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Fingers crossed: Pending Amazon.com mega-deal could mean up to 4,000 distribution jobs, $125 million-plus investment

by Terry Boyd

Bullitt County officials are holding their collective breath as a huge distribution center project comes together – perhaps the biggest economic-development deal of the last decade.

Multiple sources have confirmed to Insider Louisville that Amazon.com, the Seattle-based Internet retail giant, is considering at least three sites near Shepherdsville, which is about 15 miles south of the UPS World Port Air Cargo Hub.

Those sources say Amazon, or its subsidiary Zappos, is trying to acquire 150 acres for multiple fulfillment operations that could create as many as 4,000 jobs over the next five years.

The first project planned would be a 1 million-square-foot distribution center, with another similar-size building to be built later.

Unlike the Ford Motor Co. renovation of the Louisville Assembly Plant, which will add 1,800 positions through transfers, internal employee referrals and bringing back laid-off workers, Amazon would be creating new positions.

Amazon pay across the nation varies, but most media reports and on-line wage tracking sites list a wage range of about $11 per hour for warehouse workers to more than $40 per hour for software engineers.

South Carolina’s loss may Bullitt County’s gain.

The Kentucky deal comes at a time when South Carolina state officials and Amazon executives are in on-again, off-again negotiations, though it now appears likely a similar project, valued at $125 million, could go to the state, according to the Nexus Negotiator website, which tracks state tax incentives deals.

No Bullitt County officials will go on the record because negotiations are on-going.

A spokeswoman for Bullitt County Judge Executive Melanie Roberts told Insider Louisville that the county attorney has instructed local officials not to discuss the deal publicly.

Bob Fouts, executive director of the Bullitt County Economic Development Authority, also declined to discuss the project.

Officials at the Kentucky’s Cabinet for Economic Development say neither Amazonn nor Zappos has applied for tax credits. But, Zappos still can claim tax incentives from an earlier investment, they said.

In 2004, Zappos officials announced a 786,000 square foot distribution center across the street from the original 280,000 square-foot fulfillment center, a $40 million investment. Zappos received $6.8 million in state tax incentives.

The Sheperdsville operations, which are about 12 miles south of the UPS World Freight Hub at Louisville International Airport, are Zappos only distribution facilities.

Now, insiders with direct knowledge of Amazon’s plans told Insider Louisville that company is trying to acquire property through Charlotte, N.C.-based Red Rock Developments. Red Rock executives did not respond to calls for comment.

Sources say Amazon, which currently is adding to its multiple distribution centers across the United States, initially would build a 1 million-square-foot distribution space, which would employ about 1,000 people.

Amazon acquired Zappos, based in Las Vegas, in July 2009.

The nine-year-old Zappos distribution center and outlet operation in Shepherdsville currently employs at least 750 people, and sources tell Insider Louisville the operation is at capacity. Just how much space the company currently has in Bullitt County is unclear. Real estate sources say Zappos leased an additional 250,000 square feet of space last year.

Another unknown is the impact on-going negotiations in South Carolina are having on the Shepherdsville-area search.

Though the deal appears on again, South Caroline, incoming state lawmakers had taken issue with the Amazon’s demands for tax exemptions agreed to by a previous legislature.

Now, in return for a five-year exemption, Amazon executives are contemplating a $125-million distribution center in the state, a facility that would create 2,000 jobs. according to Nexus Negotiator (subscription).

In the states where it has distribution centers, those centers operate independently from the company and do not include walk-in retail sales. So, Amazon officials take the position the distribution centers should be exempt from state sales taxes – not likely to be a deal breaker in Kentucky.

The project came to light earlier this month during a Bullitt County zoning meeting after Louisville-based commercial real estate executives submitted Red Stone’s plans for a site near KY 245 and Interstate-65.

Red Stone executives are trying to assemble a number of parcels at the site, which is just west of Clermont, Kentucky, and about 12 miles south of the UPS freight hub.

If Red Stone can’t acquire property there, two other sites are under consideration, sources tell Insider Louisville:

  • Cedar Grove Industrial Park in Shepherdsville.
  • property owned by James Hamilton just south of Sheperdsville close to the existing Zappos facility.

A site in Jeffersonville, Ind., is now out of contention, insiders says.

Amazon, which employes about 40,000 people around the world, has distribution operations in eight states including Arizona, Indiana and  Pennsylvania, according to the company’s website.

Amazon has only one other Kentucky operation, a fulfillment center in Campbellsville, which is in south-central Kentucky.

More as we know more.


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