Local officials look to ‘Amazon effect’ to boost region’s economy

Amazon won’t open its fulfillment center near the Spokane International Airport for at least another year, but local officials are already giddy about the “Amazon effect.”

Beyond the 1,500-plus jobs the massive distribution center is expected to generate, they see Amazon’s presence here as an opportunity to raise Spokane’s profile as a place to do business.

Amazon confirmed Friday that it is the entity behind the fulfillment center, which was referred to as “Project Rose” in building documents on file with Spokane County.

The Seattle-based e-commerce giant has more than 100 fulfillment centers across the U.S. Additional centers are under construction to meet the company’s commitment of “free, fast deliveries” for Amazon Prime customers.

The fulfillment center west of Spokane is expected to open in the fall of 2019. Hiring will begin next year.

“It’s an incredible win for the community,” said Larry Krauter, Spokane Airport’s chief executive officer. “I can’t think of anything else that would be close to those job numbers in a single development.”

Besides the 1,500-plus direct jobs at the center, local officials expect related companies to establish operations nearby.

“We are studying the Amazon effect,” Krauter said. “We think there could be up to a dozen complementary businesses that will locate here to support Amazon’s operations.”

The fulfillment center will also generate short-term construction jobs and boost airport traffic, officials said.

“These may not be high-level tech jobs, but I think the fulfillment center will be a catalyst to get more good companies to Spokane,” said Jack Heath, Washington Trust Bank’s president and board chairman for Greater Spokane Incorporated.

Public officials, who had been under a nondisclosure agreement, talked Friday about how the Amazon deal came together. They discussed the economic spinoff they expect from the center, and how they see Amazon’s shift workers fitting into the local economy.

“This is a case study in what a small community like Spokane can do to recruit a company,” Heath said. “The community really rallied around this project.”

A construction boom

Construction of the fulfillment center is a job generator in itself, Spokane City Council President Ben Stuckart said. “It’s a major project, worth about $150 million,” he said.

Employees will work alongside Amazon robotics to pack and ship products at the center. The four-story building at 10010 W. Geiger Blvd. will encompass about 2.5-million square feet.

“The scope and scale of this building will be staggering when it comes out of the ground,” Heath said.

Dallas-based Trammell Crow Co. is the developer for the project, but local contractors also are getting work from the center’s construction.

Piersol Construction was hired as a subcontractor to level the 80-acre site and install underground utilities.

For scale, the Amazon fulfillment center is about “four times the magnitude” of the work Piersol Construction did at the new Costco store site in North Spokane, said Maurice Piersol, the owner.

More airport business

The fulfillment center will generate new business for the Spokane airport, Krauter said. Besides an increase in air cargo flights, he’s expecting a bump in business and leisure travel.

FedEx and UPS operate out of the airport, and Amazon’s presence will mean more business for them, Krauter said. Amazon is in the early stages of developing its own cargo delivery system using drones, called Prime Air.

The cargo carriers are tight-lipped about their numbers for competitive reasons. So, “it’s difficult for us to crack the code for what they may be forecasting,” Krauter said.

With the job growth from the fulfillment center, local residents will have more discretionary income, he said. Airport officials expect to see more Spokane-area residents traveling for pleasure, in addition to the business travel the center will generate, Krauter said.

Specific types of industries typically spring up around an Amazon fulfillment center, such as packaging and cardboard recycling. Amazon’s presence could also attract other warehouse facilities to the area around the airport, Krauter said.

“Our long-range vision is creating a transportation and logistic center with global capacity,” he said. In the future, “we may see other multimillion-square-foot warehouses that could be served by rail, truck and air.”

City-County cooperation was key

Amazon’s fulfillment center will be built on acreage that was slated for an industrial park in the early 1990s. After the project fizzled, investors bought the land. It lay vacant for years.

Al French, the Spokane County commissioner, said he’s thrilled to see a large development headed for the site.

Amazon officials credited Spokane’s labor market in the company’s decision to build a fulfillment center here. Spokane is a hub that attracts job seekers from surrounding areas. Within a 40-mile radius of the city, there are about 23,000 people looking for work, according to state figures.

French also thinks the West Plains-Airport Area Public Development Authority played a role. Last year, the city of Spokane and the county agreed to end turf wars for business recruitment near the airport. They worked out an agreement to share revenue and pay for infrastructure needed to attract new companies.

For the Amazon project, that involves about $1 million in new, public roads to serve the site. In addition, the city will extend water and sewer service to the property, which is located outside the city limits.

“Without the public development authority, I don’t think Amazon would be here,” French said. “Instead of working as adversaries, we’re working as partners. … It’s a unique model in the state that allows us to market the Spokane area as a community.”

Amazon’s presence makes “a big statement to other companies looking at coming to Spokane,” French said. “This is all good news.”

Jobs with benefits

Amazon customers in Spokane will benefit from having a fulfillment center nearby, said Lauren Lynch, a company spokeswoman. But whether they’ll get same-day delivery – a benefit for Amazon Prime customers in some ZIP codes – remains to be seen.

Amazon hasn’t disclosed a starting wage for the Spokane fulfillment center, either. Pay scales will be determined after the company conducts a local market survey, according to Lynch.

“We definitely want to make it attractive for people to choose Amazon over competitors,” she said. For that reason, workers get raises during their first year and opportunities to advance, she said.

For full-time employees, Amazon offers health insurance, a 401(k) and stock awards. Workers can also qualify for tuition assistance. In recent years, however, reports have emerged about challenging conditions at Amazon’s warehouses.

In Minnesota, employees said they experienced exhaustion, dehydration and injuries while working without air conditioning, according to the Associated Press. In “Hired: Six Months Undercover in Low-Wage Britain,” author James Bloodworth described a workplace where employees skipped restroom breaks so they wouldn’t fall behind on productivity goals.

According to Amazon’s job descriptions, workers at fulfillment centers must be able to lift up to 49 pounds. They could be walking or standing for 10 to 12 hours. Even with climate controls, temperatures could exceed 90 degrees, particularly for people working inside trailers on hot days.

Local officials said the community will benefit from having Amazon as a employer.

“I think they’re good jobs,” said French, who described the health insurance, tuition assistance and paid time off as “a good package.” If working in a warehouse isn’t appealing, “then don’t apply for that job,” he said.

“As a community, we need to be producing employment opportunities for people of all skills,” said Todd Mielke, Greater Spokane Incorporated’s chief executive officer.

Spokane is sometimes characterized as having entry level jobs and professional jobs, but nothing in between, he said. Fulfillment centers offer a work environment where people can get training and advance, he said.

“I’m excited about 1,500 jobs on the West Plains,” said Stuckart, the city council president. “We’re an economically depressed area.”

Even if the jobs pay a lower starting wage, “I don’t think we can pooh-pooh that,” he said.