New Amazon warehouse on track to bring 1,000 jobs to Daytona Beach

DAYTONA BEACH — The mystery company that's been quietly hammering out a deal with city officials behind closed doors to bring 1,000 new full-time jobs to Daytona Beach is a mystery no more.

Amazon.

At Wednesday night's Daytona Beach City Commission meeting, Deputy City Manager Dru Driscoll announced that Amazon wants to build and operate what it calls a fulfillment center on a vacant 211-acre site south of the city's airport.

The mayor and a majority of city commissioners approved a $4 million economic incentive package that the Seattle-based e-commerce giant wanted to move forward with its plans to build a 2.8 million-square-foot distribution center on the pasture land long owned by NASCAR.

So if all goes as planned, the new five-story building that will house employees making a minimum of $15 per hour will open in about two years.

"I love this project," said City Commissioner Stacy Cantu, whose zone includes the warehouse site. "I think it will put us on the map."

The new 2.8 million-square-foot warehouse will be massive compared to the 886,000-square-foot Deltona Amazon facility, the 844,000-square-foot Volusia Mall and the 525,000-square-foot Trader Joe's distribution warehouse in Daytona Beach.

The plan is for NASCAR to lease the land to Amazon for at least 20 years. The newly approved city agreement also promises Amazon up to $4 million in property tax rebates over five years as long as it provides at least 1,000 new employees by 2028 making the minimum pay of $31,200 per year or more.

"With the positive growth in our community over the last several years, we’re always looking for opportunities in which NASCAR can contribute to these efforts," Lesa France Kennedy, Executive Vice Chairperson of NASCAR, said in a written statement. "We continue to evaluate the best ways to utilize our property to promote economic development. Bringing new businesses, new industries and new jobs to the greater Volusia County economy continues to be a primary focus area of our business."

Read more: Will Daytona's 'Project Tarpon' be a huge Amazon distribution center?

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Amazon was revealed in April as the mystery company behind a Virginia distribution center being built now on land north of Richmond Raceway, another one of Daytona Beach-based NASCAR's motorsports tracks, just like Daytona International Speedway.

Secrecy irks some city commissioners

The Daytona Beach project had been codenamed "Project Tarpon." While details of the economic incentive agreement for the new $200 million first mile center were made public a week ago, new City Commissioner Ken Strickland is not happy about the secrecy.

Strickland, who was sworn in as a commissioner two weeks ago, voted against the Amazon economic incentive deal as well as another measure on Wednesday night's meeting agenda that would make the warehouse project possible.

The other measure, which will get a final vote next year, has to do with a future land use change Amazon needs for the warehouse site on the property approximately 1,200 feet southeast of the intersection of Williamson Boulevard and Bellevue Avenue.

The current land uses are for City Commercial Amusement and Volusia County Activity Center - Industrial. Amazon wants a mixed use designation for the 211 acres. When it came time to vote on that, before Amazon had been identified at the meeting, Strickland asked the attorney representing NASCAR's property if Amazon was behind the venture.

Cobb Cole attorney Mark Watts said only that he had read that in newspaper articles, and that the property use change was being sought to consolidate uses for the land.

"It would be helpful if we knew why we were changing the use," Strickland said. "I sure would like to know what I was voting about."

"Yeah," chimed in City Commissioner Ruth Trager, who along with City Commissioner Quanita May also voted again the land use change.

"If you don't want to tell us what you're doing or what's going to happen with that land, it doesn't really make sense for us to vote to change it when we don't know what we're voting for," Strickland said.

Mayor Derrick Henry told Strickland he would find out the company name in just a few minutes when the economic incentive deal came up on the agenda. And City Attorney Robert Jagger noted that commissioners would still have to vote on rezoning the land next year.

That wasn't enough to sway Trager, either.

"I don't think it's fair to ask us to vote on something when we don't know what it is," she said.

The land use vote settled at 4-3, enough for it to pass.

Trager did wind up voting for the economic incentive agreement, as did the rest of the commission with the exception of Strickland.

Some unimpressed with $15/hour

Construction on the new Daytona Beach Amazon building should begin late next year and be substantially complete by Dec. 31, 2023. If that deadline is blown, the company won't get the millions in city property tax rebates.

A Nov. 17 memo from Driscoll to Daytona Beach City Manager Deric Feacher noted that the distribution center will complement the planned growth of Embry-Riddle Aeronautical University's research and development park located directly to the east.

One of the projects Embry-Riddle's research park has been involved in is drone technology. Amazon has already begun experimenting with the use of drones to deliver goods in other parts of the country.

