A publication of the Kentucky Center for Public Service Journalism

Amazon Prime to build $1.49 billion cargo hub at CVG; project expected to create 2,700 jobs

By Mark Hansel
Special to KyForward

The Kentucky Economic Development Finance Authority gave preliminary approval Tuesday for incentives that clear the way for Amazon Prime to develop a $1.49 billion cargo hub at Cincinnati/Northern Kentucky International Airport.

The Kenton County Airport Board met simultaneously to approve the land terms of the project, which will be located on CVG property.

Dan Tobergte, president and CEO of the Tri-County Economic Development Corporation (Tri-ED), said the project is the largest, in terms of investment, in Northern Kentucky in at least the last 30 years.

“There still have to be other steps taken to get this finally approved, but this paves the way for the company to go ahead and make its announcement,” Tobergte said. “This meeting has to occur before the announcement for the incentives to work. “

Tri-ED President and CEO Dan Tobergte, left, and Mazak’s Mike Vogt, a KEDFA Board member provide details of today’s agreement to offer incentives to Amazon Prime. The approval clears the way for a $1.49 billion cargo hub to be built at CVG (Photo by Mark Hansel)

The project is eligible for up to $40 million in tax incentives over a 10-year period. Taxes include local occupational license (payroll), state personal income, and state corporate income taxes.

Amazon would need to hire 600 employees to meet the maximum incentives, but is expected to ultimately hire significantly more than that. A news release from Gov. Matt Bevin’s office indicated that the new shipping hub to serve its fleet of Prime Air planes will create 2,700 full- and part-time jobs

“Boone County Judge executive Gary Moore has indicated he’ll support a 75 percent abatement of the local occupational license fee, for this project,” Tobergte said. “That has to be ultimately approved by Boone County Fiscal Court commissioners.”

Tobergte said the project, when fully built out, will be “significantly larger” than the DHL hub currently located at CVG.

A better comparison, he said, would probably be the UPS Worldport Hub, located at the Louisville International Airport.

Mazak Corporation on Industrial Road was the local host for the KEDFA, meeting.

Michael Vogt, Vice President of Human Resources and External Affairs Mazak, is a KEDFA Board member and said the announcement is exciting for the region, and the state.

“What it comes down to in the end is good job creation,” Vogt said. “Those employees spend money in the state, raise families, buy houses, pay taxes. It’s a win-win situation.”

The project will be developed along Aero Parkway in Boone County in land adjacent to the DHL hub.

Construction is expected to begin later this year. The project will be constructed in stages and is expected to take five to seven years to complete.

According to the governor’s news release, Amazon’s Prime Air hub will expand the company’s longstanding presence in Kentucky where it already employs more than 10,000 full-time team members at several fulfillment center locations in Central and Northern Kentucky.

“Amazon’s Prime Air hub promises to revolutionize the fulfillment industry worldwide, and Kentucky is excited to partner with them as they embark on this disruptive, transformative and exciting venture,” said Bevin. “Kentucky’s ideal location, proven workforce and an already extensive shipping and logistics industry have been the backbone of our relationship with Amazon for nearly 20 years. This new project will pay dividends to both the company and our state, and we are truly grateful for the jobs and economic impact it will bring to the commonwealth.”

The new Prime Air hub will create thousands more induced and indirect jobs. Combined with the hub’s direct jobs, total annual payroll and benefits associated with the project will reach well into the hundreds of millions of dollars. Similarly, the project’s economic impact will add hundreds of millions of dollars annually to the state GDP.

With agreements approved by the Kenton County Airport Board and the Kentucky Economic Development Finance Authority, Amazon will build a state-of-the-art sorting, loading and unloading facility on the airport property.

Airport board members approved a 50-year lease expandable to 900 acres of property. Additionally, CVG will invest $5 million in supporting infrastructure that will benefit the airport as a whole.

Last year, Amazon entered into agreements with two carriers to lease 40 dedicated cargo airplanes to support Prime members with fast, free shipping. Today, 16 of those planes are in service for Amazon customers with more planes rolling out over time. Amazon’s Prime Air hub at CVG will support Amazon’s dedicated fleet of Prime Air cargo planes by loading, unloading and sorting packages.

Dave Clark, Amazon senior vice president of worldwide operations, said Kentucky’s advantages made it stand out.

“As we considered places for the long-term home for our air hub operations, Hebron quickly rose to the top of the list with a large, skilled workforce, centralized location with great connectivity to our nearby fulfillment locations, and an excellent quality of living for employees. We feel strongly that with these qualities as a place to do business, our investments will support Amazon and customers well into the future,” Clark said. “We couldn’t be more excited to add 2,000-plus Amazon employees to join the more than 10,000 who work with us today across our robust operations in Kentucky.”

Terry Gill, secretary of the Kentucky Cabinet for Economic Development, commended the company.

“In addition to creating an outstanding number of direct jobs and further establishing Kentucky as a beacon location for the distribution and logistics industry, it’s important to recognize the wider economic impact Amazon’s Prime Air hub will create,” Gill said. “Fully realized, this new operation will add hundreds of millions of dollars annually to Kentucky’s GDP. And it will generate thousands of indirect jobs and hundreds of millions in annual wages and benefits. My congratulations to Amazon on selecting the commonwealth for this prestigious new project. We look forward to the ongoing, deeper and broader relationship.”

Candace McGraw, CVG’s chief executive officer, said Amazon and the airport make a great match.

“The Cincinnati/Northern Kentucky International Airport is the perfect home for Amazon’s new shipping hub. From here, the company will be able to quickly and reliably reach its customers around the world,” McGraw said. “We’ve worked hard to continue diversifying the airport’s revenue streams through targeted cargo and other means, and we are thrilled to partner with Amazon in this new endeavor. In addition to benefitting the company and its customers, Amazon Prime Air will further distinguish CVG and bring significant growth to the region.”

Mark Hansel is managing editor for NKyTribune. Reach him at mark.hansel@nkytrib.com

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One Comment

  1. Mitchell Berryman says:

    Kentucky already has over one thousand Jeff Bezos/ Amazon jobs. Most of them pay $10.60 per hour, barely above the poverty level, a wage that essentially requires the government to subsidize Amazon workers. Shame on anyone who impoverishes the working man.

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