What to expect when Amazon moves into town

Etna — a township east of Columbus with a population of nearly 19,000 — was one of the first Ohio communities to welcome Amazon.

The online retailer constructed a giant warehouse in 2016 near a corporate park along state Route 40 and now employs about 4,000 workers between the warehouse and a delivery hub that opened last fall, said John Carlisle, president of the township's Board of Trustees.

Carlisle said Amazon brought more people and traffic — to the dismay of some who wanted Etna to remain a rural community and to the delight of others who appreciated the additional tax money.

"It depends on the way you look at it," he said. "We were a small community. They've had a pretty big impact." 

Canton soon will feel that Amazon impact. The company confirmed plans Tuesday that it will occupy a 1 million-square-foot distribution center being built on the former Skyland Pines golf course. The facility will open next year and employ at least 1,000 workers. 

City and business leaders already are touting the economic benefits, while neighbors are worried about how a distribution center will fit in their residential area.

The ubiquitous e-commerce company has made national headlines for a high rate of workplace injuries, numerous employees who use food assistance and a less-than-desirable effect on communities.   

Officials from Etna, Rossford and Euclid say their local Amazon facilities improved their communities by employing thousands of people and boosting tax revenue. But local business owners near the Akron warehouse on Roming Road said they have not reaped the benefits.

"It hasn't affected me one bit, and I get very little business from those people," said Bob Mileti, owner of Primo's Deli. 

Derek Fromby opened Beanhead Brothers Coffee with co-owner Kevin Tyler soon after the Amazon warehouse opened at the former Rolling Acres Mall site. He expected to serve a steady stream of employees but, in reality, serves maybe three a week.

Fromby said attempts to sell coffee inside the warehouse break rooms have been unsuccessful so far.

"We haven't really had any business from Amazon," he said.

Investing in Ohio

The fulfillment and sortation centers under construction in Canton and Union, near Dayton, will increase the number of Amazon warehouses in Ohio from 10 to 12 next year. The company also is constructing a delivery station in Springfield Township, southeast of Akron.

The Seattle-based company opened its first fulfillment center in Obetz and its second soon after in Etna during 2016. The central Ohio warehouses were joined by several other facilities, including the Akron fulfillment center in late 2020 at the former Rolling Acres Mall property.

The Akron site is close to full employment with about 1,500 people, said Sean Vollman, Akron’s deputy mayor for integrated development. The city anticipates economic growth along the Romig Road corridor but, in part because of the COVID-19 pandemic, it is too early to quantify the impact of the Akron facility.

“(But) with that many people down there and at all hours, it has to have a positive impact,” Vollman said.

In Ohio, Amazon reports its current primary investments as 10 fulfillment and sortation centers, 13 delivery stations, one air gateway, one air hub with a sortation center, 12 Whole Foods Markets, four Amazon Hub Locker+ sites, two Prime Now hubs, 11 solar farms and one wind farm. 

The company invested more than $12 billion in Ohio on expenses such as infrastructure and employee compensation from 2010 to 2020, according to Amazon's economic impact report produced by Keystone Strategies. The report — released in August — also noted that Amazon employed at least 41,000 full- and part-time workers in the state.

The Ohio Development Services Agency's major employers report from December 2020 ranks Amazon as the state's ninth-largest employer but estimates the number of employees at 23,500. Chief Communications Officer Todd Walker said the report is based on public data and Amazon historically has "significantly overperformed" as an employer.

Jessica Pawl, an Amazon spokeswoman, said the employment figures were current as of the fourth quarter of 2020. In September of this year, Amazon announced plans to hire 125,000 fulfillment and transportation employees and 40,000 corporate and technology employees nationwide.

“We are proud to be the number one investor and fastest job creator in America and we know that our size and scale bring broader responsibility – our investments can not only help revitalize cities and neighborhoods but also provide a career opportunity for those in need," Holly Sullivan, vice president of Economic Development at Amazon, said in a prepared statement.

There also are more than 45,000 charitable organizations in Ohio supported through AmazonSmile and more than 40,000 businesses and authors selling on Amazon.

Incentives from Ohio

Amazon has received seven job creation tax credits worth an estimated total of $49.4 million, and the state has distributed $22.3 million so far. The conglomerate committed to creating 8,770 jobs through those agreements, according to Ohio Department of Development data.

The Ohio Tax Credit Authority also approved a sales-tax exemption on the purchase of eligible equipment for Amazon data center sites — estimated at a value of $77 million.

