Amazon’s job promises bring out skeptics

A worker sorts boxes before loading them onto trucks for shipping at Amazon’s fulfillment center in Nevada.
A worker sorts boxes before loading them onto trucks for shipping at Amazon’s fulfillment center in Nevada. Bloomberg News

Amazon has been expanding warehouses and other projects across the country, collecting millions of dollars in financial incentives along the way in exchange for jobs and investments.

That doesn’t always make everyone happy.

Business and economic development leaders usually do everything they can to land the giant online retailer – as the enthusiastic response to the company’s recent invitation to make a pitch for its second headquarters makes clear – while free-market advocates tend to oppose them.

Opposition comes from both sides of the political aisle. In 2015, the N.C. Justice Center, which advocates for equitable economic policies, issued a report finding that more than half of the companies that received incentives had failed to deliver the jobs, investments or wages they had promised during previous administrations.

This month, the state chapter of Americans for Prosperity criticized Gov. Roy Cooper for backing “corporate welfare” in trying to lure Amazon.

President Donald Trump even chimed in with a tweet: “Amazon is doing great damage to taxpaying retailers,” he wrote. “Towns, cities and states throughout the U.S. are being hurt – many jobs being lost!”

State commerce officials say incentive grants pay for themselves in net revenue, as they are paid out over time and based on meeting performance standards.

Earlier this month, Amazon announced it will spend $5 billion in construction and hire up to 50,000 high-paying jobs for a second headquarters, in addition to its current one in Seattle.

On Sunday, Sept. 17, The Tennessean newspaper reported that it was unclear if Amazon had fulfilled its job promises in that state. It found the company had fallen short of commitments in three of five facilities in Tennessee after being awarded $30 million in property tax breaks. But the paper noted some of the facilities might not have missed their deadlines.

In a column on Sept. 22, the Chicago Tribune’s Robert Reed, citing Amazon’s proliferation of warehouse expansions in Illinois, suggested the company is so profitable it doesn’t need incentives and is likely to locate wherever it wants regardless of tax breaks. Amazon is receiving almost $13 million in tax incentives over 10 years from Illinois in return for creating at least 1,000 new jobs.

In North Carolina, last month, it was announced that Amazon will open an $85 million distribution center in Kannapolis, with at least 600 full-time jobs. It also has distribution center in Concord, where in 2015 it employed 360 people, according information from the N.C. Department of Commerce, and a receiving center in Charlotte.

Last year, the company signed leases for warehouse space in Durham and Raleigh. The Raleigh site is the local base for Amazon Prime Now, the same-day order and delivery service.

Amazon has begun operating a wind farm in the northeastern part of the state. It has more than 2,000 employees in North Carolina, according to its website.

None of the North Carolina projects received state incentives, a state commerce spokeswoman said, so Amazon isn’t obligated to set and reach hiring goals, although it has hundreds of employees at the Concord and Charlotte facilities.

The city of Kannapolis threw in a three-year grant that will total $562,275, or 85 percent of the personal property taxes paid by the company during that time, The Charlotte Observer reported.

The state Department of Transportation has committed $2.7 million in economic development funds to pay for access and road improvements at the Kannapolis site, a spokesman said.

Craig Jarvis: 919-829-4576, @CraigJ_NandO