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Online retail powerhouse Amazon confirmed a new 1.3 million-square-foot facility in Cumberland County last week, bringing with it hundreds of jobs and hundreds of thousands in property tax revenue.
The “fulfillment center,” where Amazon workers pack and ship online orders, is currently under construction at the Military Business Park in Fayetteville on Bragg Boulevard.
In an incentive package unanimously approved in November by both the Fayetteville City Council and the Cumberland County Board of Commissioners, the city and county will each grant Amazon $1.25 million toward construction costs, totaling $2.5 million.
This is if Amazon spends more than $5 million on the necessary relocation of a flare site, which is used when maintenance on a gas line is required. The company said it wanted the site relocated due to safety concerns about its close proximity to the facility, according to county documents.
After that $5 million spending mark, the city and county grants kick in at 50% of additional costs with the maximum at the $2.5 million mark.
To keep the grant money, Amazon will be required to create and maintain at least 500 jobs with an average annual wage at just under $33,000.
“It mitigates the additional costs the company may face regarding certain infrastructure improvements that are needed,” Robert Van Geons, president and CEO of Fayetteville Cumberland County Economic Development Corp., said in a phone interview Monday.
“In our case, because our incentives are paid based on performance, it mitigates risk for the community.”
The company will also be required to invest more than $100 million in real estate improvements.
The company would bring in more than $800,000 in annual property tax revenue for Cumberland County and up to $650,000 for Fayetteville, according to city and county documents.
Operations at the Amazon facility are set to begin in 2023.
How Amazon wages compare to other jobs in Cumberland
The 500 new jobs at Amazon will pay an average of $33,000 per year, and none of the jobs will pay below the company’s minimum of $15 an hour, which calculates to just over $31,000 annually.
“That in itself is positive,” Van Geons said. “That is above the average for a warehouse worker and a higher wage than many of our service-industry folks, which is a very large segment of our economy here in Cumberland County.”
According to the latest wage data from the U.S. Bureau of Labor Statistics in May 2020, package handlers in freight warehouses in Fayetteville are paid an annual average of just over $27,000, among over 1,300 workers.
Among the nearly 13,000 employees who work in food preparation, the annual average is about $22,500.
Retail workers make an average of just under $27,000.
Amazon’s average is even higher than that for laborers in Fayetteville’s construction industry, which is just below $32,000 in the latest BLS report.
And Van Geons said that the initial total of 500 jobs is a minimum. The county expects to see more job growth at Amazon going forward.
But Amazon’s average wage is still lower than the county’s average annual wage overall, which is around $45,500.
The company’s wages are also under what is needed to afford a two-bedroom apartment in Cumberland County. In its 2021 housing need report, the N.C. Housing Coalition estimates that just over $34,750 in annual income would be needed to afford a unit of that size in the county.
The N.C. Housing Coalition, along with most other affordable housing advocacy organizations, considers a home to be affordable if it takes up 30% or less of the resident’s income.
According to the organization’s report, nearly half of all renters, who are disproportionately low-wage service workers, pay more than 30% of their income on housing costs.
Even with the shortcomings of Amazon’s average wage, Van Geons said the increase in hourly wage would still increase many people’s incomes.
“It’s a step in the right direction for our community, that entry-level wage,” he said.
“Being able to come in and get a position that in some cases is five, six, seven dollars higher than what was available prior. … It will help people afford housing and all their expenses better than if it were not here.”
Cumberland’s high unemployment rate
In 2020, Cumberland County’s unemployment rate averaged 9.5%, according to BLS.
The rate is higher than the state average of 7.3% and the eighth-highest among all counties in North Carolina.
Even before the pandemic derailed the economy, Cumberland’s rate trended high. In 2019, the average was 5%, the 13th-highest county. North Carolina’s average unemployment rate that year was 3.8%.
Van Geons said Amazon’s arrival could start to change that.
“We do have higher-than-average unemployment here in North Carolina, compared to some of our peers,” he said. “This project is so welcomed in that way. It’ll provide jobs for those that haven’t been able to get back into the economy post-COVID.”
Correction: The $5 million that Amazon will receive and spend from Cumberland County and the city of Fayetteville will be used to relocate a flare site on a gas line. An earlier version of the article described the purpose of the funds incorrectly.