NEWS

How will Amazon benefit Johnston?

By RORY SCHULER
Posted 9/9/21

Undeveloped, the section of forest where Amazon plans to build a facility in Johnston generates $60,084 in annual tax revenue for the town. After a "new, state-of-the-art Amazon Robotics Sortable Fulfillment Center" is built and opened,

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NEWS

How will Amazon benefit Johnston?

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Undeveloped, the section of forest where Amazon plans to build a facility in Johnston generates $60,084 in annual tax revenue for the town.

After a “new, state-of-the-art Amazon Robotics Sortable Fulfillment Center” is built and opened, that figure is expected to increase by more than 12,000 percent.

Johnston may receive more than $170 million in tax dollars and additional benefits over two decades from the proposed Amazon facility, if the Town Council approves a series of resolutions next Wednesday.

The resolutions include a 20-year Tax Stabilization Agreement, and a list of other appropriations, to be spread throughout the town, including funding for new school programs, road improvements, bus rides for employees and a boost to Johnston’s public safety budget.

The Town Council will hold a public hearing and special meeting at 7 p.m. on Wednesday, Sept. 15, in the Johnston High School Auditorium, 345 Cherry Hill Road.

A School Committee meeting slated for 6 p.m., prior to the Town Council meeting, will discuss proposals for new school building projects.

Only one item is listed on the School Committee meeting agenda: “Presentation of the phase II school building construction plans by SLAM for submission to the Rhode Island Department of Education.”

The School Committee and the audience will view a presentation on proposed school building projects in town – a new early childhood center, a new town-wide elementary school, and renovations for the middle and high school.

“We wanted to do a joint meeting so both committees hear the information on the facilities upgrades for the district,” said Johnston Schools Superintendent Dr. Bernard DiLullo Jr. “The architectural firm, the SLAM Collaborative, will put together a visual presentation.”

An expansion in Johnston’s tax base, following the construction of a new Amazon facility, will likely help to fund new school building projects.

Secret’s out

Despite a heavy reliance on robotic technology, the six-story, 3,864,972 square-foot Amazon facility promises to employ 1,500 to 2,000 people.

Documents filed with the Rhode Island Secretary of State’s office detail the Tax Stabilization Agreement and promised payments to the town, the school district and the state.

Johnston Mayor Joseph M. Polisena said Tuesday that the pending agreement with the town is “the best deal Amazon has given out so far.”

Prior to legal advertising for next Wednesday’s meetings, town officials, documents and Polisena have not used the word “Amazon” while discussing the project.

The codename “Project Schooner” had been substituted, until a tentative agreement with the giant online retailer could be reached.

On Tuesday, Polisena said he had signed a non-disclosure agreement, or NDA, with Amazon, promising not to discuss the project publicly. He also disclosed that Amazon first reached out to him regarding the new facility “more than two years ago.”

“For some reason, this is what they normally do to keep the negotiations more intense,” Polisena said in his Town Hall office on Tuesday.

Tax breaks

The company hopes to secure a tax agreement with the town, promising a series of 20 annual tax payments averaging more than $7.2 million each year for the next two decades.

The company will receive a significant savings on tangible taxes, but promises to make stable annual payments, starting with a potential $5.7 million the first year, with a fixed annual 2.5 percent increase, raising the annual payment to more than $9 million by the 20th year.

Amazon will make the stabilized annual payments “in lieu of any and all other real and personal property taxes and assessments,” according to the tax agreement.

“This agreement represents an average tax revenue of $7,280227.42 over the 20-year term of this agreement, representing a $7,220,143.42 or 12,016% average increase in tax revenue over the current tax revenue for the property,” according to the tax agreement.

Polisena, in his final term serving as Johnston’s mayor, hopes the Amazon agreement will leave a lasting legacy of financial security for the town.

“If they had to pay full boat, they wouldn’t come to Rhode Island,” he said. “I’ll be in St. Anne’s Cemetery and this town will still have financial stability.”

Town Council is expected to vote Wednesday on a resolution authorizing Polisena to enter into a Community Partnership Agreement (CPA) between the town and Amazon, for the project planned for 2120 Hartford Ave.

Besides immediate financial gains, “the location of the Facility in the Town will enhance the business reputation of the Town, and will increase economic opportunity in the Town through the patronage of local small businesses and collateral new and increased employment created to support the Facility,” according to proposed Resolution No. 2021-29.

