The West Jordan City Council approved a deal to provide $1.6 million in incentives for an out-of-state company to build a large warehouse under the code name “Lonestar,” but the corporation is believed to be retail giant Amazon.
During the council’s redevelopment agency meeting Wednesday night, Danyce Steck, city finance director, said the project “will definitely spur economic growth,” around the area, at the northeast intersection of Old Bingham Highway and Bacchus Highway.
The identity of the company behind the “Lonestar” code name was not disclosed during the meeting because of a non-disclosure agreement signed by city officials. But a posting on an insiders’ Facebook page identified it as Amazon, angering the company, confirmed a person with knowledge of the deal.
The agreement between the city and Lonestar requires the city to pay $1.6 million, but the company will build roads, water lines and storm drains “at a cost greater than the agreement’s value.”
Steck said the warehouse has a projected property value of $109 million and it’s estimated the city will receive about $200,000 annually in property taxes, meaning the city will recoup its investment within seven years.
“This is a very reasonable agreement,” Steck told members of the council.
The warehouse is set to include 1.3 million-square feet and should bring jobs to West Jordan, City Manager David Brickey told The Tribune.
Because of the non-disclosure agreement, city officials would not talk about the timing of the construction, nor utter the name of Amazon. The company liaison with the city did not respond to a Tribune inquiry.
West Jordan has a history of being willing to offer incentives to bring tech giants to the city. But the $1.6 million package offered this time is downright frugal compared to three years ago when the city pushed a $260 million offer to Facebook to build a massive data center.
That project was killed when the State Board of Education, which was among several government entities which would have had to forfeit revenues in the package, balked. Then Salt Lake County Mayor Ben McAdams had spearheaded opposition, calling the incentives offered “too rich by an order of magnitude,” especially in light of the estimated number of jobs created — 50 to 300.
Brickey said the cost-benefit equation of the current agreement is far different.
“West Jordan is going to benefit from not only the presence of a beneficial improvement project, but this one also has jobs and a benefit that is their tax income that will be coming to not only the individuals that work there but the community as well,” Bickley said in an interview. “This is something that’s quite tangible.”
The city hopes to officially announce the project — including the company identity next week.
Correction: This has been revised from the original to reflect that the company will build the roads, storm drains and water pipes required. The original version incorrectly said otherwise.