What does Amazon’s job boom in E. Oregon mean for Tri-Cities? Here’s what we know
While the Tri-Cities waits for Amazon to open its two idle fulfillment centers in Pasco, Eastern Oregon is bracing for construction of new data centers worth billions.
Amazon Web Services, the web hosting subsidiary of the Seattle e-commerce giant, secured property tax breaks the Oregonian newspaper reports are worth $1 billion to add five data centers in Boardman, about 50 miles southwest of Kennewick.
Amazon already operates about a half dozen centers in Morrow County and neighboring Umatilla County, making Eastern Oregon the company’s largest data center cluster after northern Virginia.
The Morrow County Commission recently approved a 15-year property tax exemption it hopes will leverage a $12 billion investment in more data centers. The Port of Morrow and city of Boardman also approved the agreement.
The existing data centers already employ nearly 940 regular, full-time employees and are responsible for creating or retaining more than 4,700 jobs in the region.
Crossing state lines
The Oregon data centers and the idle Pasco fulfillment centers are unrelated beyond sharing a common parent. But taken together, they speak to a massive investment with job and economic benefits flowing to both Washington and Oregon.
Amazon Web Services data center-related jobs draw workers from both sides of the state line, including the Tri-Cities, as do its construction projects.
In 2021, overall 3,500 Tri-Citians or 2.6% of residents with jobs worked in a state other than Washington, according to the the U.S. Census Bureau annual community survey.
Tri-Cities economic development officials have not made a concerted effort to woo data centers, chiefly because it can’t provide the power needed to run them.
In Oregon, Amazon buys renewable power from sources around the world. Its local provider is the Umatilla Electric Cooperative.
But it’s clear the job benefits spill into Washington.
“The Tri-Cities benefit from the data centers,” said Randy Hayden, executive director of the Port of Pasco. The port has considered data centers because of their massive impact on property tax rolls, even with the exemptions they receive. But the area can’t supply power, he said.
Karl Dye, president and CEO of the Tri-City Development Council, agreed that the area can’t deliver the low-cost power required, so data centers aren’t a priority. But many those workers choose to live in Washington.
“As far as we know, we get more of the commuters,” he said.
E. Oregon data centers
Citing security issues, Amazon is deliberately vague about its existing footprint in Eastern Oregon and declined to identify how many centers it operates or to confirm if the widely-reported impact numbers are accurate.
The agreement identifies agricultural property in Boardman, southwest of the intersection of Wilson Lane S.E. and Bombing Range Road, as the site of future development.
Data centers are unlabeled in satellite images on Google Maps, but they are easily recognizable and dot both Umatilla and Morrow counties.
Amazon is less circumspect about the impact of its operations.
A spokesman shared a company-produced report noting it has invested $15.6 billion in data centers in Eastern Oregon since 2011.
It also said it paid $41 million in property taxes in 2021 — $26 million in Morrow County and $15 million in Umatilla. Amazon Web services is largest taxpayer in both counties.
Its tax bill was the equivalent to the next three largest taxpayers combined, according to a Port of Morrow economic impact report.
The report showed the impact of past tax breaks by noting the difference between the market and taxable value of the company’s properties.
Amazon Web Services Morrow County properties had a market value of about $3.5 billion and paid taxes on a valuation of $662 million in 2021.
Pasco on hold, for now
The Tri-Cities will benefit more directly when the fulfillment centers open.
The two buildings, each more than 1 million square feet, are off Highway 12 near Sacajawea State Park and together will employ an estimated 1,500.
An Amazon official confirmed to the Tri-City Herald that it remains committed to Pasco.
“While we don’t have a specific launch date to share right now, once we have a better sense of timing, we’ll work with the local community and employment organizations in the area to hire hundreds of employees at each facility,” the company said in a statement attributed to a spokesman.
Both centers were expected to open last year, but the company paused its distribution network growth after a period of expansion and slowing growth.
In February, it posted a staffing job for Pasco, which seemed to signal activity. There were no Pasco jobs posted to amazon.jobs this week.
When they open, the eastern warehouse, 1361 S. Road 40 East, will handle household items such as books, toys and technology and the western warehouse, 1202 S. Road 40 East, will handle larger items such as furniture, large packages and pet supplies.
In planning documents, the projects built for Amazon by the Ryan Companies of Bellevue continue to be listed by their aliases: Project Oyster and Project Pearl.
Web services
The Amazon Web Services tax breaks take advantage of Oregon’s Strategic Investment Program or SIP, designed to encourage manufacturing. It rewards job-creating investments with breaks on some but not all property taxes.
Amazon Web Services said its median compensation in Morrow County was $74,000. That’s about $17,000 more than the county median in 2021.
In Umatilla, the Amazon median was $82,000, or about $24,000 more than the county median, it said.
According to the agreement approved by Morrow County, Amazon will be exempt from most but not all property taxes.
In exchange, the company also will pay an annual $2.5 million community service fee and an $850,000 contribution.
It is also obligated to pay $5 million to assist with the costs of capital improvements and to cover the costs associated with the agreement.
City and port officials in Boardman could not be reached about the Amazon projects. The agreement includes a confidentiality clause that requires government officials to “exercise the utmost discretion” in sharing information about Amazon Web Services.
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