Communities across Southern New England are giving up millions in property taxes in order to land Amazon distribution centers that power the enormously profitable company.

New Englanders are notorious skinflints. 

Select board members and town councilors aren’t shy about demanding all sorts of expensive mitigation measures when faced with new projects, claiming a few new apartments will flood the schools with new students, or that a new fast-food joint will create gridlock on local streets. 

So why in the world are communities across Southern New England rolling over – and doling out juicy, multimillion-dollar tax breaks – when Amazon shows up in town? 

And no, we are not talking about new office parks filled with highly-paid Amazon executives, but rather huge warehouses and distribution centers with hundreds of delivery vehicles coming and going all hours of the day. 

The latest example of this puzzling phenomenon can be found in Johnston, where Amazon is pushing ahead with plans for nearly 4 million square foot, $290 million distribution center in the small Rhode Island town. 

Just how much of a tax break Amazon is getting is unclear, with local and state officials being somewhat cagey about the concessions they agreed to. 

Millions in Giveaways 

One local news report estimated Amazon stands to shave $10 million off its bill on its giant distribution hub over the next 20 years.  

But a close look at the math reveals that estimate to be preposterously low. That $10 million estimate is based on difference between the payments Amazon has agreed over the next two decades and what it would otherwise pay if Johnston’s commercial tax rate were literally frozen in time at its current levels through 2044. 

Fat chance of that happening. 

Given we live in a world where taxes routinely rise over time – and Johnston’s commercial tax rate is hardly any exception – Amazon is likely to save many millions more over the next two decades beyond the $10 million number that has been put out there by local officials.  

Now if this was just Johnston, maybe we could just chalk this extreme generosity on part of the town’s leading citizens towards one of the world’s most profitable corporations as an oddity or something in the water. 

But Johnston is just following in the footsteps of other suburbs and towns across the region. 

Just look at North Andover, where Amazon will pocket a $27 million tax break on the new, $400 million e-commerce distribution, warehouse and storage facility complex Texas developer Hillwood is building for the online retailer. 

And that’s in addition to the $14 million tax deal Fall River granted to Amazon a few years back, as well as a $3.5 million deal Stoughton gave to the online retail behemoth. Not to mention a three-year, $8.8 million tax deal Windsor, Connecticut, officials just last year granted to Amazon on a $230 million distribution center it was building in town. 

These deals are completely cockeyed. Amazon should be shelling out the big dollars in order to win approval for its distribution centers, not the other way around. 

Where’s Their Spine? 

Whether it’s in Johnston or in North Andover, local officials are failing to appreciate the strength of their negotiating position and their potential leverage. 

Amazon is racing to speed up delivery times, and, as a result, it is rolling out massive distribution and warehouse projects across the country near key transportation hubs and highway interchanges.  

The online retail giant needs sites in and around heavily populated urban area, locations that are not necessarily all that easy to find in already built-out areas. 

That is especially the case in persnickety New England, with its well-earned reputation for NIMBYism. 

Amazon can’t just go off and build these distribution-and-warehouse hubs anywhere – the online retailer really, truly needs to be in Johnston and North Andover and Windsor. 

Scott Van Voorhis

But instead of acting like they are in the driver’s seat, local officials are playing the role of the supplicant to a company that reported a net income of $5.2 billion in the second quarter, and, frankly, what for? 

The obvious draw for a large warehouse project would be the taxes it contributes to town coffers, but right off the bat local officials are giving away the shop, and millions in potential payments. 

Sure, these Amazon logistics hubs do bring lots of jobs. But while the pay is a step or two above what one could earn at Dunkin’ or McDonald’s, the pace of work at these Amazon distribution centers is brutally, notoriously relentless, with workers driven as if they were mindless automatons. 

And the endless streams of delivery vans and tractor-trailers that these facilities generate clog nearby roads and beat up the very pavement their host towns must pay to fix. 

At a time when local communities can use every dollar they can possibly bring in, giving away millions to Amazon makes little sense. 

Scott Van Voorhis is Banker & Tradesman’s columnist; opinions expressed are his own. He may be reached at sbvanvoorhis@hotmail.com.