Amazon.com signs lease on 3rd Tennessee distribution site

Amazon.com signs lease on 3rd Tennessee distribution site

August 2nd, 2011 by Mike Pare in Business Around the Region

Leacroft Green places a package to the correct shipping area at an Amazon.com fulfillment center, in Goodyear, Ariz.

Photo by Associated Press/Times Free Press.

BY THE NUMBERS

  • 3 - Number of distribution centers Amazon wants to open in Tennessee this fall.

  • 2.5 million - Square feet which Amazon is building or leasing in Tennessee for its centers.

  • 3,900 - Approximate number of jobs Amazon is creating in the state.

Amazon signed a short-term lease for an existing warehouse outside Nashville for its latest planned distribution center, unlike in Southeast Tennessee where it's building two million-square-foot facilities.

G.C. Hixson, who heads the Joint Economic and Community Development Board in Wilson County, said the lease is for two to three years.

"We'll work to expand their timeline," Hixson said Monday.

Hixson said he believes Amazon plans to hire between 400 and 500 workers at the Wilson County site, where the company is leasing about 480,000 to 500,000 square feet.

Michele Glisson, Amazon's senior manager for corporate communications, said in an email the giant Internet retailer is hiring for "hundreds of full-time jobs at the new facility and expect to hire for hundreds of additional seasonal jobs" during the upcoming holidays.

"We also continue to hire for our facilities in Chattanooga and Cleveland," she said.

Dave Clark, Amazon's vice president of its North American operations, said it looks forward to opening all three new facilities in the Volunteer State by this fall.

"We're delighted to be expanding our investment in Tennessee," he said.

However, state Sen. Randy McNally, R-Oak Ridge, said one of the problems he has with the Amazon deals is that the public still doesn't know what type of financial arrangement the company has with the state related to the thorny issue of whether the company will collect sales taxes or not on the merchandise it sells.

"I assume they have a revenue letter or revenue variance from the previous commissioner of revenue," he said. "No one knows exactly what it is."

Amazon currently does not collect sales taxes on what it sells in Tennessee, but the company may be required to collect such taxes if it is deemed that its facilities in Tennessee are a "retail nexus."

The nation's No. 1 Internet retailer is spending $139 million to build distribution centers in Hamilton and Bradley counties. It plans to create more than 1,400 full-time jobs and more than 2,000 seasonal slots at those sites.

In June, state Attorney General Bob Cooper issued a legal opinion saying that proposed legislation offered by McNally and state Rep. Charles Sargent, R-Franklin, that could force Amazon to collect taxes on Tennessee sales is constitutional.

Randy McNally

two year plan?

Sargent said last month he could go along with a two- or three-year postponement of tax collections and he'll talk to Gov. Bill Haslam and House Speaker Beth Harwell, R-Davidson, as well as other leaders.

"I think that's a workable compromise as far as that's concerned," Sargent said. "It does fit Amazon's business model since they're doing it in five or six states already."

McNally said the bill wouldn't have to be introduced again when the legislature meets in January because it was deferred pending the attorney general's opinion.

"I'm hopeful Gov. Haslam is negotiating with them, and it could be they end up negotiating a limited exemption from collecting the sales tax," the state senator said.

Laura Elkins, a spokeswoman for the state Department of Economic and Community Development, in an email called the latest Amazon announcement "great news."

She declined to discuss if any other Amazon centers in the state are under discussion, but Amazon officials previously indicated they were discussing the potential of building three more distribution centers in Tennessee.

"Tennessee has one of the best environments in the nation for business, and we are confident Amazon realizes that as have numerous other companies that have chosen to locate here," Elkins said.

Hixson said some of the build out of the Amazon space was underway Monday.

"They want to be up pretty quick," he said, adding that an employee screening and training process is underway as well.

Contact Mike Pare at mpare@timesfreepress.com or 423-757-6318.