Amazon is building a fulfillment center in Oak Creek with 50 percent more jobs than originally expected in a facility far larger than the Kenosha fulfillment center built in 2015.
According to City Administrator Andrew Vickers, Oak Creek's fulfillment center will be constructed at 9700 S.13th St. in Ryan Business Park and will employ 1,500 people full-time — 500 more positions than prior reports had estimated.
Earth moving has begun on the site and it’s anticipated the building will be completed and occupied for the first quarter of 2020. Those promised positions are anticipated to generate $40 million in annual gross wages by 2021.
“Overnight, Amazon will become the largest employer and largest single-parcel taxpayer in the city,” Vickers said.
The common council approved a development agreement for the four-story, 2.6 million-square-foot fulfillment facility on 75 acres adjacent to the I-94/Highway 100 (Ryan Road) interchange on Tuesday, Nov. 20.
Not only will this location be larger than the Kenosha fulfillment center (2.6 million square feet compared with 1.5 million square feet), it will likely include more robotics, Vickers said. While the Kenosha site has a wider footprint on 165 acres, this four-story development is a different design for a fulfillment center — up instead of out. The Kenosha distribution center employs about 1,100 people.
Ryan Business Park is a joint venture between Capstone Quadrangle of Waukesha and General Capital Group of Fox Point. Hillwood Development, LLC owns the Amazon site and will develop the property and lease it to Amazon, according to Vickers.
Traffic concerns and funding
Tax Incremental Financing District No.16 was created for this project by the city earlier in 2018. As part of the TIF package, Hillwood Development will fund the infrastructure costs of up to $13.4 million, mostly related to the rebuilding of 13th Street as well as some improvements to Ryan Road.
In a TIF district, the added property tax revenue generated by a development is diverted from the schools, county, city and other taxing bodies and goes to pay for public improvements within the district until the debt for that work is retired. At that point, the tax increment is restored for the taxing bodies.
Vickers said one of the biggest concerns from residents has been traffic — expected to be about 150 unique trucks every day. He said that made mitigation of congestion a top priority, and that led to the rebuilding of 13th Street and improving Ryan Road.
Alderman Chris Guzikowski said he still has concerns with traffic flow on 13th Street. He said his record shows he does support business, “but tonight it’s bittersweet.”
The city will refund Hillwood Development only through new property taxes collected from the development for roadway and utility costs up to $3.5 million of reimbursable costs to prepare the site for development.
According to Vickers, the city wasn’t aware Amazon was the tenant until May. He said after the internet giant considered a site in Milwaukee’s Century City, Oak Creek was next in line.
“We were the next . . . the optimal site at that point,” Vickers said.
In the development agreement, Amazon committed to not less than a $200 million investment — $100 million of real property improvements and $100 million of personal property installed in the facility. The online retail giant also guaranteed the minimum of 1,500 full-time jobs with annual gross wages of $40 million by the end of 2021.
Ryan Wilson, manager of economic development at Amazon, said this was a year-long search for the right site that would meet the needed timelines as well as infrastructure needs.
“We move incredibly fast,” he said.
Wilson emphasized the 1,500 jobs promised will be full time and will offer the same benefits corporate employees receive. Additionally, he shared some information on Amazon’s Career Choice program that prepays a portion of tuition for employees to further their education. A classroom will be on-site in Oak Creek facility for employees to, for example, get their CDL, he said.
Alderman Ken Gehl called the project an “economic engine for all of southeast Wisconsin.”
Mayor Dan Bukiewicz said in a statement that several factors made the project attractive, such as the proximity to I-94, which made “perfect sense for our community from a land use planning standpoint.”
At the council meeting, Bukiewicz acknowledged not everyone in the city would be happy, however, specifically those who live close to the site.
“It’s impossible to please everybody but you have to lead for the greater good of all,” he said.
Ryan Business Park
Ryan Business Park was many years in the making. Mike Faber of Capstone Quadrangle, the park developer, worked for over a decade to assemble various portions of land into what later became the business park.
One issue with preparing the site was a swath of land down the center, which was owned by Milwaukee County. Vickers said if an agreement wasn’t reached on that land the business park couldn’t have been created as a cohesive parcel and therefore couldn’t have been developed as it is. Additionally, some portions of land were privately owned for multiple generations.
“Without the county’s land partnership and coordinated efforts among private and public entities, including the city of Oak Creek and state of Wisconsin, we could easily still be at square one,” Faber said.
After the Amazon development, Ryan Business Park still has about 30 acres left for development, which Vickers said will be further subdivided for any prospective need of other developments.
A community park is also planned within the business park.