Amazon would receive $3 million in local tax rebates in exchange for employing 1,000 Kern County residents at the 2.6 million-square-foot distribution center the retail giant is building next to Meadows Field Airport, according to a proposal released Thursday.

The incentives package, scheduled for a vote Tuesday by the county Board of Supervisors, would give annual refunds to one of the world's most valuable companies in an amount equal to half its combined property, sales and use tax bills — an estimated $575,000 per year before the rebate — for an estimated 11 years.

In exchange, Amazon would be required to create 1,000 new jobs for Kern County residents with an average annual wage of $31,000 per job. At least 900 of those positions would have to be filled by October 2021.

The offer would expire in 30 years if the rebates have not been used by that time. The county could rescind the package at any time if Amazon does not meet and keep up its job-creation obligations under the agreement.

"The strength in the incentive being proposed is the time-bound nature of the job creation, coupled with the requirement that these are NEW jobs for Kern County residents," county spokeswoman Megan Person said by email. "We have the ability to ensure our residents get these jobs, get paid a sustainable wage and they do it by a specific date."

The incentive, if approved, would be the second time the county has used the Advance Kern Incentive Program the board created in 2017. The first, approved by the board in August, offered L'Oreal USA $2.3 million in tax rebates in exchange for the company's pledge to create 155 new jobs at the distribution center it plans to open at the Tejon Ranch Commerce Center south of Bakersfield. No other Advance Kern incentives are currently under negotiation, Person wrote.

County officials confirmed in September Amazon's plan to open a "fulfillment" center just north of Bakersfield at the 138-acre Landings Logistics Center LLC just north of Merle Haggard Drive. Industry observers have said the center might ultimately employ up to 2,000 people.

Amazon has not publicly confirmed its plan to open a distribution center in Kern. A company representative did not immediately respond to a request for comment on the incentives package.

John Cox can be reached at 661-395-7404. Follow him on Twitter: @TheThirdGraf.

(17) comments

Zoe Mason

Nice article, but i already seen it there https://www.google.com/

yorkies2014

? what was the environmental impact....maybe their trucks R green...is Bezos a tree hugger? .....dang..... Amazon scored an F for energy transparency, a D for renewable commitment policies and a C for energy efficiency on Greenpeace’s 2017 Clicking Green report. The annual report uses submissions by the company to Greenpeace, investor reports, investment announcements and media stories.
“They’re one of the least transparent companies, tech or otherwise, of their size that don’t report their greenhouse gas emissions,” Gary Cook, a corporate campaigner at Greenpeace, told HuffPost by phone. “They’ve certainly done some sizable renewable energy deals in the last two years, but if you don’t know how much they’re solving for in terms of energy demand and smog, it’s hard to assess how big these are.”

KernCommunications

I want to add some clarity around this statement as it's confusing in the way it's written: "...[the incentive] would give annual refunds to one of the world's most valuable companies in an amount equal to half its combined property, sales and use tax bills — an estimated $575,000 per year before the rebate — for an estimated 11 years."
Through the incentive program every organization pays their full tax bill, for property, sales and use taxes. After the taxes have been received and a review has been done to ensure the incentive reciepient has met their obligations, the County will rebate some of already paid taxes. That rebate is currently estimated at $287,500 annually. The maximum amount allowed to be rebated in this offer would be 3$ million. The time it's paid back will vary depending on the actual property, sales, and use tax collected. Last thing to mention: The ripple effect of these 1,000 jobs will foster an additional 450 jobs in the local economy worth an estimated $25 million in annual compensation and $84 million in annual sales output. For our 287,500 rebate we see AT LEAST $140 million poured back into the local economy annually.

Jay McLean

According to the 2018 Kern County Market Overview published by the Kern County Economic Development Corporation 26.1% of Kern residents have NO HS diploma and earn an annual average salary of $17K; 27.3% have only a HS diploma and earn an average annual salary of $27K. So over half our population has a HS diploma or less and earns an average annual salary of $27K or less. Amazon is contractually pledging to create and sustain at least 1,000 new jobs at $31K each to specifically employ Kern County residents. Some estimate that those jobs will grow to 2,500. There's some math for you.

gkozy1

I understand the necessity to pay a ransom to businesses to get them to move. Just as I understand that lower interest rates drive the stockmarket.
I also understand the lower interest rates do not improve the health/value of stocks. Just the price.

That's why I suggested there should be a national law against paying these ransoms.

Wisconsin does not expect to break even on their Foxcom deal for 40 years if ever. And I bet taxes continue to rise for the general taxpayer in perpetuity.

We have bunches of tax items on next weeks elections. What a ridiculous time to bring up the Amazon welfare package.

Police, sherriff, roads, schools and now Amazon.

