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June 16, 2020 Deal Watch Today

Windsor greenlights $8.8M in tax benefits for Amazon's planned $230M distribution hub; construction to begin in July

Photo | Contributed An Amazon employee in the company's existing Windsor fulfillment center at 200 Old Iron Ore Road. The company plans to open a second distribution facility in Windsor on Kennedy Road by year-end 2021.
By Joe Cooper

Construction on Amazon’s proposed $230 million fulfillment center in Windsor is expected to start in July after town officials on Monday approved a three-year tax abatement for the e-commerce giant.

Windsor’s town council in a virtual meeting Monday approved a reduced three-year, 50% abatement of real property taxes and a 50% reduction in building permit fees for the company as it plans to occupy a new 823,000-square-foot distribution hub on former tobacco farmland at 1201 Kennedy Road and 1 Joseph Lane.

The development is slated to include $200 million for building and site features and $30 million for equipment and robotics. Amazon expects to add 1,000 new full-time jobs there within the first few years of operation.

Under the deal, Amazon is projected to save a total of $8.78 million, including $7.48 million in property tax savings and $1.3 million from the permit fee reduction. Meanwhile, the town will receive an estimated $10.52 million from the development during the three-year period, and revenues will jump to $5.4 million annually when the abatement expires at the end of fiscal year 2025.

With the abatement in hand, Jim Burke, the town’s economic development director, on Tuesday told HBJ the company now plans to begin construction on the distribution center in July for completion in Sept. 2021.

Amazon and Scannell Properties, the Indiana developer building what will become Amazon’s second warehouse/distribution center in Windsor, did not respond to requests for comment Tuesday.

Monday’s approved deal is much more modest than the seven-year, 100% tax abatement that Amazon was originally seeking. That deal would have saved the company an estimated $4 million to $5 million annually upon completion of the project. 

Although the abatement was allowed under the town's abatement policy, officials say the council does not typically approve abatements of that size both in terms of duration and total benefit. For example, recently approved projects in town have garnered three- or four-year abatements of 50% or less, town records show.

That's why Amazon and the town came to terms in recent weeks on alternative terms for the project.

Photo | Contributed
Scannell Properties is building Amazon's massive distribution center on former tobacco farmland in Windsor, 1201 Kennedy Road.

As first reported by HBJ in May, Scannell is set to build the massive fulfillment center on 147 acres owned by the Thrall family farm (O.J. Thrall Inc.).

The five-story e-commerce storage and distribution facility will feature 63 loading docks, 1,800 car parking spaces, 16 motorcycle spaces and 206 trailer parking stalls. 

The building, which will be smaller than Amazon’s fulfillment center on Old Iron Ore Road, will allow storage for Amazon’s products that would be distributed to many locations across North America.

Windsor residents will have the first opportunity to apply for any of the 1,000 jobs at the facility, town records show. 

The development of Amazon’s second Windsor distribution facility comes as the company recently said it hired about 1,600 workers in Connecticut as demand for its products surged amid the COVID-19 pandemic. 

Amazon, which also operates a 855,000-square-foot fulfillment center at a former Pratt & Whitney engine plant in North Haven, and is currently leasing warehouse space in Newington, is also planning to occupy a vacant Danbury warehouse where it plans to hire up to 400 employees.

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