How Amazon.com found fulfillment in Shakopee

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Who wouldn't want to work with a conveyor belt like this?

Last year, Shakopee resident Kathi Mocol was informed that Amazon.com was sending an unexpected package her way. Mocol was taken aback. She hadn't ordered anything.

She thought about refusing the delivery, especially when she learned the company wanted to charge her for it. Then Amazon changed its mind: Keep it, the company said. It's free!

Today, this huge box remains unopened, sealed. Mocol thinks it might get opened sometime in July.

Her unexpected delivery? A warehouse.

"[Amazon] needed to go somewhere," says Mocol, a first-term Shakopee City Council member. "And they had already made a commitment to Minnesota."

Shakopee seemed an odd choice for Amazon to locate one of its "fulfillment centers," the giant warehousing and shipping facilities that make online shoppers' laziest dreams come true. For starters, Mocol says, Shakopee was running out of land: Amazon literally took the last available piece in town.

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What's more, Shakopee, population 37,000 and a bedroom community for commuters to the Twin Cities, didn't have anything near the 1,000-strong workforce Amazon was looking for. Even before Amazon's arrival, local businesses complained they couldn't find enough workers.

And some of those gigs might even be good ones. The ones at Amazon's fulfillment centers are notoriously brutal. Of the thousand jobs in Shakopee, the bulk of them will be "fulfillment associates," meaning the people who scramble to find, collect, and package the items an online shopper just purchased with a click. These are rushed onto a conveyor belt that delivers them to the back of waiting semi-trucks.

A job listing for an associate gig at the Amazon plant in Shakopee says the employee will have to have "customer-obsession" to succeed. What that means is speed: Associates, or "pickers," are all competing against each other to find and ship as many items as they possibly can for 10 hours at a time. Each staffer's work is meticulously measured; fall behind the pace and you're fired. All that for $12.50 an hour.

"Are these good-paying jobs?" asks Shakopee City Council member Matt Lehman. "Some. Are the majority? No."

In exchange for this "job creation," Amazon wanted its back scratched. The company initially sought about $6 million in tax subsidies before it would agree to build the fulfillment center. This, from the highest-valued retail company in the world ($247 billion), was a bit much, even for business-friendly Shakopee. Council members criticized the proposal, and the public and press howled.

Amazon spokeswoman Nina Lindsey couldn't say with certainty how these negotiations compared with other company projects.

"We typically do engage with local city and state elected officials, and economic groups to help go through the process," Lindsey says.

Typically? Try always. In the last few years, fulfillment centers have broken ground in Florida, Illinois, Rhode Island, Massachusetts, and, in 2013, in Kenosha, Wisconsin, each backed by multimillion-dollar tax carve-outs.  

A huge corporation taking root throughout the country, always with its hand out, hiring tens of thousands of low-paid employees with no job security. It'd be a scandal, if so many of us weren't reaping the benefits. Amazon's 50-odd fulfillment centers employ about 90,000 people. More than 50 million Amazon Prime users spent an average of $1,000 each on the website last year.

Then there's the sad truth that this is just how business gets done in America. Especially, of late, in Shakopee.

Indeed, Shakopee landed a series of big-business openings in a short period. Shutterfly, the online photo publishing company, opened a new operation there, as did DataCard, which makes credit card printing machines, SanMar, a clothing distributor, and Trystar, makers of electrical equipment. Those moves and others all came within a four-year flurry of economic activity.

These relocations were no accident. Under former mayor Brad Tabke, the city aggressively pursued businesses. The companies received a total of millions of dollars in tax subsidies from the city or Scott County, and the state's Department of Employment and Economic Development (DEED) helped sweeten the Shutterfly deal, which came with $3 million in total public subsidies.

Finally, with Amazon, they drew the line. Hours before the crucial council vote last May, Amazon pitched a softer deal: Nearly $6 million of its tax payments will be rerouted to the county and the city to build up infrastructure, especially roads, around the warehouse site, instead of back to the company.

Tabke, the former mayor, declined to comment, saying he would defer to "elected officials." It's a curious response. The current mayor, Bill Mars, wasn't on the job when the city inked its deals with Amazon and other companies. Tabke was.

Tabke's new job speaks for itself. In February, a month after he left office, Tabke launched Grepoli, a consulting business that caters to corporations looking to strike a deal with local government. Its website says Tabke will see business proposals, even the "politically dicey" ones, through the process of getting "the best deal" — and not for the taxpayers.

"Feel the love," Tabke's website advertises. "We can help you earn incentives for your project."

Earned or not, incentives are there for the taking, a fact Tabke knows better than most, having rubber-stamped them throughout his time in office. This last one, for his biggest business partner yet, was thwarted, and only because an exhausted but awakened public turned it down.

We shouldn't blame Tabke for exiting the revolving door right into his new consulting gig. He's a product of his environment. For corporate America, the closest thing to a fulfillment center is city hall. 

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