Driscoll also wrote in his memo that the new facility "is anticipated to attract similar and/or ancillary businesses to further develop the proposed mixed-use area."

Once building construction is done, the company will be required to create a set number of new jobs per year, reaching at least 1,000 after five years. The positions can't be filled by the Deltona Amazon warehouse downsizing positions and transferring them to Daytona Beach, Driscoll noted.

With Daytona Beach's 6.4% unemployment rate in the last quarter, the jobs are needed, he said. The $31,200 annual pay will also be a step up for some in a city with a per capita annual income of $24,360 in 2019.

But local resident Anne Ruby pointed out that someone making the $31,200 per year can't afford local market rate rents that are well above $1,000 per month. Following the rule of thumb not to pay more than a third of income toward rent, a person with a $31,200 salary could go as high as $800 per month for rent.

Henry hopes the $15 per hour pay pressures local companies to raise their salaries as well. But he said the jobs won't be on par with the General Electric plant positions Daytona Beach got in 1962.

"We haven't hit a gold mine," he said.

More about the city's Amazon deal

The new positions will provide access to standard company benefits, and some of the jobs will pay more than $15 per hour.

Driscoll outlined a full menu of benefits the employees can expect, including health insurance, life insurance and a 401(k) retirement plan. Employees would have to pay for a portion of their insurance coverage, and it's not clear if the company would match employee 401(k) contributions.

The company will also offer paid parental leave and grants to seek college degrees that would cover 95% of tuition costs. Vocational training grants would also be offered, he said.

The economic incentives for Amazon will essentially be partial reimbursements of the company's city property tax payments for the first five years of operation. The company will receive a 75% city property tax break in both the first and second year. That tax break will be reduced to 50% in the third and fourth year, and will shrink to 25% in the final year of the agreement.

The reimbursements will be capped at $4 million over the five-year period. The money will come from the increased amount of property tax payments generated by improvements to the land, not the base amount being paid now on the property.

The city is still estimated to collect about $2.4 million in property taxes from the site over the first five years, Driscoll said.

Once the tax breaks cease, the distribution center is expected to generate at least $1 million per year in city property tax payments.

Strickland took issue with the $4 million or so the city will be paying out.

"Why in the world are we giving a company that is that strong financially $4 million?" he asked.

Strickland said he thinks the lure of locating at the intersection of I-95 and I-4 is so strong that Amazon would build the new warehouse even without the city incentive.

More about Amazon's Florida plans

Amazon has been aggressively growing its distribution network in Florida as part of its push to offer more goods that can be delivered either the same day or the next day after an online order is placed.

In September 2019, Amazon opened its first logistics facility in Volusia County, a 66,000-square-foot "last-mile delivery station" on the Mason Avenue extension just north of Dunn Avenue in Daytona Beach. The last-mile station is just off of Interstate 95, roughly four miles north of the site for Project Tarpon.

In September last year, the e-commerce giant opened a 1.4 million-square-foot distribution center along Interstate 4 in Deltona that is the largest built to date in the county.

Amazon recently announced plans to build a fulfillment center in Port St. Lucie along with five new last-mile delivery stations in Florida. The company currently operates more than 50 sites in Florida that support customer fulfillment and delivery operations.

The developer of the Amazon distribution center in Deltona was Atlanta-based Seefried Industrial Properties. But the developer that is partnering with NASCAR to build Project Tarpon — Hillwood Development, a Ross Perot Jr.-founded company based in Dallas, Texas — also has done distribution center work for Amazon as well as e-commerce heavyweight Wayfair in other parts of the country.

Commercial real estate agent David Murphy, an executive vice president with CBRE in Orlando, told a gathering of the Volusia County Association for Responsible Development this past summer that Daytona Beach and Volusia County are poised to become a regional distribution hub for e-commerce companies in the coming years.

The reasons: the county's prime location at the intersection of I-95 and I-4 as well as the presence of Daytona Beach International Airport, another potential way for cargo shipments to be received, and the east Central Florida region's fast-growing population.

"I think in the next year or two, it's going to be mind-blowing to see the amount of industrial activity that comes in here," Murphy told attendees of the VCARD Real Estate Values Forum in June. "If you look at it from a logistics standpoint, we're perfectly situated here in Volusia County."

You can contact Eileen at Eileen.Zaffiro@news-jrnl.com

This article originally appeared on The Daytona Beach News-Journal: Amazon planning to build new Daytona Beach warehouse by 2024