NAMPA — Officials have yet to confirm what a 991,000-square-foot warehouse called "Project Bronco" will be, but past evidence points to it being an Amazon fulfillment center.
If that's the case, Nampa will likely be affected in a major way. Economic Development Director Beth Ineck said she doesn't expect officials to reveal what Project Bronco is until this spring. The facility likely won't open until late 2019 or 2020. The developer has yet to purchase the land eyed for the project on the southwest corner of Star Road and East Franklin Road.
The Nampa Planning and Zoning Commission granted the conditional use permit for Project Bronco in July, and Ineck said the developer has submitted plans for a building permit. The developer secured a foundation-only permit in November, which building department director Patrick Sullivan said allows work to start on the foundation, expected to cost around $7.4 million.
Coming up in early 2019, Ineck said she expects the Nampa City Council to approve a memorandum of understanding with the Project Bronco developer. She said the memorandum will solidify which parties are responsible for completing traffic improvements related to the project.
A traffic impact study for Project Bronco called for dozens of traffic improvements over the next 12 years, and officials have claimed the development would bring about 2,000 jobs to the area, making it the largest employer in a single location in Nampa, Ineck said.
The Idaho Press reached out to leaders in nine other communities that gained an Amazon fulfillment center in recent years. Even with the job boost, cities saw minimal impact on the unemployment rate, but some employers in those communities felt pressure to increase wages to retain employees.
Amazon fulfillment centers are a major job creator for cities, regardless of population. Earlier this summer, Amazon announced plans to open a Spokane fulfillment center in 2019 and employ between 1,500 and 3,000 people, which would make it the largest job creation project in Spokane County in local officials' memory, according to a report from The Spokesman Review.
But that doesn't necessarily mean Amazon's presence is a guaranteed drop for a city's unemployment rate.
Of nine U.S. cities across the country where Amazon recently built a fulfillment center, most officials said the same thing when asked what Amazon did to impact their unemployment rate: "Well, our unemployment rate was already pretty low to begin with..."
It's true. Among those nine cities, the unemployment rate hovers between 2 percent and just over 4 percent. Nampa falls in the same boat, with an unemployment rate at about 2.8 percent, according to the Idaho Department of Labor.
Because the unemployment rates are so low in these cities, city officials said many of their Amazon employees were not previously unemployed, but instead came from other jobs. Despite the fact that Amazon creates new jobs in the areas it develops in, a February report from the Economic Policy Institute found that Amazon centers created little to no net job growth because the jobs created were offset by job losses in other industries.
Ray Young, city manager for Troutdale, Oregon, which saw an 855,000-square-foot Amazon fulfillment center open in October, said a FedEx facility next to the fulfillment center is struggling to retain employees. Tim Keyes, economic development director for Romulus, Michigan, said there were concerns from local employers in the hotel and food service industries that when the city's Amazon center opened this summer, it would take their employees by offering higher wages and better benefits, but Keyes was not sure if those fears were ever realized.
In Joliet, Illinois, where two Amazon facilities have opened in the last three years, Economic Development Director and Deputy City Manager Steve Jones said a local casino owner told him the city could better support other businesses by not allowing any more Amazon facilities to develop because they were losing employees to them, even before Amazon increased its wages.
Amazon recently implemented a $15 minimum wage — much higher than most minimum wages across the country. At the Troutdale FedEx facility, Young said officials have attempted to increase wages to compete with the Amazon center.
Officials from other cities also said Amazon's presence has increased the pressure on employers to raise pay to recruit and retain employees. Because most of the fulfillment centers opened fairly recently, the officials said they did not have data to back up those claims, but instead heard about it on an anecdotal basis from other employers.
According to the Idaho Department of Labor, there are about 1,110 warehouse and storage jobs in Ada, Canyon, Boise, Gem and Owhyee counties, with an average annual wage of about $41,700. Nampa's overall labor force increased by about 2,000 people from January 2017 to October 2018, while its unemployment rate dropped from 4.1 percent to 2.8 percent, amounting to nearly 500 fewer people unemployed.
Nampa Councilman Rick Hogaboam said local employers will likely have to compensate by increasing wages or lowering their hiring standards to compete with Project Bronco, which may be a positive by providing more job opportunities to younger people like high school or college students. For employees who leave their jobs to work at Project Bronco, Hogaboam said he believes many of them will be better off, presuming that their new positions will be an upgrade from their old ones.
"Anything above minimum wage would add value to our community," Hogaboam said.
Nampa Mayor Debbie Kling said she hopes that as the city continues to grow, the increasing population will help fill the additional jobs Project Bronco brings to the area.
Project Bronco is situated near several large employers in Nampa, including the Lactalis American Group cheese factory, the Ford Idaho Center and the Amalgamated Sugar Factory. Project Bronco's facility would be about eight times the size of the Idaho Center's indoor arena, which is roughly 120,000 square feet.
Tim Savona, general manager for Spectra at the Idaho Center, said the Idaho Center's approximately 200 part-time employees likely pose the biggest risk for leaving to work at the Project Bronco facility. However, he said once the nature of Project Bronco is announced, he and other Idaho Center officials will work on a strategy to retain employees.
In other parts of the country, some city officials said a large portion of the Amazon fulfillment center's employees were pulled in from outside their cities. Bryan Jones, city manager for Eastvale, California, which saw two Amazon facilities open in the last two years, said some employees travel an hour or more for the job. Several other city officials said the same thing is happening in their communities.
Jerry Miller with the Idaho Department of Commerce said Nampa loses a net total of about 11,000 people every day, taking into account how many people commute out of the city for work and how many people commute in each day. Hogaboam said he suspects many of those workers would leave their jobs to work at Project Bronco once it opened to save time and money.
