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Amazon adding two more shipping hubs in Ohio

By Doug Livingston • Updated Jul 22, 2019 at 5:04 PM

he worst kept secret in economic development is out: Amazon is building in Akron.

In a statement issued Monday morning, the e-commerce giant finally laid claim to the fulfillment center planned at the former Rolling Acres Mall site on the southwestern edge of town. This and a second distribution warehouse in Rossford, near Toledo, which also was announced Monday, will be the seventh and eighth shipping hubs Amazon will operate in Ohio as the trendsetter in convenience shopping continues to dominate online retail sales in America.

"Ohio has been a great place to do business, serve customers and create jobs; as a result, we are thrilled to develop two state-of-the-art fulfillment centers in Akron and Rossford," said Alicia Boler Davis, Amazon's Vice President of Global Customer Fulfillment. "We're excited to grow our team in the Buckeye State, which now includes more than 8,500 Amazonians, and be part of the larger Ohio community."

E-commerce and shifting consumer behavior contributed to the bankruptcy of the old mall. Acquired by the city through foreclosure and demolished, Amazon's developer has prepared the 107 acres of commercial property for renewal. Construction of the more than 700,000-square-foot distribution center is scheduled to begin in September, according to those familiar with the development, but not at liberty to discuss details, and blueprints obtained by the Akron Beacon Journal/Ohio.com.

Local officials anticipate a hiring push to begin within 60 days of equipping the $100 million, four-story facility, which will use a mix of human "pickers" who grab packages, a state-of-the-art sorting system and automated processes that the company keeps under wraps. After the hiring, the facility could be operational by Christmas 2020, according to some officials.

"In Akron we have a proud history of innovation, resiliency, and re-inventing ourselves to meet the changing demands of a dynamic economy," Akron Mayor Dan Horrigan said. "We are thrilled to welcome Amazon to Akron, to transform this once blighted property into a thriving logistics and distribution hub. This is the single largest job-creating project we have undertaken in a generation. We look forward to continuing to partner with Amazon to empower the Akron community with employment, education and skills training opportunities."

Awarded local tax breaks and yet-to-be-disclosed state incentives from JobsOhio, Amazon is publicly committing to 2,500 new jobs in Ohio. Local officials said Akron will be getting 1,500 new jobs. To fill one-day shipping guarantees, the around-the-clock operation will run multiple shifts, meaning that the actual employment number, especially during peak shopping season, could be higher.

"Amazon has been a strong partner in Ohio, creating more than 8,500 jobs here that have brought benefits and health care on Day One," said J.P. Nauseef, JobsOhio President and Chief Investment Officer. "JobsOhio and our regional and local partners welcome these new facilities that will employ 2,500 Ohioans, revitalize an Akron neighborhood, and bring Amazon's largest Northwest Ohio investment to Rossford."

Ohio Gov. Mike DeWine echoed that sentiment: "Amazon continues to demonstrate confidence in the great workforce and e-commerce business climate we have in Ohio. I'm pleased to welcome two additional investments from Amazon, which bring thousands of new jobs to Ohio and cutting-edge facilities to Akron and Rossford."

Amazon's warehouse jobs start at $15 an hour and come with tuition reimbursement, health care and paid parental leave. The company has come under fire recently from unions and workers who say the work is grueling, forcing some employees to choose between taking a bathroom break or hitting quotas. On Amazon's two-day Prime sale, workers at some fulfillment centers staged international strikes.

The Akron project, like the Toledo-area facility and so many others, had Amazon's fingerprints all over it from the start. Business filings shared pseudonyms Amazon has used in prior deals. Leaked building plans named the company. The size and configuration of the development, down to the buying up of old mall property, suggested Amazon.

But the company refused multiple times to confirm it was behind the development. Secrecy was stipulated in the deals struck with the city, county, state and private businesses that sold land to Amazon.

Fulfillment centers are at the heart of Amazon's one-day delivery promise. Costs associated with the centers have increased in the past two years as more centers open.

"We seek to expand our fulfillment network to accommodate a greater selection and in-stock inventory levels and to meet anticipated shipment volumes from sales of our own products as well as sales by third parties for which we provide the fulfillment services," the publicly traded company reported in a 2018 annual filing with the U.S. Securities and Exchange Commission.

In 2018, the company's net sales and services totaled nearly $233 billion. It's owner, Jeff Bezos, is listed by Forbes Magazine as the richest person in the world.

The company's Ohio footprint now includes eight confirmed fulfillment centers: one in Columbus with two to the state capital's immediate east and west in Etna and West Jefferson, a Euclid warehouse that opened this year and centers opening in 2018 in North Randall and in Monroe between Dayton and Cincinnati.

Between the distribution centers, Amazon runs a host of support facilities, like a sorting center at the old Chrysler Plant in Twinsburg. In November, Amazon Air announced an "air gateway" not far from Dayton at Wilmington Air Park in space vacated by DHL.

Last year, the Dayton Daily News reported that the company, at the time a top-60 employer statewide, had plans to add 5,500 employees to the 6,000 workers hired in Ohio over the past seven years.

A good portion of that expanded workforce will work in Akron at the former Rolling Acres Mall site where Barberton, Norton and Copley Township come together. The location is getting public support. In anticipation of heavy tractor trailer traffic, the city is relaying the cement on Romig Road and updating ramps for I-76 to the south and I-77 to the north.

The earliest indication of the clandestine development came in June 2018 when Akron's Planning Department and Economic Development Office applied for Ohio Public Works Commission funding to repave Romig Road and open the area up to local property tax incentives for future developers.

At the time, city officials said they had no one in mind for the development. A month later, they sought and received approval from council to sell 67 city-owned acres on the site for $600,000 (about $9,000 an acre) to Akron Romig Road LLC, a mysterious company incorporated with privacy in Delaware. Zack Milkovich was the only member on council to vote against the secret deal.

Private landowners began selling their 40 acres to a third-party investor working with the developer. The last of the private land went for $3 million an acre in November.

The developer promised that its tenant would sustain $30 million in annual payroll for 10 years — a major boost for a declining commercial stretch of Akron.

The city, in exchange, agreed to a 30-year tax rebate for Amazon. The city would divert future taxes on the improved property into a special fund, out of which Amazon would be reimbursed the more than $17 million paid to buy the land plus any acquisition and demolition costs.

If Amazon misses its $30 million payroll guarantee, a calculation would lower the tax rebate proportionally.

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©2019 The Columbus Dispatch (Columbus, Ohio)

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