Jay McLean

People, Amazon is being asked to create at least 1,000 new jobs that pay $31,000 annually by a certain date, and that those jobs specifically go to local residents. In exchange for meeting, then sustaining those obligations, the County is saying it will provide a tax REBATE of no more than $3 million in value, which seems fairly small to me compared to the $30 million Fresno agreed to. According to the information the County put out today, "the potential indirect and induced economic impacts on our local economy created by the addition of these 1,000 new jobs are significant. Based on a study developed by Rieger & Associates on behalf of the Kern Economic Development Corporation, using Bakersfield and County economic data, whether the business is large or small, the impact of just 100 new jobs tends to cause the following annual ripple-effect spending in the following local industries: $7.4 million in residential real estate transactions; $1.4 million in auto and auto insurance purchases; $962K in entertainment and restaurants; 825K in clothing and furniture purchases; and $2.4 million in business services. Overall, according to the County, "Amazons business activities here will generate an additional 450 jobs in the local economy, generating an additional $25.8 million in indirect and induced compensation and an estimated $84.8 million in indirect and induced sales on an annual basis."

JimmyDude

It's a good deal and, as was previously mentioned, If Amazon doesn't get a good deal in Bakersfield, they'll go elsewhere. My point was that you wouldn't make this deal after the company has acquired the land and broken ground - they're committed. Anyway - Go Amazon! Go Bakersfield!

TimRoss

Kern County has unemployment rate of 6.6% vs 3.9% for California and 3.6% for the nation. Local people want to work and need full time jobs. Minimum wage in California is $11 per hour vs. Amazon's minimum wage of $15 per hour. The lowest paid Amazon employees will get 36% more per hour than CA minimum wage. Other Amazon employees will make higher wages. Under this deal we should expect at least $310 million in wages over the first ten years for just 1000 employees vs $3 million tax discount over the same 10 years. Would Amazon have come to Bakersfield without the “deal”? Perhaps. Amazon choosing Kern County may send a signal to other large employers. I say lets find 5 more companies who want to come, build and employee at least 500 people each and offer similar deals. Working people are not homeless and are less dependent on welfare subsidies.

JimmyDude

concur

She Dee

So what I hear the Kern County Board saying is that they don't WANT people moving into their territory & buying homes. Instead, they would rather have workers who are renting in hopes of saving money to someday buy a home. In other words, I smell another real estate investment scheme. This is why a lot of people leave Bakersfield & never come back. It is run by old school,scam artists. That's my take on this stupid "incentive" idea. I hope Amazon tells you NO!

Athanasios

I have to say I find it funny that no one seems to think that ANY company would build a large distribution center in Kern County without the expectation of some type of tax credits. That’s how the game is played. In the end the county will still come out ahead by having more job opportunities, increased sales taxes from those who are employed, and property taxes if some of those employed buy homes. Of course, we could take the “principled” view of not supporting billionaires or their companies, but that just means they will go somewhere else more inviting (and there’s always “somewhere else”).

gkozy1

Theses incentives rarely work. Even the Foxcom deal in Wisconsin is turning out to be a loser.

These incentives need to be banned Nationwide.
Amazon is going to hurt small businesses by creating labor shortage and forcing up wages everywhere.

And this will not help the minimum wage earners even if they receive a substantial pay raise. Any raise will be muted by a cost of living increase.

For instance, the federal tax changes have been muted by the increased cost of fuel alone.

When the rest of inflation is consider the change is a net negative as far as expendable kncome

Outdoors

Sorry about the errors in the previous post. I wanted to edit it after seeing the posted product. I didn’t find a way to do that but hopefully you understand the direction that my concern is taking.

Outdoors

So, do I have this right? We are voting on a sales tax increase with the county because they can’t balance the budget Plus the sheriff would like additional deputies but we’re going to be up at Amazon and 11 year multi million dollar tax break. With inflation we have no idea how large that Tech could play out two in total hours Plus the Cheryl would like additional diabetes but we’re going to give Amazon and 11 year multi million dollar tax break. With inflation we have no idea how large that Tech could play out two in total dollars. I’ve lived in the same house for 40 years exactly and my taxes began at about $1100 prayer now are up to $3400 per year. About $500 and that is because I put in a three bay shop that has a dirt floor in electricity. Seems to me like property taxes have gone up substantially And maybe that’s their bases for giving away public money to a very successful corporation. But the rationale doesn’t feel right and the timing doesn’t seem right either.

JimmyDude

If they're building a 2.6mm sq foot facility that will take 2,000 people to run - why do they need this incentive to hire? I bet this deal was already made. Not saying its a bad thing - its just a thing.

lrlopez74

How pathetic. Kern County is trying bribe the world's richest man into setting up shop by making him even richer. This is pathetic, Kern County. No wonder there are so many homeless people and poor people in Kern County. You are literally throwing money that could be used to help people survive at the RICHEST MAN ALIVE.

Inconvenient Truth

Here's a little Math for the Board of Supervisors:
Jeff Bezos' net worth = $130,000,000,000.00 (Yes, that's 130 BILLION).
Number of Amazon Employees WORLDWIDE = 566,000 (Yes, that's over 1/2 MILLION)
Average Amazon Employee Salary = $28,446 per year

Jeff Bezos' net worth divided amongst his employees = $229,682 per Employee

That's OVER 8 YEARS OF SALARY FOR EACH EMPLOYEE!

Now, a question for the Board:

How many Kern County 'brick and mortar' businesses have closed (and will continue to close) as Amazon drives them out of business?

Bonus question:
How much tax revenue has Kern County Lost (and will continue to lose) as local 'brick and mortar' business are forced out of business by Amazon?

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