Bryan Jones said Amazon has had an overall positive economic impact on Eastvale. He and several other city officials said nearby restaurants and convenience stores have seen an increase in business following the Amazon centers opening, and he said some local families can now afford to live in high-quality homes after multiple members found jobs at Amazon.
Amazon also helped put Eastvale on the map, Bryan Jones said. For a fairly new city that was incorporated just eight years ago, he said the presence of a big-name company like Amazon has made more people aware of Eastvale, including other large companies. This impact was something officials in other cities echoed, saying they've seen increased interest from industrial developers since Amazon opened.
"If it's good enough for Amazon to build there, then it's probably good enough for other companies," Young, in Troutdale, said.
But some Nampa residents who value the city's small-town culture may not prefer more large companies locating in Nampa after Project Bronco opens. Kling said Project Bronco may inevitably change that culture, but pointed out that it is still just one project, and she doesn't predict it will have a negative impact on the city's small businesses. Long term, she said communities should try to develop a diverse mix of employers.
"This is the best way for us to move our community forward," Kling said.
Back in September, Thompson Engineers released a 907-page traffic impact study for Project Bronco, calling for dozens of traffic improvements such as converting the roundabout on Star and Franklin roads to a signalized intersection, and installing seven other roundabouts or traffic signals and six new intersections by 2030.
Other communities did not see so many traffic projects when an Amazon fulfillment center developed there. Bill Ellis, economic development director for Kent, Washington, referred to his city as a "distribution hub" with about 45 million square feet of warehouse space. When Amazon came in 2016, it only took up about 2 million square feet of that space, and was already situated in an industrial area, so there was no need to make many changes to the surrounding infrastructure.
Troutdale Mayor Casey Ryan also said his city's Amazon fulfillment center had little impact on the city's infrastructure, mainly because it was built in an industrial area on the outskirts of the city far away from residents and the downtown. However, if the center had been built closer to subdivisions, a hospital or events venue — like Project Bronco is — Ryan said it would have been a different story. The distribution center likely would have been smaller, he said.
"I'm not sure we would have done it at all," Ryan said.
Other city officials said their Amazon centers had a noticeable impact on traffic. In Romulus, Keyes said the city is adapting to the traffic impacts. The city installed a new road that connects to the highway for Amazon trucks to use, but at first Keyes said the truck drivers did not know to use the road because it did not show up on their GPS.
Bryan Jones said the Eastvale Amazon center has also brought about new traffic projects, but Amazon has not caused much congestion in the area. He said Amazon even paid for extra traffic control during the holiday season to minimize the traffic impact. Even if there was heavier traffic, Bryan Jones said that's not necessarily a negative thing.
"People see congestion as a bad thing, but it's actually a sign of a healthy community," he said.
Adam Krueger, assistant director of economic development for Thornton, Colorado, said he lives two miles away from the Amazon fulfillment center that opened in August, and has been amazed at the lack of traffic impact the center has had. He said this is partially because Amazon appears to spread its employees' shifts out throughout the day, so there aren't floods of cars coming and going all at once, and because there were several traffic improvements made, including three new roads to access the facility. If there had been no traffic improvements, Krueger expects the impact would have been huge.
Savona, with the Idaho Center, said everything he has read about Project Bronco he's considered as positive, even if there might be some growing pains during construction. Nampa Economic Development Director Beth Ineck said once the traffic projects are completed, she believes it will only benefit Nampa drivers.
"We're playing catch up," Hogaboam said.
The Economic Policy Institute, based in Washington, D.C., reported that Amazon had likely gained over $1 billion in state and local subsidies across its facilities by the end of 2016.
But it appears that Nampa does not plan to grant Project Bronco tax incentives, as Ineck said the city is not officially considering offering the development tax benefits. Project Bronco representatives met with Canyon County commissioners in November to explore possible tax exemptions, but Commissioner Tom Dale said the county has not received any applications pertaining to tax exemptions for Project Bronco.
However, Ineck said there are conversations about tax incentives happening on the state level, but nothing has been confirmed yet.
Among the nine cities, roughly half granted tax incentives to Amazon. Jim Burke, economic development director for Windsor, Connecticut, said when their Amazon fulfillment center opened in 2015, the city offered an approximately 60 percent tax abatement for the first five years, which saves Amazon about $500,000 a year. He said the city also granted Amazon a 50 percent discount on its building permit, which Burke estimated saved Amazon between $400,000 and $500,000.
Barb Gamber, economic development coordinator for Livonia, Michigan, said when their Amazon fulfillment center opened a year ago, the city granted it a 12-year tax abatement, which amounted to about $23 million. In Hillsborough County, Florida, where an Amazon fulfillment center opened in 2014, Economic Development Director Lindsey Kimball said the state and county offered Amazon over $1.1 million in a tax refund, and the state gave Amazon a $3 million infrastructure grant to improve public roads near the development.
Young said Troutdale officials agreed to grant Amazon a five-year property tax abatement, which saves Amazon about $2 million a year in exchange for Amazon paying the city about $500,000 a year to make up for lost property tax revenue.
Canyon County Assessor Joe Cox said he expects the assessed value of the land Project Bronco is situated on to change in 2019, so the amount the development will generate in property taxes for the city and county is unknown. Hogaboam estimated the project would generate about $1 million a year, depending on how its value is assessed.
"That's a huge contribution to the city's tax base," Hogaboam said.
Ineck said the Project Bronco developer will also pay the city's impact fee. Nampa's current impact fee rate for industrial development is 21 cents per square foot. At 991,000 square feet, that would equal $208,110 in impact fees, but Sullivan with the city's building department said some of that space might be subject to Nampa's impact fees for office developments — 60 cents per square foot — depending on how the space is used.