Amazon is coming to Newport, but at what cost? (Answer: $4.5M) - Technical.ly Delaware

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Feb. 24, 2020 4:02 pm

Amazon is coming to Newport, but at what cost? (Answer: $4.5M)

The corporate giant's fourth location in Delaware is coming, but not without controversy.
A thousand more Amazon jobs are coming to Delaware.

A thousand more Amazon jobs are coming to Delaware.

(Photo by Christian Harrison with Creative Commons license)

Update: Comment from Damian DeStefano, chair of the Delaware Economic Development Authority, has been added. (2/25/20, 11:26 a.m.)

The old General Motors plant on Boxwood Road in Newport will officially become an Amazon warehouse — and not everyone is happy about it.

Last week, it was reported that Amazon requested a $4.5 million state grant (paid for by Delaware taxes) via a Delaware Strategic Fund proposal from the Delaware Economic Development Authority’s Council on Development Finance to move to Newport, becoming the fourth Amazon location in the state, after a longstanding warehouse and a truck yard in New Castle and a warehouse/distribution center in Middletown.

The Council voted on Monday to grant the funds to the mega corporation, according to Delaware Business Now. The cost of the 3.7 million-square-foot fulfillment center will be about $250 million and will bring 1,000 jobs to Delaware, bringing the non-holiday season total of Amazon employees in the state to about 3,500. The total economic impact of the project is estimated to be $445 million.

The full proposal, acquired by Delaware Online/The News Journal via a public records request, is available online. The amount of aid granted, as laid out in the proposal, is tied to the number of jobs a company brings to Delaware.

The Delaware Strategic Fund, a division of the Delaware Prosperity Partnership (DPP), was set up bring jobs to Delaware through job creation, expansion and relocation of businesses to the state. Delaware Business Now reported that State Rep. John Kowalko criticized the DPP for lack of transparency in its request on behalf of Amazon, calling it “corporate welfare.”

In response, DPP President Kurt Foreman told Delaware Online that “he thinks his organization’s business-seeking process is transparent enough”:

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“Our job is to get people looking at Delaware, and I don’t think we need to share who’s looking at Delaware,” Foreman said. “If a company stops looking at Delaware, I don’t think that matters. And a company that does look at Delaware, eventually, they are talked about. … We’re here to help them do their homework.”

Several other locations in the region were rumored to be vying for the project. The Boxwood Road distribution center follows a string of failed projects for the site, which was for decades a major employer in the area as a GM auto plant. The last autoworkers at the site were let go in the late 2000s.

In 2017, Delaware was among the many places that made an unsuccessful pitch for Amazon’s second headquarters; the details of any tax breaks or other incentives were not disclosed.

We’ve reached out for comment from DPP and received this statement from Damian DeStefano, chair of the Delaware Economic Development Authority:

“We are excited Amazon is choosing Delaware for the company’s new fulfillment center,” DeStefano said. “The 1,000 new jobs being created will have a positive impact not just on the families of those working at the facility but on the state as a whole. It is also great to see the the old Boxwood Road GM plant being reborn. As with most large economic development projects, we had competition from other states for this investment. Tools like the Strategic Fund ensure that we continue to win these opportunities.”

We want to know what you think about Delaware’s newest Amazon location and the Council on Development Finance’s decision: You can @ us on Twitter, or email delaware@technical.ly.

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