Amazon.com Inc. is moving forward with plans to build a distribution center in Shakopee — without direct tax incentives for the company.
The Shakopee City Council on Tuesday passed a nearly $5.8 million tax-increment financing district to pay for road improvements around the distribution center site. The action came a day after the online retailer decided to forgo tax incentives as part of the TIF package.
The 820,000-square-foot distribution center is expected to create 1,000 full-time jobs and speed up Amazon deliveries in the region.
The price of much-needed infrastructure fixes in the area came in higher than expected — about $8 million. City officials are hopeful that the improvements will help existing businesses and attract new ones.
"We're definitely trying to keep up with the growth that we're having in this area," said Economic Development Coordinator Samantha DiMaggio.
The distribution center is expected to open in 2016. As the countdown begins, transit for employees will be one of the biggest issues to tackle. There's already a shortage of low-wage workers in Shakopee, and some have questioned the feasibility of creating 1,000 new jobs in that bracket.
Amazon has said it plans to draw employees from across the region, but without much transit to speak of in Shakopee, it's been unclear how those people would get to work.
Discussions are ongoing at the city, county and state levels. Met Council District 4 representative Deb Barber noted at Tuesday's meeting that the Legislature set aside $2 million for suburban transit providers, which could help with Shakopee's needs. "I think it's the beginning of a number of discussions that will help some of our workforce transit needs," she said.
The total TIF package for the Shakopee distribution center was originally estimated at $6.4 million. Most of that was slated for road improvements, but about $3.3 million was initially earmarked for Amazon.
But after Shakopee reduced the size of the package, Amazon's portion shrank to about $1 million.
Some critics bristled at the idea of Shakopee giving tax incentives to Amazon, saying that the online giant would probably build a center even without the city's financial support. Others questioned whether the city should help a company that has been criticized for its treatment of workers.
"That they are withdrawing their request for TIF is a sign that they want to be a part of this community," said Mayor Brad Tabke. "They don't want to cause any political strife with folks."