The News Journal | by Sarah Gamard
It’s now safe to say that Amazon, with the help of $4.5 million in Delaware taxpayer grants, is coming to the Newport area.
The company, which reported $3.3 billion in profits for the three months that ended in December, says it is bringing about 1,000 full-time jobs to the former General Motors plant site on Boxwood Road.
The state’s seven-person Council on Development Finance approved the grant on Monday.
A Nevada-based distribution company that counts Amazon as a client plans those jobs and more seasonal ones for a 3.7-million-square-foot logistics warehouse, according to a presentation from the company at the Buena Vista conference center in New Castle.
Amazon’s application was not readily available to the public before or during the hearing. Monday’s agenda offered little more detail on the application, only revealing that Amazon was seeking the $4.5 million to “establish its operations in Wilmington, Delaware.”
The full 103-page application, which Delaware Online/The News Journal could acquire after the meeting only through a public records request, is available here.
It states the company plans to hire 50 managers making an estimated $60,000 a year and 950 associates who will make between $31,000 and $33,000 a year. Amazon expects the site launch to be between the latter half of 2021 and 2022.
Amazon would invest $50 million in “equipment, interior fit-out and personal property,” and the developer’s capital investment is expected to be between $200 million and $300 million in “real estate improvements,” according to the presentation.
The $4.5 million will come from Delaware’s Strategic Fund, a pool of state money meant to attract businesses and grow jobs in the First State. Gov. John Carney wants to increase the $12.5 million fund to $20 million next fiscal year.
The grant essentially serves as a bid for the company to locate in the state, according to Damian DeStefano, director of the Division of Small Business and chairman of the Economic Development Authority. He said the Delaware Prosperity Partnership told him that Maryland, Pennsylvania and New Jersey were actively competing for Amazon.
Neither DeStefano nor Kurt Foreman, the president of the partnership, could offer details on exactly what those states were offering Amazon.
“When you have competition from other states, you have to make sure that you’re able to win the opportunities,” DeStefano said. “We act on their (Prosperity Partnership’s) recommendation that we needed to be aggressive in what we offered.”
Amazon will negotiate a contract with the state, which typically lasts about three months, according to a spokesman for the development council.
The state plans to give the $4.5 million to Amazon “over time” as the company hits “benchmarks in their employment numbers,” which will be negotiated in the contract, DeStefano said. He said the state will also ask Amazon to give a “three-year time window” for the creation of the jobs — and keep those jobs for four more years after that.
During the hearing, Amazon promised on Monday to fill at least some of the 1,000 new full-time jobs with Delawareans.
“It’s a lot easier to hire people locally,” Holly Sullivan, one of the Amazon representatives, told the council.
Right now, there are roughly 3,000 full-time Amazon workers in Delaware – 2,600 based in a 1.2-million-square-foot fulfillment center in Middletown.
Shortly after the council voted for the grant, the two Amazon representatives slipped out of the hearing room to a second-floor room. When they came out, they did not answer questions.
Former state Sen. Nancy Cook, one of the council’s seven members, declined to comment after the vote except to say she supports it.
The grant application was brought to the state with the help of the Delaware Prosperity Partnership, which recommends recipients through an opaque process. Carney co-chairs the partnership’s board.
The recommendation all but guaranteed a deal. The council, to date, has never turned down an application recommended by the privately run economic development agency.
The lack of details was not lost on some attendees on Monday. During the hearing, Rep. John Kowalko, D-Newark, lambasted the application process.
“The fact that this Council on Development Finance is only releasing details of the deal today is an insult to the public’s right to know,” Kowalko said during the hearing. “We are about to give away $4.5 million to one of the wealthiest companies in the world with no reasons being made public except that the grant was recommended by the unaccountable and nontransparent ‘Delaware Prosperity Partnership.'”
After the hearing, Delaware Prosperity Partnership President Kurt Foreman said he thinks his organization’s business-seeking process is transparent enough.
“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.”
Shortly before 3 p.m. Monday, an Amazon spokeswoman sent an emailed statement in response to the first version of The News Journal story that had published earlier in the day.
“Receiving incentives and support from local and state governments is a standard practice when a company plans a large investment,” part of the Amazon statement reads.
“By securing support for our facilities in a comprehensive manner, it allows our company the ability to reinvest in more locations due to the material cost savings achieved through programs like the Delaware State Strategic Fund.”
The Amazon project had been anticipated after news broke that the site of the former General Motors plant near Newport would become a logistics center for Nevada-based Dermody Properties, a distribution company that lists Amazon.com as a client.
In 2018, Dermody Properties was involved in bringing an Amazon distribution center to Logan Township, New Jersey – just across the Delaware River from Claymont.