Aug 7
2023
No action on Amazon’s warehouse in Niagara
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One year after winning $124 million in tax subsidies from the Niagara County Industrial Development Agency, Amazon has taken few steps to build its promised 1,000-employee warehouse in the Town of Niagara.
On Monday, the 217 acres of land along Lockport Road where Amazon plans to build its three-million-square-foot facility remained vacant. No earth had been moved, no stakes were in the ground. No construction equipment was present.
In response to the delay, the IDA is now poised to grant Amazon a six-month extension on its subsidy package. The extension — which the IDA’s board will consider Wednesday — indicates that neither Amazon nor the property owner, Gotham Homes 18, LLC, have entered into legal agreements with the IDA to begin taking advantage of the tax breaks. The resolution makes the tax breaks good through Feb. 10 of next year.
Those tax breaks include $94 million in property tax abatements over 15 years, a $26 million sales tax exemption and a $3.5 million mortgage tax break. The package was the sixth largest Amazon has secured for its facilities, according to Good Jobs First.
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It was August 10 last year when the IDA unanimously approved the subsidy package for Amazon, despite considerable public opposition to the project. Residents protested the expected truck traffic on Packard and Lockport roads, noise from the warehouse and the size of the subsidy package.
In a statement responding to the current delay, Amazon spokesperson Steve Kelly said the company is “[continuing] to work closely with all stakeholders as plans progress” for its Town of Niagara facility and that the extension is “administrative in nature.”
“The status of the project remains the same,” he said. “We are grateful for the support of the town and the Niagara County IDA.”
Kelly noted that Amazon recently purchased the land it plans to build on. Niagara County property records, however, do not reflect the purchase.
IDA leaders did not respond Monday to a request for comment about the extension.
According to IDA records, construction of the facility is expected to employ more than 2,600 workers. The company would then hire 1,000 workers over two shifts to operate the warehouse. The company listed pay for those jobs at $15 per hour, slightly more than Western New York’s $13.20 minimum wage. The facility would be a “first mile” distribution center, meaning it will take in bulk goods and repackage them to send to other Amazon warehouses.
If the project proceeds, the property tax abatements would largely come at the expense of the Niagara Wheatfield Central School District.
The first seven years of the 15-year payments-in-lieu-of-taxes agreement will be structured like this:
- Amazon would make an annual payment of $660,491 to the Niagara-Wheatfield Central School District. Without the tax break, the schools would receive $6.6 million annually.
- The company would make an annual payment of $215,679 to Niagara County. Without the tax break, the county would receive $2.16 million annually.
- Finally, Amazon would make an annual payment of $77,113 to the Town of Niagara. Without the abatement, the town would receive $771,000 annually.
After year seven, Amazon will make larger PILOT payments to each government entity until it pays its full tax bill in year 16.
In a May interview, Niagara Wheatfield district leaders said they were torn on the project and the PILOT agreement. On one hand, Superintendent Daniel Ljiljanich said, the vacant land today only generates a few thousand dollars in revenue each year, meaning the PILOT payment is a marked improvement.
On the other hand, he and board president Steven Sabo said the district could always use additional revenue for things like coaches, building safety and summer programs.
“That would be ideal for districts,” Ljiljanich said, “if the PILOTs impacted the municipalities, but not the school districts.”
In a statement, State Senator Robert Ortt said the Amazon warehouse “will be a massive boost to our local economy” once it’s built.
“However, it is important that any agreement in place regarding these jobs and the timely manner in which they are created is fulfilled, and I trust the Niagara County IDA to do its due diligence in bringing this project to fruition,” Ortt said.
Amazon’s delay in Niagara County comes as the company has pumped the brakes on new warehouses and other facilities around the country, following an aggressive, pandemic-era expansion. The company has closed other facilities. In March, the news outlet Retail Drive reported that Amazon warehouses in Hamburg and Rochester were among the facilities the company was delaying on opening.
The delay in Hamburg has rankled state and local leaders. At a press conference last month, Assemblymember Jonathan Rivera and Hamburg Supervisor Randy Hoak called out the Hamburg IDA for granting tax breaks and Amazon for dragging its feet. Hoak said he was particularly bothered by Amazon’s delay and said the town is considering legal action.
“What I know for sure is that if these jobs aren’t in Hamburg by the spring of 2024, then the Town of Hamburg and our legal team is going to have to make some difficult decisions [about] how we proceed from there,” Hoak said.
Kelly said the company “appreciates the working relationship we have with the Town of Hamburg” and said it expects to open its 100-worker Hamburg facility in the “coming months.”
“The leadership team for this facility is in place and we expect to start general hiring for this facility soon,” Kelly said in a statement.
Editor’s note: This story has been updated with additional comment from Steve Kelly and Senator Robert Ortt.
