critics during its CDF hearing, including some state lawmakers, Carney said he stood behind the allocation of the funds.
“People can say what they want, but until everybody stops giving incentives I’m going to compete,” said Carney, who co-chairs the DPP which supported Amazon’s request. “I want Delaware to compete, and we do with New Jersey, Maryland and Pennsylvania in this logistics sector.”
Foreman, of DPP, said that Delaware was competing with neighboring states in securing the Amazon facility, something that is common in its efforts to attract new employers.
“When you’re 10 minutes from Cecil County, Maryland, and 20 minutes from Chester County, Pennsylvania, you’re always going to have to compete,” Foreman said, noting he was not aware of details of any other incentive packages that may have been offered to Amazon. “Because there is such a complex network of centers for Amazon, they’re always evaluating dozens and dozens of spots for future locations. We happened to be among them.”
Foreman echoed Carney is noting that incentive packages, like those from the Strategic Fund, help to put Delaware over the top in such economic development competitions. He emphasized that it wasn’t free money but required detailed benchmarks in job growth or capital expenditure to be met.
“We view it as, how do we make the good choice an even better choice? A bad spot doesn’t get better just because of an incentive,” he said.
Carney said that the most important aspect of the Amazon debate to remember is that the state is gaining at least 1,000 new jobs, which carry with them transformative power for individuals and families.
“At the end of the day, the most important part of my job is to work with our elected officials to create an environment where these businesses can be successful,” he said. “If you think of everything that we do, it starts with a good job for an individual and a family. You can’t do that unless you have good schools so you have that quality workforce where the employees want their kids to go … I see all of the priorities connected,” he said.
By Jacob Owens