Amazon’s Bessemer center created a ripple effect of logistics-related projects announced in the area.
In the 1980s, after Pullman Standard closed its manufacturing plant in Bessemer, unemployment in the bedroom community of Birmingham reached a record high of 36 percent.
It’s a different story today, says Bessemer Mayor Kenneth Gulley. In a city once known for rail car and steel manufacturing, Bessemer has become a center of automotive supplier activity and a logistics hub, kicked off by Amazon building the state’s first best-in-class robotic fulfillment center in early 2020, which spurred other big names to join the corridor.
Less than a year after opening its $320 million facility in Bessemer, Amazon now employs 6,000 people at the center. And its roots in Birmingham are getting deeper. Since last month, Amazon has announced the addition of three delivery stations – one at the site of a former shopping mall and another dedicated to heavy and bulk deliveries. These investments have not only boosted GDP in Jefferson County, but have set a higher standard for warehouse and distribution wages and have helped solidify the region as a major distribution hub in the Southeast to attract others.
“Having a company like Amazon has done two things: Put back what we lost, but also sparked other interest in the area, which has made recruiting a whole lot easier,” Gulley said. “It has had a direct impact of employing so many of our citizens and citizens of surrounding areas, but it has also had an indirect impact as well, helping us recruit other companies to the area. Companies see Amazon here and think ‘This must be a wonderful area to do business.’”
Amazon’s Bessemer center created a ripple effect of logistics-related projects announced in the area – companies like Carvana, Lowe’s Home Improvement and FedEx have followed the tech giant in choosing to locate in the growing logistics corridor along Lakeshore Parkway. These companies join the many other operations that have located in Bessemer in recent years, making the city a hub of job creation and commerce.
“The Birmingham region has benefited greatly from the timing of Amazon’s opening of their fulfillment center, especially around jobs and tax revenue,” said Jeff Traywick, vice president of economic development at the Birmingham Business Alliance (BBA), who worked with Amazon and others to locate here and previously worked in economic development for the City of Bessemer.
“Originally estimated to create 1,500 well-paying logistics jobs, the facility now houses 6,000 employees with a higher than industry average wage and significant benefits,” Traywick said. “This level of job creation – with full health care coverage and other benefits starting day one – during the pandemic has helped our region better weather the challenges we have seen this past year. The influx of these jobs have helped flatten what could have been a worse unemployment curve, and the project has generated much-needed tax revenue.”
Traywick said the site was previously zoned for agriculture and generated about $398 in taxes a year. Once Amazon completed the facility, and with a tax abatement in place, it was estimated the project would generate an estimated $1 million or more in educational property taxes annually, representing a 2,512 percent increase in property tax revenue in the short term.
“That extra $1 million a year buys about 14,285 new high school textbooks or hires 21 new teachers,” Traywick said.
And Amazon is offering competitive pay, with salaries at the existing fulfillment center starting at $15.30, significantly higher than the market median of $12.95.
Alabama is better because of Amazon, said Secretary of the Alabama Department of Commerce Greg Canfield, who pointed to creative employee benefits like the company’s tuition-assistance program for its Bessemer workforce, called Career Choice.
Amazon only requires a G.E.D. or high school diploma for its associate positions, and once an employee is with the company for a year, they become eligible for up to $4,000 annually in education assistance to earn a certificate or degree for career advancement, either with Amazon or elsewhere.
“Amazon is one of the world’s most dynamic companies, and Alabama benefits from its presence in the state, particularly as we accelerate our efforts to recruit technology companies to set up shop here,” Canfield said. “Employees at this facility work alongside cutting-edge automation and impressive technological innovation. This helps broaden the skills of the workforce in our state and lays a foundation for the future.”
As Amazon expands its presence across Jefferson County and across Alabama – it is currently building a distribution center in South Alabama – the company’s roots in the state all go back to Bessemer, Gulley said. Amazon’s fulfillment center is the largest single investment project in the city’s history, he said, a boost to the economy of Bessemer that puts the city a long way from 36 percent unemployment figures just three short decades ago.
“Obviously a renowned company of Amazon’s status in your city is going to bring a lot of opportunities,” Gulley said. “We are thrilled to have them here in the City of Bessemer and we look forward to a long, productive working relationship and partnership.”