SALT LAKE CITY — Gov. Gary Herbert joined the board of the Governor’s Office of Economic Development on Thursday to announce that Amazon will be investing $200 million in a new regional fulfillment facility in Utah, likely to be located in Salt Lake City’s northwest quadrant.
Herbert called the megalithic, Seattle-based company’s decision “huge” for the state.
“To have a company like Amazon, as big as they are, choose Utah for a fulfillment center is a great win for us,” the governor said. “It’s a big shot in the arm for Salt Lake City, Salt Lake County and the state.”
Amazon executive Teresa Lynch said the new, 800,000-square-foot facility will play a major role in the company’s distribution system.
“This is one of our flagship regional facilities and will employ hundreds and hundreds of people in the community,” Lynch said. “This is our first real announcement to enter the state of Utah … and we can’t wait to be a part of the community.”
Herbert said Utah was up against six other states for hosting the facility, and he acknowledged that the participation of Salt Lake City Mayor Jackie Biskupski, who traveled with the governor on a recruiting trip to Amazon’s headquarters in Seattle, was critical in the effort to close the deal.
“I appreciate Salt Lake City and the state working together to attract opportunities to the state of Utah,” Herbert said. “This is a big day for us.”
Amazon will receive an incentive package worth $5.7 million, a figure that represents 20 percent of the tax revenue the company will generate over the next eight years.
The Governor’s Office of Economic Development expects the company will generate an estimated $85.5 million in new wages and $28.4 million in new state tax revenues sourcing from corporate and payroll over the next eight years.
The $5.7 million will come in annual installments over those eight years in the form of post-collection tax rebates.
Herbert rejected the suggestion that a deal struck by the state with Amazon late last year to voluntarily collect sales tax had any impact on the deal. He also noted that the incentive package is one that has become fairly standard for bringing new companies to Utah, and that the incentives are post-performance.
“We’re ready to compete, but we say, ‘If you create jobs, additional tax revenue, we’ll give you some of it back. After you do it,'” he said.
Biskupski declined to answer questions about the recruiting trip with Herbert or offer details about the company’s reported new location in the city’s northwest quadrant.
“We don’t discuss recruitment efforts until the company has made an official announcement,” said Biskupski’s spokesman, Matthew Rojas.
Lynch also declined to comment following the meeting, but a Governor’s Office of Economic Development staffer said the company “will be crafting their own detailed announcement as their process moves forward in the coming weeks.”
Amazon is famously secretive about sharing the locations of its various fulfillment facilities or other details about its distribution network.
The company, launched in 1994 as a web-based bookseller, is now the world’s largest online retailer and is worth in excess of $400 billion, according to a March Forbes report.
Over the previous three years, Amazon’s revenues have increased more than 20 percent per year, and its stock value has increased by 41 percent each year during the same time period. In its first year, Amazon’s earnings were around $1 million. In 2016, the company hauled in nearly $136 billion.