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Amazon plans new ‘fulfillment center’ in Livonia

Jonathan Oosting
DetroitNews-Unknown

Lansing — Internet retail giant Amazon.com plans to open a new regional “fulfillment center” in Livonia after winning approval for up to $7.5 million in performance grants from the state.

The Michigan Strategic Fund Board on Tuesday approved Amazon’s grant request for the previously unannounced project, which is expected to create at least 1,000 full-time jobs through 2020.

Amazon plans to invest nearly $90 million in the product distribution hub, including construction, machinery, equipment and other improvements on the Livonia property at 13000 Eckles Road.

Michigan was competing with Ohio and Indiana to land the regional fulfillment center, a largely automated facility where workers will help ensure Amazon customers receive their online orders in a timely fashion.

Livonia was the company’s “preferred site,” said Holly Sullivan, an Amazon senior economic development manager. The former General Motors property, put into a trust when the automaker went through bankruptcy, is near the intersection of Interstates 96 and 275, roughly 20 miles from Detroit Metro Airport.

“When we’re going through site selection decision, transportation is key to our success,” Sullivan said. “We have a lot of trucks and we have a lot of partners that also have a lot of trucks.”

The incentives approved Tuesday are designed to help the Seattle-based company attract and recruit workers despite Michigan’s relatively low unemployment rate.

“Our labor studies came out very good, but it is very competitive,” Sullivan said, “so we want to make sure we’re offering a place associates can be proud to work in.”

The final agreement is contingent on Livonia approving local property tax abatements for the Amazon distribution center, which will happen in short order, according to Mayor Dennis Wright.

“We’ve got that package ready, and we’re just polishing it up now,” Wright told The News. “They’re going to get it good. We’re going to take very good care of them.”

Wright spoke in favor of the state grant during a board meeting at the Michigan Economic Development Corporation headquarters in Lansing, saying the city is “very excited” and “can’t wait to get going” on the project.

DTE Energy is also helping update power delivery to the site, and Wayne County is planning various road improvements to help seal the deal, according to Wayne County Executive Warren Evans, who praised the “collaborative effort” to land the new facility.

Amazon could qualify for up to $7.5 million in state funding through 2020 if it meets certain job requirements, including an initial round of $2.6 million if it has created at least 350 qualified jobs by the end of 2018.

The company will likely employ closer to 1,500 workers during peak season, according to MEDC CEO Steve Arwood, who began Tuesday’s board discussion by joking about the ubiquity of Amazon deliveries during the holiday gift-giving period.

“This is one where you look at it and say the quality of the employer, from everything we’ve heard, is just spectacular,” Arwood told reporters after the approval.

Amazon currently employs 277 workers in Michigan. It has office space in Detroit, operates a “sort” center in Brownstown Township and owns Brilliance Audio, an audio book publisher in Grand Haven.

The company began exploring the Livonia site anonymously through consultants, Arwood said. He did not know Amazon was involved until about two months ago.

“This company moves fast,” he said.

Amazon fulfillment centers are “highly automated,” Sullivan told board members. The Livonia facility is likely to house medium- and large-size items, such as computers or televisions that “fulfillment associates can actually move within the system.”

Pitching the project to the Strategic Fund board, Sullivan touted the company’s “competitive” wages and said employees will qualify for full health benefits on Day One.

While many of the new jobs may be entry-level positions, state officials praised Amazon’s career development offerings. The company actively encourages and helps workers go into other in-demand careers, and will work with the state to identify areas of need, said MEDC spokeswoman Emily Guerrant.

“We don’t feel like they’re going to be in entry-level positions for 10 years,” she said. “Especially seasonal workers, they’ll work there for the holidays, and if they can get in a job training program that helps them become a dental hygienist, then that’s a win-win.”

The Amazon center was among more than a dozen projects that won state incentives Tuesday.

Officials also authorized over $30 million in tax captures to help Ford Motor Co. redevelop three city blocks in downtown Dearborn and roughly $4 million in tax captures to help build the Mondrian at Midtown, a new five-story mixed-use building on a brownfield site in Detroit.

joosting@detroitnews.com