The resolution details the agreement between Johnston and Amazon.com Services LLC, a Delaware limited liability company planning to build its newest facility across a forested section of lots off Hartford Avenue, near the road’s intersection with Route 295.

The documents describe the 195-acre section of mostly woodland as “a challenging site for development.”

Without the Amazon deal, “that property would never get developed,” Polisena said.

A preliminary site plan, environmental and traffic studies have already cleared the Johnston Planning Board.

Amazon could start building immediately if they wanted to pay the same tax rates as any other Johnston business. However, construction has been awaiting a tax agreement between the company and the town.

Community funding

The agreement lists a dozen promised allocations to Johnston for a variety of community improvements.

The first section of Resolution No. 2021-30 tackles traffic concerns at the site and future road improvements.

A proposed Construction Funding Agreement between Amazon and the town promises funding for “certain off-site roadway improvements to the surrounding roadways, such improvements being identified by the Rhode Island Department of Transportation as being necessary prior to the proposal for the Project.”

Hartford Avenue is also Route 6, a state highway plagued by safety concerns long before any public utterance of the Amazon project.

A Route 6 center barrier and jug handles, as well as Belfield Drive alterations, are planned for surrounding roads.

If and when the Amazon facility opens, the more than 1,500 projected employees will need to commute to the site somehow. A large influx of tractor-trailers – estimates range from 300-600 a day – will also be making their way to the facility.

“Amazon shall encourage its employees and visitors of the Facility to carpool, and use public transportation and car sharing services,” according to the CPA.

Amazon will spend up to $90,000 annually to purchase RIPTA bus passes for employees of the facility (based on actual employee demand) during the first 10 years of operation.

Polisena said the bus passes will help commuters from Central Falls, Pawtucket, Providence and Woonsocket make their way to the Johnston facility.

Then, one to three years following the opening of the facility, Amazon will contribute “up to $100,000 for a traffic mitigation study to measure volumes and levels of service at peak periods (taking into account peak seasonal patterns) to determine any traffic and transit improvements that may be warranted to mitigate the Facility’s impacts on area roadways, and to enhance access to the Facility and the quality of traffic circulation for residents and other businesses.”

Within one year after completion of the traffic study, Amazon will pledge to contribute up to $1,000,000 for “post construction traffic mitigation equipment and improvements.”

Institutional windfall

The next section of the CPA describes Amazon-funded employment training and education opportunities.

The company will hold at least three hiring events to promote job openings, and promises to hold the “first job fair” in Johnston.

Over the 20-year life of the tax agreement, Amazon will contribute $582,500 annually toward funding a “Johnston High School Pathway Program, including, but not limited to a P-Tech career pathway program for Johnston High School students.”

P-Tech refers to Pathways in Technology Early College High School, according to DiLullo.

If the agreements are approved, Amazon will also make a $400,000 one-time payment to cover the program’s initiation costs.

“Basically, the focus of that program will be on both business and health care,” DiLullo said.

Those two career paths have been identified by the state as fields in high demand.

The company will also promise to make five annual payments of $250,000 (totaling $1,250,000) toward Rhode Island Municipal Education and Training Initiatives.

Public safety budgets in town will also receive a slice of the pie. Amazon will make 10 annual $538,000 payments to the town’s “public safety operations.”

The money will be split between the police and fire departments, Polisena said. And with the additional funding, the mayor expects to add at least one more firefighter to each shift covering the Hartford Avenue west-end fire station.

Amazon has promised to support several other community institutions following approval of the tax agreement.

Johnston youth sports will receive a $50,000 payment following “commencement of full delivery operations” at the facility.

The Johnston Senior Center will receive a $100,000 payment.

“We have no comment at this time because we just found out this week,” Johnston Senior Center Director Matt Bolton said Tuesday. “We’re excited at the possibility to use that money to help the seniors.”

Bolton and administrators at the Senior Center plan to discuss possible ways to spend the money, if the agreement is ratified.

The Johnston Municipal Land Trust stands to gain $250,000 from the deal.

And Johnston Memorial Park will receive a $100,000 payment from Amazon.

The company has also pledged $2,750,000 (payable in $550,000 annual installments) toward Rhode Island’s Small Business Assistance Program (SBAP), the state’s primary small business assistance program.

Amazon, benefits

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