Amazon expands in Spokane, providing a boost to the local, regional and state economies

Amazon’s recent announcement that it would be building a major new warehouse in Spokane provides another welcome boost to the regional and state economies. The Seattle Times reports:

Amazon said Friday that it is building a 600,000-square-foot warehouse in Spokane, the online-retail giant’s first distribution center in Eastern Washington.

The new facility, near the city’s airport, will employ about 1,500 people after it opens  sometime next year. It joins more than two dozen new U.S. warehouses Amazon has commissioned in the last two years, part of an effort to cut the time and cost of delivering packages ordered online and cement the company’s wide lead in e-commerce over brick-and-mortar retailers.

As the Times reports, Spokane put in a long-shot bid for HQ2, a bid that now seems to have paid off.

Spokane was among the 238 regions that submitted proposals last year to host Amazon’s second headquarters. The city — which fell short of a population threshold and other requirements Amazon had set out in its criteria — was a long shot, and didn’t make the cut of 20 finalist areas that Amazon says it will select from sometime this year.

But French said he suspected Amazon’s familiarity with Spokane played a role in the company’s selection of the area for a depot.

We wrote last October of the possibility cities out of the top 20 might nonetheless see benefits, citing a Wall Street Journal op-ed by Progressive Policy Institute economic strategist Michael Mandel.

Mandel allows that automation may eventually reduce employment at fulfillment centers. He adds,

The Internet of Goods—our term for the fast-growing digitization of the production, sorting and movement of physical products—will be the next major step in the internet’s evolution.

If e-commerce is any guide, the jobs created for the Internet of Goods will require workers who have a good mix of physical and cognitive skills, just like the industrial jobs of the early-20th century. Moreover, they will be more evenly spread around the country, boosting growth in America’s heartland as well as the coasts.

And it’s just possible that some of those cities bidding for HQ2 are also putting themselves in play for other areas of e-commerce expansion.

The Lens reports on the expected benefits to the Spokane economy.

Local business advocates say the move will create 1,500 jobs initially and then later up to 3,000 spots when factoring seasonal workers and will attract more businesses to the area which will boost economic activity for the local community.

Larry Krauter, CEO of the Spokane International Airport, told Lens it is still unclear what the exact “Amazon effect” will be with the new center coming to Spokane, however it will be a welcome change. He is also chair of the West Plains/Airport Area Public Development Authority (PDA)

“We think there is a possibility for up to a dozen businesses to locate around the fulfilment center that we will have either direct or indirect support and indirect or direct benefits.”

And that’s just the beginning.

Greater Spokane Incorporated (GSI) CEO Todd Mielke agreed that it is important for the city to get the attention of companies around the country by hosting a Fortune 500 company. GSI is a business development organization and a regional economic development entity.

“That’s one of the effects that matters is did we get the attention of a significant business in this nation that decided this was a good community to do business in.”…

“Now that we have our foot in the door we need to look at how to grow that potential down the road.”

One benefit of the fulfilment center being built in Spokane is that other companies look at the facility as a magnet for their operations. 

The expanded presence in Eastern Washington will provide employment and expanded opportunity throughout the region. Well done.