San Marcos Mercury | Local News from San Marcos and Hays County, Texas

November 6th, 2012 picks Schertz for major distribution hub

by BRAD ROLLINS, the behemoth Internet retailer, will announce this afternoon it is locating a massive new distribution center in the corridor city of Schertz, passing over San Marcos for the economic development prize.

Site selectors for Amazon had considered property on McCarty Lane and local governments extended an offer of tax incentives to entice the company to build the 1.3 million square foot facility in San Marcos.

Instead, Amazon officials and acting Schertz Mayor George Antuna will announce at a press conference 4 p.m. today that the northeast San Antonio suburb has landed the facility. The center is expected to employ about 350 people with an annual payroll of $11 million.

Amazon was attracted to Schertz’s location straddling both Interstate 35 and Interstate 10 and because FedEx already has a freight service center located there.

Under the agreement, both the city of Schertz and Guadalupe County will forgive 70 percent of property taxes on the facility for three years and 60 percent for three years after that. Guadalupe County will forgive  50 percent of property taxes for an additional two years. The city also agreed to pay $500,000 cash to Amazon and fast-track construction permitting and inspections.

Schertz officials expect the real windfall to lie in sales tax, which Amazon this year began collecting from its Texas customers. After being hit with a $269 million bill for four years of back sales taxes, Amazon cut a deal with Texas Comptroller Susan Combs in April that required it to start collecting 8.25 percent sales tax on website purchases originating in the state as well as invest $200 million in facilities.

Under their economic development incentive agreements with Schertz and Guadalupe County, organized under a part of Texas law called Chapter 380, the city will keep 75 percent of sales tax generated by the fulfillment center and the county will keep 25 percent.

Amazon’s proposed distribution center in Schertz is planned to be more than twice as big as its shuttered fulfillment center in Irving, which was less than a half-million square feet.

In a major adjustment to its business model, Amazon is spending billions of dollars nationally to locate distribution centers in urban areas as part of it strategy to offer same-day delivery to most online customers, the Financial Times reported in July.

Observers said if Seattle-based company achieves its objective, it would mark a triumph of digital commerce over bricks-and-mortar merchants, both locally owned and big box.

Slate technology columnist Farhad Manjoo wrote, “It’s hard to overstate how thoroughly this move will shake up the retail industry. Same-day delivery has long been the holy grail of Internet retailers, something that dozens of startups have tried and failed to accomplish. … If it can pull that off, the company will permanently alter how we shop. To put it more bluntly: Physical retailers will be hosed.


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6 thoughts on “ picks Schertz for major distribution hub

  1. Wow. It looks like that works out to an average of $31,400 salary, plus the sales tax generated for the city. Glad we gave it a shot.

  2. Looks like Schertz is doing good in attarcting big companies. The company I work for, Salof Refrigeration, moved into the old Lacks building, and Sysco is already established their too. San Marcos may need to up it a bit if they want to attarct new business, but then again we mainly a growing college town.

  3. Glad we gave it a shot, too, but the good news is that it’s close enough to provide some San Marcos residents some jobs! Way to go San Marcos area! See, the glass is half full.

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