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Amazon eyes San Marcos for $191M fulfillment center

COVER: Amazon’s 1.25 million-square-foot fulfillment center in Schertz.

Update

8:01 a.m. WEDNESDAY, JULY 22: New story added on San Marcos City Council consideration and approval of Amazon economic development incentive agreement.

All eyes on Seattle after San Marcos council gives Amazon deal unanimous approval | 07/22/15

Earlier

8:13 p.m. TUESDAY, JULY 21:

Earlier

by BRAD ROLLINS

5:36 a.m. MONDAY, JULY 20: Amazon.com executives are considering locating a $191 million fulfillment center on East McCarty Lane in south San Marcos, a project that would carry the promise of at least 350 full-time jobs, according to terms negotiated between company and city officials.

On Tuesday, the San Marcos City Council will consider an economic development incentive agreement under which the city would forgo 40 percent of property taxes on Amazon’s real estate for ten years and 85 percent of property taxes on equipment and inventory, also for ten years. In addition, for 20 years, San Marcos would rebate between 15 percent and 85 percent of its 1.5-cent sales tax, according to a sliding scale tied to annual gross sales shipped out of the location.

The Seattle-based company will maintain a payroll of at least 350 full-time workers for the duration of the local incentives. Amazon has an option to renew the property tax portion of the agreement for an additional five years if it employs at least 1,000 full-time workers for five of its first 10 years in operation.

The company will invest $60 million in site preparation and construction of a 855,000-square-foot building on 101 acres located in the 1300 block of McCarty Lane. Company officials say they will spend an additional $131 million furnishing and equipping the fulfillment center and stocking it with inventory.

Under the agreement, Amazon will begin construction before Dec. 31 this year and begin operations by Jan. 1, 2017.

On July 7, the San Marcos City Council gave initial approval for rezoning the property from general commercial to heavy industrial, an application made in the name of of Jones & Carter Inc., a San Antonio-based engineering firm.

Map

CORRECTION 9:53 a.m. JULY 21: An earlier version of this story should have said that the city of San Marcos collects a 1.5-cent per dollar in sales tax, not two cents per dollar.

15 Comments (Open | Close)

15 Comments To "Amazon eyes San Marcos for $191M fulfillment center"

#1 Comment By Jim On 07/20/2015 @ 4:58 pm

This is good for San Marcos. More jobs!

#2 Comment By Maggie M. On 07/21/2015 @ 2:48 pm

The vast majority of these jobs will be minimum wage with no chance for internal advancement. I hope the council will keep this in mind when deciding incentives.

#3 Comment By SMsince95 On 07/21/2015 @ 6:56 pm

Maggie, what are you basing that on?

#4 Comment By Maggie M. On 07/21/2015 @ 8:18 pm

SMsince95: Fulfillment centers are basically huge warehouses where workers shelve, unshelve, and package goods. You can google ‘Amazon’ and ‘labor’ for more details on working conditions. Anyways, these are low-skill, manual-labor positions.

I love Amazon; I’m a prime member. It’s cool that they’re opening a warehouse here, but I’m not sure these are the kinds of jobs we should feel obligated to hand out incentives for.

#5 Comment By SMsince95 On 07/22/2015 @ 5:27 am

I’m skeptical that “the vast majority will be minimum wage”. I doubt Amazon could find decent workers for minimum wage. These seem like decent entry level jobs for our young people. They can learn how to show up on time, get a good reputation and move to something more rewarding. These jobs should not be thought of as careers.

#6 Comment By Tarl On 07/22/2015 @ 6:00 am

Overall, I’m pleased whenever any company throws open its doors here and announces it’s hiring. An Amazon distribution center, however, is a bit of a mixed bag.

According to local news reports airing yesterday, the average distribution center employee earns just a hair under $12 an hour. This equates to between $20K and $25K a year. (More than likely, the true average will trend downward unless Amazon truly schedules most of its employees as full time, which many companies that pay by the hour do not.)

While this isn’t nothing (it’s what I was making when I first left college, though that was — ahem — a few decades ago), I don’t see these employees earning enough to buy a home here, where the median home price is about $160K.

Then there’s the work environment. I came across this article when it first was published, and I rediscovered it this morning. http://www.motherjones.com/politics/2012/02/mac-mcclelland-free-online-shipping-warehouses-labor

Taking all this in, it seems Amazon is displaying its strategic strengths once again. Planted smack dab along the NAFTA Highway, San Marcos is in a great location for a distribution center of any kind, and with Texas State just a 3-iron away, there is a ready supply of able-bodied young people whose class schedules preclude them from carrying a full-time schedule at Amazon. That means lots of part-time employees who are cheaper overall for Amazon than the full-time variety, and a gigantic pool of replacements when burnout or boredom sets in.

Very few career positions, but I’m not convinced that’s a reason to say “no” to the incentives. I mean, these kids have to do something other than fold sweaters at The Gap, am I right?

#7 Comment By Dano On 07/22/2015 @ 7:01 am

Does this mean it’ll still take two days for our Prime orders to arrive?

#8 Comment By Winchester On 07/22/2015 @ 8:11 am

Does the agreement include waiving the ag roll back taxes?

#9 Comment By skeptical On 07/22/2015 @ 11:12 am

There doesn’t seem to be a downside. The taxes they are getting back are those we would never receive if they didn’t build here. It doesn’t seem it is a big infrastructure burden as that side of town has been built up recently.

I hear some wage complaints, but these are the jobs we can fill with our local pool of available employees. We have a lot of $12 talent; nobody is going to come to town and give the same talent $20 or $25 an hour. More importantly, the only folks who will apply are those for whom the job is better than what they have, so it is a win for those selected. Other folks will get to come behind them and take their old $10 job and eventually 350 unemployed folks will be drug into the workforce, which will reduce the burden that the social safety net places on local taxpayers.

#10 Comment By Dano On 07/22/2015 @ 11:44 am

Let me just add that Tarl must hit a pretty mean 3 iron……

#11 Comment By Tarl On 07/22/2015 @ 2:42 pm

Dano, I’m not much of a golfer. Probably because I’m terrible at judging distance, which my 3-iron comment proves…

#12 Comment By Tarl On 07/22/2015 @ 2:43 pm

Also, I agree with Skeptical. It seems like a net gain for San Marcos, so hopefully Amazon will greenlight this one in August.

#13 Comment By Maggie M. On 07/23/2015 @ 12:12 am

Meh…
San Marcos doesn’t need to pay companies to come here (and that’s essentially what tax incentives are); they will come anyways because of our geography and labor force. The New York Times published an interesting in-depth look at incentives a few years back:
http://www.nytimes.com/2012/12/02/us/how-local-taxpayers-bankroll-corporations.html
Part 2 is about Texas and there’s even a subsection on Amazon’s “fulfillment centers”.
Anyways, imo the money would have been better spent on things besides miserable, low-paying jobs. Amazon’s warehouse is no big loss or gain to our community. We should really be focusing on better jobs.
If they end up coming here I hope it means shorter delivery times on prime orders. That *would* be a nice gain (though other local retailers might not think so).

#14 Comment By RB On 07/23/2015 @ 1:48 pm

This could be a boon, but now can we maybe try to attract some jobs for people with college degrees and career plans that involve being able to afford rent and food and medical care?

#15 Comment By Kim Hoffman On 02/02/2016 @ 6:04 pm

when are they going to hire ?where do i apply