Politics & Government

Charlotte supports millions for Amazon, but doesn't know how much new jobs will pay

Amazon is building a new distribution center north of Charlotte Douglas International Airport. The city said the center will create 1,500 new jobs, but it doesn't know how much they will pay.
Amazon is building a new distribution center north of Charlotte Douglas International Airport. The city said the center will create 1,500 new jobs, but it doesn't know how much they will pay. AP

The Charlotte City Council last month applauded when it approved millions of dollars in incentives to bring an Amazon distribution center near the airport, along with 1,500 jobs.

But a review of documents and closed session minutes about the project shows Amazon has not told the city how much the jobs will pay. The city still does not know.

The city told council members that Amazon is building eight new high-tech distribution centers across the country, and that 12 cities are competing for the centers.

Amazon will build one of the eight sites on a 100-acre piece of land north of Charlotte Douglas International Airport. The city expects Amazon to move quickly, with the building open by late 2019.

City officials told council members the project will bring 1,500 entry-level jobs, and that the positions will be full-time with benefits. The city also said Amazon could give the employees quarterly bonuses and stock options.

City officials said market rate for a similar job is between $13 and $14 an hour, which would be between $27,000 and $29,000 a year. City officials said they have been told Amazon pays more than market rate, though it said no one associated with Amazon has told them how much that would be.

Amazon did not respond to requests for interviews about the center.

Democratic council member Greg Phipps said he thought city officials gave him and his colleagues information about salaries.

"(Salaries) are always part of the discussion," Phipps said about offering incentives. "But I don't recall one way or another. If it didn't come up as a flashpoint (during the closed session), it leads me to think we saw ranges and it's within our goals."

But the closed session minutes on April 9 and 23 don't mention any information about how much the jobs would pay.

Large factory investment

In many cases when Charlotte offers incentives for a company to relocate or expand in Charlotte, the company is required to give detailed information about wages. In the case of Chiquita, the city and county stopped paying incentives when the company announced it was leaving Charlotte.

But in this case, the city tied the incentives to the company's expected $200 million investment in a new warehouse and high-tech equipment. The city said the center will "incorporate robotics, conveyors, and state of the art equipment."

Amazon's developer — Seefried Industrial Properties — will be reimbursed for improvements and changes to Tuckaseegee Road; creating a new extension of Todd Road; and making improvements along Wilkinson Boulevard.

The airport will reimburse the company $4.4 million for the road work.

The city and county will reimburse them $9 million over 10 years.

The N.C. Commerce Department is not offering Amazon incentives for the new distribution center.

After paying out the money to Amazon, the council's presentation showed that the city and county would receive a total of $11 million in new property taxes over the next decade.

However, the 1,500 new employees will need government services, such as schools for their children, parks to play, new police officers and new roads. If they live in Mecklenburg, the city and county would shoulder much of those costs.

If someone took an Amazon job that paid $30,000, they might also qualify for low-income housing in the city, adding more strain to taxpayers.

Earlier this decade, Mecklenburg County's economic development office estimated that new jobs needed to pay roughly $60,000 a year to provide more in tax revenue for the county to cover the services the new residents would use.

Amazon is building a 2.5-million-square-foot distribution center north of Charlotte Douglas International Airport. City of Charlotte

The framework of the Amazon deal is not unusual, though $13.7 million is a relatively large incentive.

Five years ago, the city and county reimbursed the developers of Charlotte Premium Outlets $5.1 million for roadwork, and they are also reimbursing developer Peter A. Pappas $4.4 million for roadwork associated with a new mixed-use development he is building near Pearl Park in midtown.

Neither of those projects gave the city detailed information about how many jobs would be created and how much they would pay.

In other instances, developers pay for new roads and road improvements themselves.

Council members who were part of the two closed session discussions in April supported the deal. But Republican Ed Driggs said it could be controversial to give incentives to Amazon, a retail behemoth, according to the closed session minutes.

"I’m just mindful of the fact that we are talking about the richest company in the world and there are those who think that the need to kind of allocate public money to a project of theirs is controversial," Driggs told colleagues. "The owner is worth as much as the entire population of Charlotte combined."

During the two closed session discussions, there was little debate about whether the city should approve the incentives. Most council members asked about things such as whether Amazon might use drones and how the center would impact traffic.

Phipps asked whether Amazon would consolidate its three other Charlotte-area warehouses into the new airport site. The city said it did not expect that to happen.

Incentives for lower-wage jobs

A decade ago, the city's policy was to offer incentives only for jobs that paid at or above the area's median income, which is now about $49,000.

But after the recession, the city loosened that requirement. The city said it would offer incentives to jobs that paid more than similar jobs in the same area.

That has ushered in incentives for lower-wage jobs like call center employees and low-wage manufacturing.

Democratic council member Larken Egleston said he doesn't remember specifics about the Amazon discussion.

"I remember having a sense that this isn't a minimum wage floor-sweeping job," he said. "We didn't have delusions that they were suite jobs either. They might be lower middle class salaries that give people opportunity to learn skills that are applicable to skills outside Amazon."

Steve Harrison: 704-358-5160, @Sharrison_Obs