City approves $1.2 million in tax breaks for massive new Amazon facility in east Aurora

April 4, 2017

AURORA | Aurora city council Monday unanimously approved a resolution granting up to $1.18 million in tax breaks for Amazon to construct a 1 million-square-foot “fulfillment” center in east Aurora.

The agreement formalizes a deal city officials made with Amazon in previous closed-door talks. The company announced its plans to move to Aurora earlier this year.

The new “fulfillment” facility, expected to generate about $130 million in investments, comes on the heels of Amazon opening a 452,000-square-foot “sortation facility” at 19799 East 36th Drive in Majestic Commercenter last year. That site employs hundreds and is already operating.

The resolution approved Monday comes in the form of a 36-percent discount on the sales and use taxes the project incurs from certain construction materials and equipment that will be used at the site once it is operating, according to city documents.

Located at Prologis Park 70 near the nexus of Interstate 70 and E-470, the new warehouse is expected to bring about 1,000 new jobs boasting $30,297 in annual salary — and benefits — to the city.

The proposal includes a stipulation that would require Amazon to pay back a portion of the tax incentives if the number of jobs at the facility dips beneath projections in the coming decade, according to city documents. The rebates will only take effect once Amazon has created 900 jobs at the new plant.

The Amazon center is expected to generate about $6.5 million in taxes in the coming decade, according to Chad Argentar, the city’s economic and business development supervisor. Without the $1.1 million rebate, the city will still receive about $5.4 million in taxes from the company.

Council Members Brad Pierce and Bob Roth both underscored the notion that the deal is not a unilateral gift handed to Amazon.

“I want to make it very clear that whenever we have these incentives the city of Aurora is not writing a check to anybody,” Roth said at the council meeting. “We’re giving them a rebate of a portion of what they are generating.”

Yuriy Gorlov, director of business development at the Aurora Economic Development Council, confirmed Amazon has already signed a lease on the property.

“That’s all sealed and done with,” he said.

Argentar said the process of formalizing incentives several months after a company announces a new development is not uncommon.

“A company may decide to make an announcement or move forward with the location decision … before the agreement is formally approved,” he said. “They do so at their own risk, but they also do it with a good faith understanding that the city is not going to renege on a proposed incentive.”

Argentar said he has never seen the city double back on a proposed incentive package following a company’s formal announcement in his nearly decade-long tenure with Aurora.

“If the only reason why the city decides they’re not going to follow through on a proposed incentive is if a company decides to make their announcement ahead of time, I don’t think that would be good for Aurora’s reputation regarding future businesses moving here,” he said. “The next company that might be considering Aurora based on an incentive certainly would not do anything until every opportunity for the city to backtrack has passed.”

Staff writer Brandon Johansson contributed to this report.