After receiving incentives and abatements guaranteed by state and local taxpayer dollars, Amazon announces two new facilities in Aurora.
Amazon, the internet retail goliath valued at $250 billion, is about to get to get a big Christmas present from Illinois taxpayers in the form of millions of dollars’ worth of state incentives and local abatements. Amazon announced its intention to open two new sorting and shipping facilities along Route 59 in Aurora, Crain’s Chicago Business reported.
Known as “fulfillment centers,” the two facilities will handle and ship small and large consumer good items. Most of the 1,000 jobs will go to the small consumer good item fulfillment center, planned to be nearly 1 million square feet. The other jobs will go to the smaller 400,000 square-foot facility that will specialize in processing larger goods.
The state’s economic development corporation, Intersect Illinois and the Illinois Department of Commerce and Economic Opportunity, or DCEO, brokered the deal.
“Today’s announcement further strengthens Illinois’ position as one of the nation’s top states for logistics and distribution,” said DCEO Director Sean McCarthy in a press release. “This has been a team effort, with DCEO and Intersect Illinois working together to make possible Amazon’s continued growth in Illinois. We are excited to see Amazon expand and create thousands of good-paying jobs.”
The jobs came with a hefty price tag.
Amazon is set to receive a tax credit under the Economic Development for a Growing Economy, or EDGE, program. Though the value of this particular EDGE tax credit has not been made publicly known, past deals with Amazon under the Rauner Administration have come to $1,000 per job, according to Crain’s Chicago Business. In one deal, Amazon agreed to build a facility in Joliet, staffed with 2,000 employees. The cost to taxpayers was $2 million. Using this same rate, Amazon could get $1 million or even more from state government.
And while the EDGE tax credit program is set to run out Jan. 1, due to budget gridlock, the latest deal with Amazon will be formalized Dec. 31, just in the nick of time.
However, state government was not the only one involved in the deal.
“Amazon’s investment in Aurora is a testament to our growing economy, streamlined business process and dedicated workforce,” said Aurora Mayor Robert J. O’Connor in a press release. “To bring 1,000 new jobs to Aurora at one location is unprecedented and to do so via Amazon, one of the most recognized brands in the world, is monumental. It’s just as exciting to know Amazon’s commitment and care for the communities where they have offices and the potential partnerships that will be developed throughout our city.”
Amazon’s care and commitment wasn’t free.
The City of Aurora is giving Amazon a property tax abatement valued at $400,000, Crain’s Chicago Business reported. Early reports on the negotiations did not mention Amazon’s name, only that a deal between the Aurora city government and an unnamed company was being struck. The codenames “Project Bubba” and “Project Bubba Jr.” were used for the two planned fulfillment centers, according to the Chicago Tribune. The deal was speculated to bring as much as 1,400 jobs to Aurora, but it looks as if Amazon has already shortchanged Aurora taxpayers, giving them 1,000 jobs instead of 1,400.
But this is just business as usual for Amazon and its partners in local and state government.
The latest announcement brings the total amount of jobs Amazon has said it will add in the past two years to 7,000. The internet juggernaut has been quite busy in Illinois over the past year, announcing its intention to build new facilities in Edwardsville, Joliet, Romeoville and Monee.
“In just over two years, Illinois has proven itself to be an ideal location from which Amazon can continue offering customers our vast selection and superfast shipping speeds,” said Amazon’s vice president of North American operations Akash Chauhan in a press release.
The harsh reality is that Amazon is getting bribed by state and local government in order to bring jobs to Illinoisans, who have seen manufacturing leave the state in droves. High property taxes, costly workers’ compensation laws and the lack of a balanced budget have caused companies to pack up and leave Illinois. State and local government need to enact real reforms in order to create sustained job growth, not by simply offering bribes to multi-billion dollar companies. This corrupt system not only distracts from the real problems, but also forces other taxpayers to pick up Amazon’s share of the tax burden.
Instead of giving taxpayer-funded handouts to multi-billion dollar companies like Amazon, government officials at the state and local level should focus on acting in taxpayers’ interests and making Illinois truly competitive with other Midwestern states.