E-commerce giant Amazon plans to expand its presence in Iowa, coming off soaring profits as consumers flocked to online retailers during the COVID-19 pandemic. And all indications are Davenport is next on its list.
The online retailer signed a lease agreement in March to move into an Ankeny warehouse, according Polk County property records. Meanwhile, Davenport aldermen will meet next week to approve a development agreement with Seefried Industrial Properties to build a 2.9 million-square-foot distribution center immediately north of Interstate 80 and west of the Davenport Municipal Airport for an unnamed client, with the potential to create more than 1,000 permanent jobs.
Seefried Industrial Properties describes itself on its website as "a longtime Amazon development and project management partner."
The new projects would give the company at least six warehouses in Iowa, The Des Moines Register reported. Amazon opened a 645,000-square-foot fulfillment center last year in Bondurant — its first in Iowa. The company also operates delivery stations and sorting facilities in Bondurant, Grimes and Iowa City.
Davenport city officials remain tight-lipped about the unnamed company looking to bring those jobs. City officials, Greater Davenport Redevelopment Corporation and Quad Cities Chamber of Commerce, have declined to name the company behind the deal, citing a non-disclosure agreement.
All appearances, however, strongly suggest it will be an Amazon fulfillment center, according to newly released records that shed more light on the planned distribution warehouse.
The planned development would cost $250 million — the same estimate developers provided for the Bondurant fulfillment center — and much more than the "at least $100 million" cost figure mentioned in the sparse, four-page development agreement available on the city's website.
That's according to information contained in the city's 49-page application seeking $3.1 million in grant funding from the Iowa Department of Transportation to cover most of the expenses to upgrade nearby streets and intersections to accommodate increased traffic from the new warehouse development.
The development agreement would required the city to undertake about $3.9 million worth of improvements to extend, widen and add turn lanes to nearby streets.
The grant application states that the Davenport distribution center would create more than 1,000 permanent jobs at a minimum wage of $15 an hour and full benefits. Amazon in 2018 raised its minimum wage to $15/hour for its U.S. workers, after facing pressure to boost compensation in its fulfillment centers and other facilities.
The unnamed company would look to employ 1,000 position within three years, and the developer would like to begin construction by summer 2021, according to West Des Moines engineering and architecture firm Shive-Hattery, which prepared the grant application on behalf of the city of Davenport.
The vast majority of the positions created would be associates who work selecting, packing and shipping customer orders, according to the grant application. Remaining positions would include salaried managers and human resources and finance professionals, with more than 100 out of the planned 1,000-plus jobs earning $60,000 or more. More than 40 jobs would earn $80,000 or more, per the application.
It describes the four principles of the company that would occupy the warehouse as: "customer obsession rather than competitor focus, passion for invention, commitment to operational excellence and long-term thinking." The language is lifted directly from Amazon's website.
Additionally, the grant application states that the company had "1,298,000 full-time and part-time employees" at the end of last year. That is the same figure Amazon reported in its 2020 annual financial report.
Spokespeople for Amazon and Seefried Industrial Properties did not respond Friday to messages seeking comment about the project.
Asked what it would mean for the region to have Amazon in Davenport, Mayor Mike Matson responded: "I don't know. I'd have to see when that happens."
Matson and city officials have previously said that beyond the infrastructure changes needed there has been no discussion about any tax breaks or other financial incentives for the company Seefried represents.
However, Davenport's Iowa DOT grant application states the city is offering to provide the warehouse's owner a 10-year tax abatement on the improved value of the land. The property tax exemption decreases over time, with an 80% abatement in the first year after the development is finished and a 20% abatement in the ninth and 10th years.
In year 11, the full assessed valuation of the new development comes on to the tax rolls, with an estimated minimum valuation of $75 million.
Matson on Friday said the 158 acres of property on which the warehouse would be built is located within the city's Urban Revitalization Tax Exemption zone, making the project eligible for a rebate on a portion of property taxes a company pays on new development. The program seeks to encourage private investment in targeted areas of the city by softening the tax burden that can result from new development.
"So anyone that does that could apply" for the tax incentive, Matson said. "I have no idea if they will, or are, or whatever. ... I have no idea of any other (incentives) we are doing for anybody, and I don't foresee that."
As for why the language pertaining to the tax abatement was not included in the development agreement, Alderman Kyle Gripp, at-large, said the company was more concerned about having assurances the city would be responsible for needed intersections improvements, regardless of whether it receives grant funding.
The Iowa Transportation Commission is scheduled to meet Tuesday to consider Davenport's grant request.
The Quad Cities Chamber, Greater Davenport Redevelopment Corporation and Bi-State Regional Commission have all submitted letters to the Iowa DOT in support of the project and the city's request for grant funding.
"This project diversifies Davenport's tax base and brings jobs to the community and region," Quad Cities Chamber President & CEO Paul Rumler wrote.