Amazon.com is bringing 1,000 warehouse jobs to Sacramento, providing fresh momentum for the region’s economic recovery while furthering the e-commerce giant’s goal of grabbing an even bigger share of Californians’ spending.
After weeks of speculation, Amazon announced Friday that it will build an 855,000-square-foot customer fulfillment center at Metro Air Park, a long-awaited business development near Sacramento International Airport.
The facility, expected to open sometime next year, will be Amazon’s 10th major warehouse in California. All have opened in the past four years, the result of Amazon’s ongoing effort to dramatically shrink delivery times to one day or less.
“We want to make sure a fulfillment center is placed as close to the customer as possible,” said Amazon spokeswoman Ashley Robinson. “That’s the equation.”
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For the Sacramento area, it will mean a lot of jobs all at once for a region that has seen steady but unspectacular economic growth the past few years. Although unemployment has fallen to 4.7 percent, Sacramento’s job growth has generally lagged most other major metropolitan areas in California, according to data compiled by economist Jeff Michael of the University of the Pacific.
Michael said Amazon’s announcement is a definite boost. “There aren’t that many projects that generate those kinds of job numbers,” he said. “That’s a big deal.”
Area officials were thrilled at the news. While “it’s not a headquarters,” the center will help diversify a region that’s still heavily dependent on state workers, said Sacramento County Supervisor Phil Serna.
“Having a fulfillment center is part and parcel of (the goal of) increasing private sector investment,” said Serna, whose district includes the air park. Besides the 1,000 full-time jobs, Serna said he’s been told the facility will hire as many as 500 workers during peak retailing seasons.
Jobs at Amazon’s fulfillment centers in the San Joaquin Valley pay about $14 an hour, Michael said. Amazon said the Sacramento jobs will pay “competitive hourly wages and a comprehensive benefits package.”
Despite concerns that the U.S. economy is slowing down, Amazon’s announcement is the latest sign of continued momentum in the Sacramento area. A Dallas company called Topgolf announced in early July it will hire 450 part- and full-time workers for a new entertainment and golf center in Roseville. Sacramento and Tracy have emerged as finalists for an electric-car assembly plant proposed by Atieva USA, a Silicon Valley startup backed by a Chinese tech billionaire.
Amazon’s announcement has the added allure of jump-starting Metro Air Park, which has sat idle for years. The 1,800-acre development was sidelined by the recession and a longstanding building moratorium in the Natomas basin because of flooding concerns raised by FEMA officials. The moratorium ended last year.
“It’s just great news to finally have a project coming out of the ground,” said Roberta MacGlashan, chairwoman of the Sacramento County Board of Supervisors. “It’s been a long time.”
Dean Sioukas, whose family is one of the master developers of Metro Air Park, called the Amazon deal “a huge jump-start” for the property that follows years of work to land a significant tenant. “We were priming the pump so when the flood moratorium was lifted, we’d be ready,” Sioukas said.
The Amazon facility will sit on a 68-acre parcel that’s been purchased by Arizona developer Seefried Industrial Properties and USAA Real Estate Co., an affiliate of the USAA insurance conglomerate.
Amazon’s expansion to Sacramento is an outgrowth from a compromise over tax issues and the company’s strategic decision to speed its deliveries.
Amazon and California officials nearly went to war four years ago over a new state law requiring the online giant to begin collecting sales tax from California customers. That would have partially erased the company’s price advantages over brick-and-mortar competitors. Amazon argued that only retailers with a physical presence in the state could be required to collect sales tax.
As Amazon began collecting signatures for a ballot referendum to overturn the law, a deal was struck: the law was delayed by a year, and Amazon pledged to create thousands of California jobs by building fulfillment centers across the state.
The fulfillment centers, opened by the dozens around the country, have helped Amazon deliver on its strategic goal to dramatically reduce delivery times in major metro areas. Earlier this year, Amazon brought its Prime Free service to Sacramento, which offers free same-day delivery of its most popular items for Prime customers who place orders of at least $35.
Amazon’s expanding footprint has been watched with some alarm by brick-and-mortar retailers. “Over the last 15 years, the biggest issue in retail has been the growth of the internet,” said Bill Dombrowski, president and CEO of the California Retailers Association. “That’s where the customer is moving.”
Amazon’s new warehouse is an example of where retail is heading. Last fall, Macy’s opened an e-commerce warehouse at the old Campbell Soup factory in south Sacramento, just a few months before announcing the shutdown of its store at Country Club Plaza.
Amazon “is definitely putting pressure on the shopping malls,” said UOP’s Michael. “This is the investments we’re seeing, a big Amazon fulfillment center instead of a shopping center. In the new economy, this is what we’re getting instead of retail jobs.”
Almost all of the Amazon warehouses in California have been built in smaller cities. But Robinson said Amazon has been impressed with the Sacramento workforce ever since it opened a small “distribution hub” last fall on Ramona Avenue, south of California State University, Sacramento, and east of the Tahoe Park neighborhood. The hub serves Amazon’s Prime Now service, which delivers products in as little as an hour.
“We have found great talent in abundance in the region,” she said.
Job seekers can go to www.amazondelivers.jobs.