State and city officials said Wednesday that Amazon.com's new warehouse in Southeast Baltimore will receive more than $43 million in tax credits — incentives they say helped lure the large company to Maryland.
The company and its landlord, Duke Realty Corp., are eligible for much of the incentive package by locating at the site of the former General Motors plant, which the state has determined to be an impoverished area.
Dominick Murray, Maryland's secretary for economic development, said the state worked on the deal for more than a year.
"When we got the word they were investigating coming out here, we were all over it," he said. "The shippers are happy. The workers are happy. The port's happy. Everybody's happy."
Amazon announced late Tuesday that it would open a 1 million-square-foot distribution center next year that will employ 1,000 people at the General Motors site. The company plans to hire locally for jobs packing and shipping books, electronics and other goods.
The Maryland Department of Business and Economic Development and the Baltimore Development Corporation helped orchestrate the incentive package, which includes an estimated $35.3 million in Enterprise Zone tax credits and $5.5 million in One Maryland tax credits, both of which are designed to promote economic growth in impoverished areas. The deal also includes an estimated $1.7 million in estimated tax credits for job creation and an undetermined amount of credits for building in a brownfield — a site that was previously contaminated.
The state will also provide Amazon with a $1.25 million loan, which could be forgiven, and the city will provide a $125,000 loan, officials said. The company also will receive discounts from Baltimore Gas and Electric Co., officials said.
Maryland will loan Amazon $750,000 at a 3 percent interest rate when it signs a lease with Duke Realty to occupy at least 900,000 square feet and invest $2 million in project costs, officials said. The company will receive a $500,000 loan if it employs at least 1,000 full-time workers by the end of 2015.
If the company keeps that staffing level for 10 years and invests at least $175 million in the project, the loans will be forgiven, Murray said.
The Baltimore distribution center could be a key part of the company's emerging strategy of reaching customers for same-day delivery. Cargo leaving the port of Baltimore by truck is within an overnight drive of two-thirds of America's population, Murray said.
In their discussions with the company, Amazon was most concerned with making sure the area had enough workers to meet its staffing needs, Murray said.
"We highlighted our workforce," he said.
Neither city nor state officials said they were particularly concerned about a 2011 investigation published by The Morning Call newspaper that an Amazon warehouse in Pennsylvania's Lehigh Valley subjected workers to "brutal heat" as they were "pushed to work at a pace many could not sustain."
During summer heat waves, temperatures in the warehouse soared above 100 degrees, and Amazon arranged to have paramedics parked in ambulances outside, ready to treat any workers who became dehydrated or suffered other forms of heat stress, the newspaper reported. An emergency room doctor called federal regulators to report an "unsafe environment" after he treated several Amazon warehouse workers — who were paid $11 or $12 an hour — for heat-related problems, the paper found.
Kelly Cheeseman, an Amazon spokeswoman, said the Baltimore site will have air conditioning.
"We have an open-door policy that allows associates to bring their comments, questions and concerns directly to their management teams," she said in an email. "We feel we can best address our associate's needs by encouraging this open-door policy in our workplace."
Baltimore City Councilman Robert W. Curran said Amazon will have to abide by state regulations designed to prevent unsafe work conditions.
"Obviously they have to follow the law," he said.
The new distribution center, expected to open in 2014, would revive a 2.8 million-square-foot site where city and state officials have tried to lure a large employer for several years. The 65-acre site is currently assessed at $9.8 million.
Amazon picked the Southeast Baltimore site because of its proximity to a large customer base, officials said. Currently, the Amazon warehouse closest to Baltimore is more than 70 miles away in Middletown, Del. The closest distribution center to Washington is in Richmond, Va.
Duke Realty, an Indiana-based commercial real estate company handling the building's development, submitted permit requests this summer describing the planned warehouse as a distribution center with 50-foot ceilings and nearly 2,000 parking spots.
In the documents approved by the city, Duke said the facility could employ up to 2,600 people. Cheeseman said the company plans for about 1,000 full-time jobs, but could add more in the future. Baltimore Mayor Stephanie Rawlings-Blake said Duke Realty also would be recruiting other tenants.
Amazon said its jobs pay more than the typical retail position, but working in a warehouse is not retail. The online retailer reportedly pays around $12 an hour for workers in its distribution facilities.
That's in line with what such workers typically earn in the Baltimore region, according to a report released Wednesday by Opportunity Collaborative. The report, developed by the labor market research firm RDA Global, said a full-time worker in Baltimore doing packaging and handling earns a mean wage of $12 an hour, which works out to about $25,000 a year.
The city's per capita income in 2011 was just under $24,000 a year, according to the U.S. census.
Rawlings-Blake said the jobs would provide "full benefits," and that the city is in talks with the state to provide bus service to the site. She said the city was helping Amazon recruit qualified applicants for the jobs.
"One thousand jobs is nothing to sneeze at," Rawlings-Blake said. "We know how competitive it is. We also know how advantageous the Baltimore City location is. ... There were other cities champing at the bit to get that opportunity."