Almost every indicator points to an Amazon fulfillment center, or something like it, at an old Ohio mall near Akron.
Buying up old malls in Northeast Ohio has become the Seattle-based company’s modus operandi with operations coming online this fall in North Randall and early next year in Euclid. The old mall, Rolling Acres, fits the mold for Amazon’s takeover of failed retail centers.
One person involved in the secretive deal said Amazon is looking at Summit County again after receiving a $270,000 tax credit in 2016 from JobsOhio to convert the old Twinsburg Chrysler plant into a sorting center.
“It sounds exciting,” said the business person involved. “It sounds like Amazon is coming in there. They’re going to bulldoze everything and it’s going to be beautiful.”
But Amazon won’t acknowledge the project in southwest Akron.
And everyone close to the deal, even property owners who aren’t selling, have been sworn to secrecy. Fulfillment jobs — which involve the heavily automated storing and shipping of customers’ items — don’t pay as much as the average $60,000 salary (based on the minimum number of expected jobs and projected annual payroll) the mayor’s office expects at the mysterious 600,000-square-foot facility.
According to a tentative contract endorsed by Akron’s elected leaders, the deal involves the sale of 38.5 acres of private property and 66.6 acres of public land owned by the city of Akron.
Akron Romig Road, the developer, has tentatively agreed to pay the city $600,000 for its portion, all of which the developer could get back in tax breaks.
The private properties include the Local 24 Teamsters union hall, the old Macy’s and Dillard’s stores, and two vacant lots abutting the parking lot of the old mall, which the city demolished last year for $450,000.
Akron Romig Road was formed recently in Delaware.
Company attorneys filed paperwork in Columbus July 17 to do business in Ohio. City council on July 16 authorized the mayor to do work with the company, which had been negotiating in private with Akron’s economic development team.
The sale of the public land was not publicly bid. And the deal has moved quickly and quietly in the month since Mayor Dan Horrigan announced new tax breaks on the dilapidated Rolling Acres property.
Anyone who breaks ground on what is now zoned for just about any use can apply for what amounts to a 30-year tax rebate. Anything extra builders pay to the city in property taxes as they improve the land can be returned directly to them.
Horrigan got city council to sign off on the tentative deal the same day it was introduced this week. To get the tax break, the developer must move in a tenant within three years of completing this $100 million project, or no later than December 2023. And the tenant must generate $30 million in annual payroll for at least 10 years.
The developer reserves the right to walk away up to 180 days after signing. The city agreed to a confidentiality clause in the tentative contract.
Silence is pretty standard.
“Amazon has a practice of not commenting on speculation or rumors,” said Rachael Light, a regional spokeswoman for Amazon Operations.
“We don’t share whether or not we’re in project discussions with companies,” said Matt Englehart, spokesman for JobsOhio, which has provided cash and other incentives for Amazon’s data centers, shipping yards and sorting facilities.
And Amazon isn’t the only e-commerce operation that might fit the profile of the Rolling Acres project.
Jim Young/Bloomberg News
How much private property owners are asking also is a mystery.
Hal LaPine, who invested in two empty lots to the west along Harlem Road, said he’s selling for less than the $700,000 he was asking for just two years ago — for land appraised at $64,000.
Under contract to sell to the developer, he could say no more without losing his seat at the table.
The shroud of secrecy that’s fallen over the project eclipses even businesses not involved in the deal.
William Bennett said he’s in the dark about any big plans to develop the eight parcels that engulf the old Target where he manages nearly 600 storage units at Storage of America.
“Nothing has been said to me. And as far as I know, the [old Target] building has not been sold at this point,” Bennett said, adding that he may not be privy to all information. The business’s owner, Rob Walker of Utah, could not be reached by phone.
“And we really can’t say a whole lot, we’re under a non-disclosure agreement with the developer,” said Dan O’Connor, who bought the former Sears in 2012 and has no intentions of selling it now.
Two years after founding Pinnacle Recycling, O’Connor moved the operation from Barberton to Rolling Acres. The company salvages and resells raw materials from other commercial businesses. “Business has been very good. We’ve grown and done very well,” said O’Connor.
O’Connor was only approached by the developer. His land is not among the eight properties in the deal.
Pay doesn’t match
If it’s an Amazon fulfillment center, the employment figures the mayor’s staff used this week to sell city council on the deal don’t add up.
Amazon’s new centers at North Randall Park and Euclid Square Mall facilities fit the specs of the Rolling Acres development.
But the salaries are off.
“In the U.S., the average hourly wage for a full-time associate in our fulfillment centers, including cash, stock and incentive bonuses, is over $15/hour before overtime,” said Light, the Amazon spokeswoman.
That’s around $30,000 annually, plus medical, dental, vision, and a tuition benefits package.
James Hardy, Horrigan’s chief of staff and a negotiator for economic development, pitched the Rolling Acres deal to city council on July 16. He “conservatively” estimated that $30 million in annual payroll would support “at least” 500 jobs. That’s $60,000 apiece, double the $30,000 that fulfillment center jobs pay. The city would not explain how it reached the 500-jobs figure, though Hardy stressed, “with my integrity on the line,” that the work would pay a living wage with benefits.
Hard to pass up
Councilman Zack Milkovich voted against the deal, citing concerns about not knowing the developer. The rest of the council was hooked without knowing who the city is selling to or what kind of work the mayor is bringing to southwest Akron. “Some might say it’s shortsighted, but when I saw those numbers on payroll and investment …,” said Councilman Mike Freeman, who strongly endorses the plan.
“It comes down to a level of trust with the administration. I’ve been harping on Rolling Acres for years saying, what are we going to do, what are we going to do,” said Freeman. Until he moved a week ago, Freeman spent three decades watching from his back windows as the lights went out at the old mall.
“I was just given numbers. They said Mike, it’s your ward, here’s what’s going to happen,” Freeman. 61, said of the 500 jobs, $30 million in payroll and $100 million investment. “I’ve never seen anything this big. I’m dumbfounded … in a good way.”