Amazon opening first Colorado facility in Aurora

April 26, 2016 |
, has tapped the city of Aurora and the Majestic Commercenter to park its first Colorado facility.

Located 5 miles south of Denver International Airport, the 452,400-square-foot facility will be a sorting center, where sealed packages arrive and are then sorted by zip code for delivery to local U.S. Post Offices.

“We are hiring for hundreds of associates for our new package sortation center in Aurora,” Amazon spokeswoman Ashley S. Robinson confirmed in an e-mail on Monday. She said the new facility is at 19799 E. 36th Drive in Aurora, also known as Building 29 in Majestic Commercenter.

The move comes two months after the Seattle-based online retailer began charging Colorado residents sales tax on their purchases. It fueled speculation that the company had established a business presence in the state.

In a full-page ad in Sunday’s Denver Post newspaper, Amazon said it was hiring part-time fulfillment associates for its Aurora facility. The company also created an online Denver job portal, which said future employees would ” sort, pack and ship customer orders.” The positions start at $13 per hour.

“Aurora’s location, workforce and business-friendly environment were key ingredients in attracting in the world’s largest e-commerce retailer to our city,” Aurora Economic Development Council president and CEO Wendy Mitchell said.

Robinson clarified that these advertised jobs are only for the sorting center. While hiring has begun, no opening date was available, she said.

The Majestic Commercenter is a 1,500-acre business park that also houses hubs for FedEx and the U.S. Postal Service. Majestic Realty last year began construction of Building 29, saying it expected to complete the speculative warehouse and distribution center by Nov. 1, 2015.

After getting stung by UPS shipping delays during the 2013 Christmas season, Amazon began opening intermediary facilities to better control the delivery process. Last year, it also bought a fleet of trailers to move packages between facilities, which helps Amazon rely even less on FedEx, UPS and other carriers.

Amazon also operates large fulfillment centers in more than two dozen states scattered mostly along the coasts.

Since late March, Amazon has announced plans to open at least three more fulfillment centers, each creating 1,000 full-time jobs.

Those include an 800,000-square foot facility near Kansas City in Edgerton, Kansas; a 1 million-square- foot center in Haslet, Texas, north of Fort Worth; and its seventh in California — a 1.1 million-square-foot center in San Bernardino.

Sortation centers tend to be smaller, at around 200,000 to 300,000 square feet, according to logistics consulting firm MWPVL.

But they are also in cities that already have fulfillment centers.

In Kent, Wash., an Amazon sortation center cut delivery time by nine hours so customers could still get two-day delivery if they ordered by 11:59 p.m., instead of the previous 3 p.m., according to a story in The Seattle Times. It also enabled Sunday delivery.

Robinson did not share whether the new Aurora site will also have a nearby fulfillment center, as is the case for Seattle and 15 other sortation locations.

Amazon’s expansion into Colorado is “to better serve customers and this facility will enable faster delivery time,” Robinson said.

Amazon also posted its first Denver-based job for a logistics manager in February. The job required everything from implementing new technology platforms to having the ability “to lift up to 49 pounds with or without reasonable accommodation.”

Several more Denver jobs popped up on Amazon’s careers page this month. Most are tech-related and are part of Amazon Web Services, including solutions architect, DevOps cloud architect and a technical trainer.

Holly Shrewsbury, a spokeswoman for the state’s Office of Economic Development and International Trade, confirmed that Amazon officials “engaged our office to talk about tax environment and real estate options,” she said. But she added that Amazon did not receive any financial incentives to expand in Colorado.

Last November, Majestic Realty Co. acquired 530 acres to expand the business park. The park has 3.5 million square feet in industrial space and the ability to hold 12 million square feet in warehouse and distribution facilities.

At the time, Majestic Realty executive vice president Randy Hertel said “E-commerce is driving the commercial real estate industry in ways we’ve not seen before. We’re seeing greater demand in the 1 million-and-up-square-foot range with land requirements and tenant improvements slightly different than the traditional warehouse and distribution building.”

Hertel declined to comment Monday.

The Denver industrial market saw “record levels of development” in the first quarter this year, according to a report by CBRE, a commercial real estate agency.

Approximately 4.4 million square feet of projects are in development, with more than half located near the airport. Construction on industrial projects is 52 percent greater than the previous peak of second quarter 2007. About 80 percent of the activity is speculative, according to CBRE.

A major change between Amazon and its Colorado customers began Feb. 1, when Amazon started collecting sales tax in Colorado. It fueled speculation that the company had established a business presence in the state.

The states where Amazon operates fulfillment centers align with where the company charges sales tax.

On Feb. 5, Amazon was issued a business license in Aurora and filed to collect sales taxes in that city on Feb. 8, according to public filings.

The company’s move tax shoppers also came amid developments in 5-year-old lawsuit involving a Colorado law that imposes reporting requirements on internet retailers that do not collect sales taxes.

A federal appeals court upheld Colorado’s “Amazon Tax,” which requires retailers that do not charge sales taxes to track customers’ purchases in Colorado, report the taxes that should have been paid to the state and advise buyers of their tax obligations.

However, Amazon instituting sales tax collection may not be a boon for Colorado. Tax revenue limits set by the Taxpayer’s Bill of Rights could result in most of the collections from Amazon having to be refunded to taxpayers.

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