Amazon’s corporate leadership has accepted an $11 million tax-incentives package from Hays County and the city of San Marcos and will build a distribution warehouse with at least 350 jobs in the fast-growing city, County Commissioner Will Conley said Thursday.
San Marcos officials had kept a tight lid on details about the incentives package and its impact, including their cost-benefit projections. With the deal sealed, officials with the Greater San Marcos Partnership said an economic-impact analysis estimated the city and county’s economic benefit at $21.3 million over the life of the 15-year deal.
Amazon confirmed its plans in a release.
“We have found a dedicated and enthusiastic workforce in Texas that has supported our growth throughout the state,” Mike Roth, Amazon’s vice president of North American operations, said in the release.
Employees at the facility — the fifth such fulfillment center in Texas — will pick, pack and ship smaller customer items, such as books, electronics and toys, the release said.
In a written statement, Texas Gov. Greg Abbott said the project is “yet another testament to the fact that Texas remains the best state in the nation to do business.”
Texas and Amazon agreed to a deal in 2012 that dropped a $269 million tax bill due from the Seattle-based company. In exchange, Amazon agreed to begin collecting sales taxes within 60 days and create 2,500 jobs and invest $200 million in the state by 2014. It exceeded both targets.
Since July 2012, sales tax revenue in Amazon’s sector has gone up more than $325 million, according to data from the Texas comptroller’s office. While state law prohibits the office from releasing sales tax collections by individual companies, it’s clear a significant portion of that increase is a result of Amazon’s Texas sales.
Texas is one of 25 states to collect sales taxes from the Internet retail giant, according to its website. No longer worried about avoiding such levies, Amazon was free to expand its network of distribution centers in the state.
Last month, the San Marcos City Council unanimously approved an incentives package, brokered by the Greater San Marcos Partnership.
The agreement will give Amazon a decade-long 40 percent break on its property taxes and an 85 percent rebate on its personal property taxes. The rebates can be extended another five years if the company creates 1,000 permanent full-time jobs at the San Marcos facility for at least half of the first decade and maintains that level in subsequent years.
Amazon and Hays County agreed to an incentives deal with the same terms, Conley said.
Amazon is scheduled to break ground in December on the 855,000-square foot facility along McCarty Lane and near Interstate 35, and it’s expected to begin operations by Jan. 1, 2017, according to the incentives agreement. In the interim, the company plans to spend an estimated $60 million to improve buildings and another $131 million on equipment and furnishings for the facility.
To qualify for the incentives, the agreement requires that Amazon create and maintain at least 350 permanent full-time jobs with benefits and an average salary of $32,240.
“This new facility, and the new jobs it will add, fits well into the city’s goal of embracing economic opportunities that develop a stronger middle class and grow our local economy, a major focus of our comprehensive plan,” Mayor Daniel Guerrero said in the news release.
At the meeting last month to approve the incentives agreement, Guerrero said San Marcos bested communities in three states for the facility.
Amazon’s announcement to move forward with the San Marcos facility comes just days after a New York Times report about punishing working conditions at the e-commerce giant. In a response sent to employees, Amazon CEO Jeff Bezos said the anecdotes described “shockingly callous management practices” that don’t “describe the Amazon I know or the caring Amazonians I work with every day.”
“I strongly believe that anyone working in a company that really is like the one described in the (Times) would be crazy to stay,” Bezos wrote. “I know I would leave such a company.”
Amazon also faced criticism earlier this year for reportedly requiring warehouse and other employees to sign non-compete agreements that could make it difficult for even hourly workers to find similar jobs elsewhere. Amazon said in March it had removed that clause from its employment contracts for hourly workers.