The City Of San Marcos Pays Amazon To Move In?

Chauntel Seminerio

Managing Editor

10/29/2015

 

Actually our lucky seven city council members reached a mutual agreement with the electronics products and Internet retail sales company in July to build an 855,000 square foot fulfillment center after the company thoroughly reviewed their options nationwide and chose San Marcos.

Misleading the public, city council member wannabe Melissa Derrick (current candidate place 6) attempted to forward her campaign through out of context remarks against five year veteran city council member Shane Scott. Council member Shane Scott who voted for the Amazon deal openly expressed his enthusiasm for growth in San Marcos saying, “I’m all about growth; we need it.”

 

Derrick referred to the City as a “corporate funding agent” and suggested wasteful spending as municipalities assume the role of a “bank,” like children playing a game of Monopoly following Scotts’ pro-growth comments.

 

Local real estate agent Scott Gregson, running for city council place 5, chimed in on the Amazon deal, crying about costs to the City related to expansion needs for utilities, public servants such as additional fire and police resources – all in the best interests of his candidacy.

 

Gregson, apprehensive on his position regarding growth in San Marcos, separates people and prosperity into separate categories with clear lack of enthusiasm to the addition of more people joining our beautiful city.

 

So how do businesses with their hearts set on the City of San Marcos actually get to move in?

 

Like everything in life there is a process and here’s the step-by-step breakdown for our City:

 

New businesses, like Amazon, initiate the relocation process through the Greater San Marcos Partnership. They review, with the GSMP, which incentive packages they’re seeking and fill out a Business Information Form application for incentive consideration. This information gives the project’s overall scope.

 

The application, in its infancy, is reviewed by GSMP who checks businesses’ plans for credibility, accuracy and qualification for incentives.

Incentives, such as annual rebates, are performance-based. GSMP uses a scoring matrix passed by the City Council to score applicants on whether or not they will be good corporate citizens, infrastructure demand of their project, total investment, number of jobs, stability and more. If a company does not meet the performance standards to receive their rebates, the City will NOT grant their incentives. From this matrix, scoring business applicants are assigned points dictating what makes sense from an incentive standpoint.

 

Once GSMP has determined an incoming business qualifies for incentives and can meet job creation expectations and other stipulations on a points scale, the application and score then goes to Economic Development San Marcos (EDSM).

 

EDSM is the governing body responsible for all incentive application reviews and recommendations for the City of San Marcos. The 12-member EDSM Board reviews applications on a quarterly basis and as needed. Recommendations for incentive awards are presented to the San Marcos City Council for approval upon the EDSM Board voting to bring the project to Council. Council has the final say on all incentive applications.

 

So what does this mean for you and the city?

 

Prior to Amazon occupying the 101 acres of agriculturally zoned blank space of land behind the Embassy Suites, the City only accrued approximately $100 a year in property taxes. Now, with Amazon as our new neighbor, the City will receive approximately $101 thousand in property taxes in the first year alone. (That’s if you only calculate Amazons proposed investment of $191 million.) This new source of revenue will deposit into the City’s coffers for a rainy day when we need our emergency services, such as in the time of the Memorial day floods, or the extra firemen, police officers and other public services we all depend on.

 

You know when you go to a cell phone provider such as Sprint or AT&T and they offer you a $200 rebate on that $700 phone you just bought, but there is a complicated process to get it? You have to submit a form with the serial numbers off of the back of your phone, attach the original receipt, have it post marked by a certain day etc. Amazon is not exempt from having to jump through hoops to get their rebates from the City either. Here are the details of the rebates:

 

Amazon has agreed to make a capital investment of approximately $60 million in land and building improvements, and approximately $131 million in personal property, furniture, fixtures, equipment and inventory at the project site in San Marcos. That means they will build from the ground up and retro-fit the piece of land they have picked out on McCarty. They will invest $131 million in their own computers, desks, chairs, equipment and so forth.

 

In return, Amazon can file once a year for a rebate on their investment of the distribution center, receiving 85% back on taxes paid from their own personal property and 40% back on taxes paid from the actual property itself; once a year for ten years.

In order to collect their refunds stipulated in their contract with the city Amazon must commence construction of their site on or before December 31, 2015 and to be completed on or before December 31, 2016. Amazon shall begin operation of the business in San Marcos on or before January 1, 2017 and shall continuously operate, maintain and manage the business for the duration of the term.

 

How long is their term? This agreement has an end date of December 31, 2036! Amazon must employ a minimum of 350 permanent, full time positions for the term of the agreement and submit an annual “compliance certificate” to verify job creation.

 

This job stipulation means Amazon can’t outsource full time jobs as work from home internet based positions to anyone, they must be local resident employees that actually get up and go to work. The only way Amazon can extend their annual rebate incentive perk is if they create and maintain a minimum of 1,000 permanent, full time positions for five of the first ten years of the term and maintains those jobs for the additional five years.So mark your calendars and apply if you’re looking for a new career!

 

So how will this affect you? As we already know, San Marcos is expanding exponentially as we are smack dab in the middle of the I-35 corridor offering a sittin’ pretty spot for corporations like Amazon to traffic business between San Antonio and Austin.

 

More business means more opportunity for more business. With a fulfillment plant and potentially 1,000 employees making a higher income than they were before, our cafes, restaurants, school, homes, and property values will increase in sales and value. It’s the simple rule of supply and demand. More people moving in means, build more houses and property values increase. Currently, the cities daytime service population is 66,116, according to the U.S. Census Bureau, only destined to increase. More people working locally means more sales for small businesses and greater opportunity for new ones.