The state board most recently awarded the Rossford fulfillment center a 10-year tax credit estimated at $5 million for the creation of at least 1,000 jobs. It was approved in 2019 and has yet to be distributed based on annual reporting.

"To date, there are no incentives for any other projects for Amazon," spokesman Walker said in mid-September.

JobsOhio also gave Amazon numerous grants between 2015 and 2019 for eight projects, according to JobsOhio Communications Manager Matt Englehart. They amount to $11.65 million in revitalization grants, $6.55 million in economic development grants, $3.25 million in workforce grants and another $1 million JobsOhio grant.

Amazon's obligation for those incentives was to create 8,620 jobs and invest $1.79 billion in the state. 

Zach Schiller, research director for the nonprofit Policy Matters Ohio, said the time when tax incentives for Amazon might have made sense is passed, however. The company needs facilities in more places because its business model relies on quick delivery to customers.

"It ill behooves the state of Ohio, certainly, to be foregoing tax revenue to attract them because they're going to be here anyway," Schiller said. 

Taxpayers have subsidized Amazon workers, too. In August 2017, the company was the 19th top employer in Ohio whose workers relied on food assistance.

Schiller, who wrote the related news release based on data from the Ohio Department of Job & Family Services, reported that 1,430 workers or their family members drew from the federal Supplemental Nutrition Assistance Program (SNAP) that month.  

Amazon since raised its minimum wage to $15 an hour and now boasts an average starting pay of $18 an hour, but a U.S. Government Accountability Office report published in October 2020 still showed the company among top employers with workers who rely on federal health care and food assistance programs.

The report examined the top 25 employers in six states with the largest estimated number of adult Medicaid enrollees who are not disabled or elderly, and Amazon was among the top 10 in five of the states. Amazon also was among the top 15 employers with the largest estimated number of SNAP recipients in six out of nine states.

"At first blush, if you look at this, it doesn't appear as if creating a $15 minimum wage has kept Amazon from appearing on these lists," Schiller said.

Effects on communities

Amazon established the Etna warehouse with the help of a 15-year job creation tax credit approved by the Ohio Tax Credit Authority. It was the largest tax credit award, encompassing Etna and Obetz facilities, at an estimated total value of $17.5 million for the creation of at least 2,000 jobs.

So far, the Etna and Obetz warehouses have received $14.4 million in state tax credits, which are based on the actual number of jobs created and can be applied to certain business-related tax obligations.

Etna, in partnership with the city of Newark, also has a Joint Economic Development Zone (JEDZ) that collects a 1.75% income tax from Amazon employees. Carlisle said the township's portion is deposited in the general fund and helps pay for township services, such as trash collection.

"So, we've used it for that to give back to the community because they were the ones that approved (the JEDZs) on the ballot," he said.

In addition to state incentives for Amazon fulfillment centers, Rossford and Euclid city leaders said local incentives were minimal.

Rossford Mayor Neil MacKinnon III said the fulfillment center, which opened in 2020 near the Interstate 75 and Interstate 90 interchange, received a 15-year real estate tax abatement.

"But they made our school district whole, and Rossford gets to retain all of the income tax," he said.

The Amazon warehouse and its effects on the surrounding area have been nothing but positive, MacKinnon said. Rossford is replacing roads and investing in traffic signals and roundabouts nearby — even though the area is commercial and industrial — because of subsequent growth.

"It definitely puts any site in a serious traffic pattern, and that's going to drive other development," he said.

The Euclid fulfillment center opened in the fall of 2019 where there once was a "vacant, blighted mall," said Mayor Kirsten Holzheimer Gail. The city and Cuyahoga County widened and rebuilt some surrounding roads, but traffic hasn't been greatly affected at the former retail location off Interstate 90.

"There isn't really any residential immediately adjacent to it, which is helpful," Holzheimer Gail said. "I think that's made it work well because of the location that it's in."

Euclid provided no income tax abatement, but Amazon received an "automatic" 15-year property tax abatement for new construction because it's in a Community Reinvestment Act area. So, the city splits income tax revenue from Amazon with the school district.

As in other communities, Amazon surpassed initial employment projections and now is the city's second-largest employer of more than 2,000 people. Holzheimer Gail said the resulting tax revenue has been "enormously helpful." 

She's noticed a rise in business at area gas stations, convenience stores and restaurants. Local nonprofits, such as the Hunger Center and HELP Foundation, also have benefited from Amazon donations.

"It's been a positive impact for us as a community," Holzheimer Gail said.

Akron Beacon Journal reporter Jim Mackinnon contributed to this report.