Amazon distribution center provides lessons for promoting economic development

This post first appeared in the Tallahassee Democrat.

Something extraordinary is unfolding on 118 acres of land in the northwest corner of Mahan and I-10 in Tallahassee. It’s not just the 2.8 million square foot building, or the $200 million worth of concrete, steel, piping, and engineering. The sprawling Amazon fullment center may well be the quintessential example of how to promote and support meaningful economic development.

One of the most important lessons from the development, however, may be how close Tallahassee might have been to missing this opportunity.

As a matter of pure logistics, Leon County is well situated to support a major retail fulfillment hub. While some cargo comes in by air, most freight in the US is transported regionally and “last mile” by truck. Having easy access to major highways and access to an airport with expansion opportunities are “make or break” features.

The old real-estate mantra “location, location, location” is as important in retail as it is in any other wholesale, office, or residential investment.

But another component of the project may have been even more important and could easily have derailed Tallahassee’s largest private sector investment in its history.

Amazon wasn’t just looking for a location. Many options existed outside of Leon County. What amazon needed was enough land it could develop quickly to build capacity and meet unprecedented demand.

That’s where DeVoe Moore and Leon County officials stepped in to make the project happen.

Mr. Moore had owned the property for decades, waiting patiently for the right opportunity and project. Despite a devastating downturn in the real estate market during the Great Recession of 2008, he forged ahead to secure the permits necessary to enable major commercial retail development once the economy improved.

The retail market never fully bounced back. Despite investing eight years and millions of dollars in site plans, regulatory approvals, concurrency fees, environmental permits, and conservation improvements, the site sat vacant. When Amazon approached local real-estate agents, his land was a perfect match for the proposed land use.

Fortunately, Leon County officials saw the value in the project. Draping the proposal in the obscure moniker of “Project Mango,” Moore and local officials worked diligently and forthrightly to ensure the project moved forward while protecting public and private interests.

As a result, a project that could have taken three to five years to secure the necessary approvals was finalized in fewer than five months.

The economic development lessons from Project Mango are important, for Tallahassee as well as cities across the state of Florida.

Ultimately, private investment is driven by the availability of land, access to critical infrastructure, and access to labor. In industries such as retail and wholesale trade, opportunities to expand can be fleeting. Access to capital, and windows for building new facilities and establishing new distribution channels, are subject to the booms and busts of business cycles.

Thus, for business owners, “time is money.” Delays can make the difference between an investment that builds a company or losses that drag it down.

With Project Mango, the foresight of Mr. Moore and the willingness of county officials to work proactively within established regulatory approvals and guidelines led to a major private investment that is likely to create more than one thousand permanent jobs. One economic impact analysis suggests the investment could lead to $450 million and 3,605 jobs overall. 

But the investment may not have happened at all if the project was subject to the traditional regulatory processes. Unwieldy, uncertain, and needlessly resource-intensive regulatory systems run the danger of stifling investment. These regulatory hurdles come with costs and burdens that also need to be considered when they are designed and implemented.

Regulatory reform and streamlining should be a paramount priority for local governments. Otherwise, they may be missing out on millions of dollars in investment and hundreds of jobs without even knowing it.

Samuel R. Staley, PhD, is director of the DeVoe L. Moore Center in the College of Social Sciences and Public Policy at Florida State University with more than 30 years of experience working in urban policy and economic development.

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