Johnston approves Amazon tax deal, moving $290M project forward

Updated at 12:51 p.m. on Sept. 16, 2021.

JOHNSTON – Construction is expected to begin in October on a new $290 million, 3.8-million-square-foot distribution facility for Amazon.com Services LLC in Johnston, according to the Mayor Joseph M. Polisena.

The Johnston Town Council approved an agreement on Wednesday night that limits the amount of taxes the online retail giant would have to pay over the next 20 years.

In addition to the tax stabilization agreement, the town council approved a separate community partnership agreement, which would provide funds from Amazon for traffic improvements, transportation aid, employment training opportunities, and public safety, including $1 million for post construction traffic mitigation and $5.4 million over the course of 10 years toward the cost of public safety operations.

The meeting was attended by Gov. Daniel J. McKee, who spoke out in favor of the project, which Amazon said would create 1,500 new permanent jobs, along with 1,500 construction jobs.

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“This is something that’s going to add momentum to the state’s economy,” said McKee, speaking to a group of reporters after the meeting.

The facility would be located at 2120 Hartford Ave., on 195 acres of private land off Route 6 close to Interstate 195.

The tax agreement states that the Amazon facility would provide an average of $7.2 million in annual tax revenue to Johnston over the course of 20 years. According to the tax stabilization agreement, Amazon would be locked into a schedule of annual payments, starting at $5.7 million for the first annual tax payment and ending at $9.1 million 20 years later, for a total of $145.6 million throughout the course of the deal.

Polisena said that’s much better than the $60,000 in annual tax revenue the town currently generates from the undeveloped land and he said without the tax stabilization agreement, Amazon would simply go to another community that would provide such a deal.

“I’m sure if we said you have to pay full boat, they probably would not come,” said Polisena, reached on Thursday morning. “They’d go somewhere else. It’s very competitive.”

Polisena said he’s been working behind the scenes for about a year to lure Amazon to Johnston. For months, the project was referred to cryptically as “Project Schooner” by the mayor and others, as the e-commerce giant was represented by New York-based industrial real estate development company Bluewater Property Group LLC, including a lawyer named Don Chase who referred to the then-mystery company as “my confidential client.”

Amazon is looking to complete the project by April 2023, Polisena said.

The payroll for the site will be $57 million, with more than 100 jobs at over $60,000 per year, and $18 per hour for most starting hourly workers.

Overall, Amazon will be providing the town with $164.6 million over the course of 20 years, between the tax stabilization agreement and the community partnership agreement.

“I think the town did very well,” Polisena said. “The state did very well and Amazon did, too. This gives the town financial stability for the next 20 years.”

Update: Adds paragraphs 9-14 with additional information and comments from Mayor Joseph M. Polisena.

Marc Larocque is a PBN staff writer. Contact him at Larocque@PBN.com.