Huh? Amazon hiring 250,000 but can’t staff a warehouse?

In a weird way, thank Amazon for teaching valuable lessons by defaulting on its deal with Miami-Dade to open a million-square-foot warehouse with 325 jobs on county economic development land purchased below value.

If you missed it, we’ve written for two weeks about how the county bungled this flawed deal. Amazon built the warehouse within a required three years but didn’t open it, saying it couldn’t hire 325 people needed to staff it without a fourth year.

As we wrote last week, the county official in charge told a committee in essence that filling 325 jobs was a major task so officials never even questioned Amazon’s desire for a fourth year to do it. The committee unanimously rubberstamped the questionable contract extension.

Talk about gullibility.

Then last week, after the vote, Amazon rubbed our noses in it. While it was telling the county it couldn’t open on time under its deal, Amazon was trumpeting in a press release plans for massive hiring right now, in apparently every US location but the never-opened warehouse.

How massive? How about 250,000 more employees across the nation for the holiday season, 16,000 of them in Florida and more than 3,000 in South Florida. They plan to hire 3,000 people here before Christmas but can’t find 325 in the next year? Please!

“The holiday season is always a special time at Amazon and we’re excited to hire 250,000 additional people this year to help service customers across the country,” said John Felton, senior VP of worldwide operations, in the release.

It sure must be the holiday season – the county is giving away any chance to pressure Amazon to fulfill a deal that handed at below market value a site slated to lure a real development engine, at once giving away an opportunity for an economic driver in South Dade and a minimum property value that any such deal should require.

It’s true the county has few tools to make Amazon comply. The faulty deal requires that a distribution center open within three years with at least 325 workers averaging $32,000 a year but sets no penalties for broken pledges, so the county isn’t trying hard.

As Amazon seeks another year, Commissioner Raquel Regalado in asking for some hiring now and opening in six months was just begging – where is the leverage?

And when Commissioner Danielle Cohen Higgins expressed doubts that Amazon intends to ever open, what’s to make them do it?

All of which offers five lessons for deals with those seeking county assets for something that purports to be economic development.

First, all is not gold that glitters. Amazon may have a golden name, but that name isn’t paying off to us. As Frank Nero, former long-time CEO of the county’s economic development agency, the Beacon Council, notes, a sloppily negotiated deal with little or no recourse smacks of the county “buying an announcement” that Amazon was coming. Big names may not mean big deals.

Second, every deal – even with a big-name firm – should have recourse for failure. The county has no leverage with Amazon to open until Amazon actually needs the capacity to fill area orders.

Right now, market demand here doesn’t justify more capacity, so no distribution center.

Third, why give a special break on vital land to firms like Amazon? Mr. Nero, a pro in business relocation, says it’s axiomatic that you never incentivize a distribution center or a supermarket, precisely because they must be nearby to serve customers. Why pay them to be where they need to be?

That lesson applies as Costco seeks South Dade land that the county itself needs and is offering us just 15% of its value. If they must be here they don’t need incentives. This deal floating through county hall deserves a resounding no, not because we don’t want Costco but because if they need to be here, the free market will find a way. Save incentives to make a difference.

Fourth, Miami-Dade’s economy is maturing and doesn’t have to lure businesses. They want to be here, as the pandemic proved. The county must demand a market study on why land should be written down or any inducement granted. Deals need increased scrutiny.

Fifth, the county must stop just taking someone’s word. The man in charge of the Amazon deal told commissioners he’d never actually looked to see if the warehouse was ready for use, he’d just taken Amazon’s word. As we’re heard a million times, trust but verify.

We can thank Amazon for those lessons in how not to do economic development. As they hire thousands of workers here in a few months but keep their distribution center closed, they are showing the county a clear path to do its job protecting public assets.

Let’s see how the county commission handles that in final votes on an Amazon extension and a Costco deal. Did we learn anything?