By Staff Reporter
TOWN OF NIAGARA — Amazon is now hiring at its 3.1 million-square-foot fulfillment center on Lockport Road. That brings the Niagara County Industrial Development Agency’s $123 million wager to the point where taxpayers can start checking whether it pays off.
The company announced Oct. 9 that it will hire up to 1,000 full- and part-time workers at 8995 Lockport Road, near the Niagara Falls Air Reserve Base. Pay starts at $21 to $23 an hour, with benefits from the first day, according to Amazon’s announcement as reported by Buffalo Toronto Public Media and WBEN. Amazon calls the building a “first-mile” sortable fulfillment center. It receives bulk shipments from suppliers and sends products on to delivery stations elsewhere in Amazon’s network.
Amazon scheduled hiring events Oct. 13 through 15 in Niagara Falls, Buffalo, Williamsville and Lockport.
The local official’s view
“1000 jobs in this area is nothing short of amazing,” Town of Niagara Supervisor Sylvia Virtuoso told WBEN. “The thought of having 1,000 people in and out of the town of Niagara using our businesses for lunches and gas and pumping up and everything else would be just perfect for us.”
Ms. Virtuoso acknowledged early problems with truck traffic. “The tractor trailers are supposed to come down Packard Road and leave through Lockport Road, and they’re not really all following the rules,” she said. “But we’ve had a discussion with Amazon, and that is going to be corrected very soon.”
What the public is putting in
The NCIDA first approved the project in August 2022. The agency’s project summary, dated March 1, 2022, estimated $123.9 million in tax exemptions: about $94.4 million in property taxes, $26 million in sales taxes and $3.5 million in mortgage recording taxes. At the time, the project was budgeted at $550 million and projected to create 1,000 jobs over two shifts.
This year the package changed. According to Niagara Gazette reporting on the agency’s August and September meetings, Amazon’s costs rose to $587.5 million because of material-handling equipment and design changes. The agency added $3 million in sales tax breaks, and Amazon gave up the $3.5 million mortgage recording exemption. The total now stands at about $123.4 million: roughly $94 million in property tax exemptions and $29 million in sales tax exemptions.
The Gazette, citing the watchdog group Good Jobs First, reported that the package is the 11th-largest Amazon incentive deal in the United States.
Under the payment-in-lieu-of-taxes agreement, as Investigative Post detailed in 2022, Amazon pays 10 percent of its property tax bill for seven years. The share then rises 10 points a year for eight years, and Amazon pays the full bill only in year 16. Over the 15 years, Amazon is expected to pay about $49 million of what would otherwise be a $173 million local tax bill.
What the public was promised
The agency’s cost-benefit analysis, prepared with a calculator from MRB Group, projected an 11-to-1 return. It counted about $1.08 billion in payroll over the life of the PILOT and 527 indirect jobs on top of the 1,000 direct ones. It also projected new revenue of about $11 million for Niagara County, $3.9 million for the town and $33.7 million for schools.
Most of that return depends on payroll: how many people Amazon employs, at what pay, and for how long. In 2022, the company told the agency that 950 of the 1,000 jobs would pay $31,200 a year, or $15 an hour, and 50 management jobs would pay $60,000, Investigative Post reported. Today’s posted starting wage of $21 to $23 an hour is higher than that.
But the jobs math is not settled. The agency’s summary says the project “will employ approximately 1,000 individuals.” Amazon’s hiring announcement, as reported by BTPM, describes up to 1,000 full- and part-time employees. Part-time positions bring in much less payroll than full-time ones, and the agency’s summary does not say how part-time jobs count toward the commitment or what happens if staffing falls short.
The case for and against
Supporters have long said the deal was the price of landing the project. Amazon moved its plans to the town after dropping a proposed Grand Island site in 2020.
“Doing business in New York is expensive and a lot of companies won’t come without those inducements,” NCIDA Chairman Mark Onesi told reporters after the 2022 vote, as reported by Investigative Post. “We want [these] 1,000 jobs.”
Critics argued Amazon picks sites for logistics, not subsidies. They pointed out that the company built its Tonawanda and Lancaster facilities without tax breaks.
“[Local officials] should be driving a harder bargain, they should be playing a smarter poker hand,” Greg LeRoy, executive director of Good Jobs First, told Investigative Post in 2022. “They should realize that the company wants to come, that the bargain on the table isn’t the jobs, it’s the access to market share.”
John Kaehny of the good-government group Reinvent Albany was blunter. “This is money that’s not going to go to schools, fire protection, parks, clean water, etc. in Niagara County,” he told the outlet that year.
The town also gave the project a negative declaration under the State Environmental Quality Review Act, so it never went through a full environmental impact review. The project summary notes that traffic mitigation was based on a traffic study. The supervisor’s complaint about truck routing suggests residents along Packard Road will be watching that closely.
Accountability going forward
Now that the building is open, the deal can be measured. Under state law, IDAs must report each project’s jobs and tax exemptions every year to the state Authorities Budget Office, and those reports are public. Future filings will show how many people actually work at Lockport Road, and whether that matches the 1,000 jobs in the cost-benefit analysis.
Residents and legislators can press for answers to a few questions. How many of the hires are full-time? What is the median wage after a year? Does the NCIDA agreement allow the agency to claw back benefits if employment falls short, and has it ever used that power? And will the truck-routing problems Ms. Virtuoso described get fixed before the holiday rush?
The NCIDA board’s meetings are open to the public.
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