While empty Amazon warehouses litter the nation, the online mega retailer insists their Johnston distribution center will open as planned. And the company plans to hire “more than 1,500” local job-seekers.
“We’re committed to launching our fulfillment center in Johnston and claims to the contrary are incorrect,” Amazon spokesperson Caitlin McLaughlin said Wednesday morning. “Construction is ongoing at this facility, and we’ll provide a launch update once work is complete. We have great relationships with Governor McKee, Mayor Polisena, and local community organizations in Johnston, and will work together to hire more than 1,500 employees closer to opening.”
Construction wrapped on a blue and white building — a much smaller version of the behemoth perched off Hartford Avenue overlooking Johnston — in Marriott-Slaterville, Utah, last year. Following a plunge in profits post-pandemic, Amazon has yet to open the Utah facility, and it sits empty as locals await the creation of 500 promised jobs, according to a March 25 story in the city’s local newspaper, the Standard-Examiner.
In September 2022, the Des Moines Register reported on two warehouses that were sitting idle, long past promised opening dates, in Council Bluffs, Iowa and Papillion, Nebraska.
Although delayed, they eventually opened.
“The Papillion, Nebraska fulfillment center opened in January 2023,” according to an Amazon spokesperson.
According to a Jan. 17 story in the Nebraska Examiner, the opening “came later than the originally projected 2022 date, but sooner than the 2024 date that officials last year said was more likely due to ‘supply chain issues.’”
“The Council Buffs, Iowa sort center is currently serving as a supplemental fulfillment center and began limited operations in late 2022,” according to an Amazon spokesperson.
Also in September of last year, Bloomberg News reported that “Amazon.com Inc., determined to reduce the size of its sprawling delivery operation amid slowing sales growth, has abandoned dozens of existing and planned facilities around the US, according to a closely watched consulting firm.”
Amazon has erected buildings, but nixed openings, across the country and abroad.
“MWPVL International Inc., which tracks Amazon’s real-estate footprint, estimates the company has either shuttered or killed plans to open 42 facilities totaling almost 25 million square feet of usable space,” Bloomberg News reported. “The company has delayed opening an additional 21 locations, totaling nearly 28 million square feet, according to MWPVL.”
Amazon pushed back on the MWPVL report.
“MWPVL’s data is inaccurate — it says we’re selling or abandoning land or buildings that we’re keeping, or buildings that we never had in our possession to begin with,” according to an Amazon spokesperson. “Articles that include MWPVL’s data can serve to mislead readers.”
For now, Johnston’s mayor is optimistic Amazon will deliver on the promises made to the town in exchange for a tax deal.
“As to the other cities you reference, I don't know how their agreements are structured, but I wish them good luck and hope it all works out for them,” Johnston Mayor Joseph Polisena Jr. said Tuesday. “I remain intensely and solely focused on the future of my Town and its families.”
Once finished, the Johnston Amazon facility would be the largest building ever constructed in the Ocean State, according to Jeff Miller, executive vice president of investments for the Rhode Island Commerce Corporation (Miller made the statement in a September 2021 Commerce Corp. meeting where Johnston was awarded a $1.5 million reimbursement after qualifying for Rhode Island’s Tax Stabilization Incentive program).
Whether or not Johnston has received the $1.5 million payment, and into which town fund it was (or will be) deposited, was unclear Wednesday afternoon as the Sun Rise went to print. The question was asked of Mayor Polisena Jr., but not answered before this week’s print deadline.
Polisena Jr. served as Vice President of Johnston Town Council when the Community Partnership and Tax Stabilization agreements were signed between the town and Amazon.
He said the town is protected financially even if Amazon decided not to open the Johnston facility.
“The Tax Stabilization Agreement between the Town of Johnston and Amazon commences on Jan. 1, 2024,” Polisena wrote via email Tuesday evening. “It is not contingent upon ‘operating at substantial full capacity.’ While there is absolutely no support for a hypothetical question about what happens if the Tax Stabilization Agreement did not commence on Jan. 1, 2024, please remember that the property owner will be responsible for paying taxes based on the full value of the property as opposed to a lesser stabilized amount.”
Multiple planned payments to the town are attached to the Tax Stabilization Agreement (and should go into effect, whether the Amazon facility opens or not): $582,500 per year to fund a Johnston High School Pathway Program (for 20 years, totaling $11,650,000); $400,000 toward starting up the Pathway Program; five payments to the state totaling $1,250,000; $5,380,000 over 10 years toward public safety operations; $2,750,000 toward the state's Small Business Assistance Program (SBAP).
“Pursuant to the Community Partnership Agreement (those) payments are mandated effective Jan. 21, 2024,” Polisena said. “This means that the expected revenue from these agreements will be completely available to support the School Building Project for our Town's children and their families.”
Can these funds be used toward school construction, rather than the specific programs described in the agreement? That follow-up question was asked but remained unanswered at press time.
Polisena and his father, former Mayor Joseph M. Polisena, both promised taxpayers that payments from the Tax Stabilization and Community Partnership agreements with Amazon would more than cover the bond payments funding a town-wide school facilities overhaul (voters passed a $215 million bond referendum last year). That project has been plagued by soaring interest rates and construction costs (current estimates peg the total price tag for three of the previously proposed four school building projects at $50 million over original estimates).
If those payments Amazon’s payments were to falter, a domino effect could lead to unfunded school bond payments (and ultimately, a tax increase). Both mayors Polisena promised the bond would not lead to a property tax increase for Johnston residents.
According to the current administration, whether the building opens for business or not, Johnston will receive a series of promised payments.
“This means that the Johnston High School Pathway Programs will have the benefit of a dedicated robust funding source so that Johnston High School students will have the opportunity to participate in the finest pathway programs offered in the State of Rhode Island,” Polisena said.
Workers at the Hartford Avenue site have shared worries that construction will wrap, but the building may sit idle, like numerous other Amazon warehouses.
“With respect to the hardworking men and women engaging in the construction of the project at the Amazon site, I am not sure they can speak for Amazon Corporate or have a full appreciation of the magnitude of the benefits that our schools, their students, and all taxpayers of the Town will experience from these agreements,” Polisena wrote.
Some payments to the town do have stipulations attached, like “one year subsequent to the facility operating at substantially full capacity” and “one year subsequent to the commencement of full delivery operations within the facility,” meaning that they are contingent upon opening the facility (a delay in opening may delay these payments): $100,000 to the town for traffic mitigation study; the $1,000,000 for traffic mitigation equipment and improvements; the three (minimum) hiring events and hiring of the promised 1,500 employees; $50,000 to Johnston youth sports; $100,000 to the Johnston Senior Center; $250,000 to the Johnston Municipal Land Trust; $100,000 toward Johnston Memorial Park.
Asked simply, “Will the opening of the Amazon facility be delayed?”
Polisena replied: “I cannot speak for a private company and their business decisions. I am here to assist, coordinate and expedite if help is needed, like I would for any other incoming business to Johnston.”
So far, McLaughlin, Amazon’s spokesperson, has only said the “completion date … is scheduled for second half of 2023.”
An Amazon spokesperson stressed, that “while we have delayed the launch of some buildings, we are also opening buildings on a regular basis.”
He provided several examples of new buildings celebrating openings or hiring from the past six weeks: North Pekin, Illinois; Woodland Park, New Jersey; Detroit, Michigan; and Tracy, California.
Prior to opening the Johnston site, Amazon has pledged to hold at least three hiring events to fill the 1,500 positions. No job fair dates have yet been set.
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