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Amazon Effect: Huge Boost in Tax Revenue

Few homeowners like the idea of a new Amazon warehouse nearby, but in Daytona Beach, one parcel’s taxable value of $49K will likely soar to $100M.

WEST PALM BEACH – For local tax collectors, Amazon is the gift that keeps on giving.

Nowhere is that more evident in Florida than in Daytona Beach, where the taxable value on a 211-acre parcel soared from $49,168 to $11,599,157 once Amazon took possession of the property where it is building a 2.8 million-square-foot distribution center. And once the facility is built, the taxable value is expected to again soar to more than $100 million, generating property taxes well in excess of $1 million.

The Daytona Beach example is unusual because it had been granted a “greenbelt exemption” because of its agricultural use. In 2021, NASCAR, the owner then, paid just $7,100 in property taxes, records show. NASCAR used part of the parcel to raise hay, enough so that it qualified for the exemption to be assessed as agriculture.

A 2012 article published in The Atlantic magazine characterized Florida’s greenbelt exemption as “America’s Dumbest Tax Loophole: The Florida Rent-a-Cow Scam.”

While other Amazon sites have not seen the kind of increase that was experienced at Daytona Beach, the increases, nonetheless, have been significant.

According to data provided by the Volusia County Property Appraiser’s Office, the taxable value of the property where the Amazon delivery station is located on Mason Avenue in Daytona Beach shot up from $15,675 in 2018 to $2.2 million the following year, when it was under construction, and then $10.3 million in 2020, its first full year of operation. In 2022, its county taxable value was $11.6 million.

The taxable value of the property where the Amazon fulfillment center is located in Deltona went from $4 million the year before it was built to $55.7 million in 2021, its first full year of operation, and $61.3 million this year.

In Brevard County, taxpayers benefited from County Property Appraiser Dana Blickley’s effort to get an Amazon distribution center in Cocoa on the tax roll this year. Even though the facility will not open until sometime in 2023, Blickley concluded that it was “substantially complete” as of Jan. 1 and, therefore, could be taxed. Had the ruling been made one day later, she would have had to have waited an entire year before placing the facility on the tax roll under Florida state law.

Blickley said her position is if the facility is “substantially complete,” it goes on the tax roll, adding there have been times when builders will play “the delay game” to avoid paying property taxes on their improvements for the following year.

She noted that Amazon did not appear to do anything to force a delay in getting their certificate of occupancy, which was granted Dec. 16. Nonetheless, it filed an appeal with the county’s Value Adjustment Board, challenging the assessment placed on the parcel. Amazon could argue that its building was not substantially complete Jan. 1, according to Blickley, but so far the appeal claims that the parcel is overvalued.

Amazon is looking at a 28-fold increase in taxable value, from $1.1 million to $31.4 million. The Amazon facility was Cocoa’s second-most-valuable structure to enter the tax roll in Brevard County this year.

The bottom line is a tax bill of $536,958 as opposed to the $26,583 paid in 2021.

In Fort Myers, this year’s proposed tax bill on Amazon’s finished fulfillment center off Alico Road is more than $411,000.

“When you look at what that means in terms of just the school district alone, it’s like $160,000. Off of that single piece of property,” said Matt Simmons, a managing partner at Southwest Florida-based real estate appraisal firm Maxwell, Hendry & Simmons. That’s “out of the gate,” he said, as it hit the tax roll for the first time this year.

East of Naples, Amazon’s smaller “last-mile” distribution center has an estimated tax bill of more than $188,500 for this year. The project went into a building that sat unfinished, significantly increasing the value.

“These projects on an annual basis throw a tremendous amount of resources in at the various taxing districts, regardless of anything else that is created by the jobs themselves,” Simmons said.

Elected officials have the difficult jobs of weighing the pros and cons of turning down projects that will provide such a boost to a jurisdiction’s tax base.

Jesse Saginor, a professor at Florida Atlantic University who chairs the school’s Department of Urban and Regional Planning, said there are costs associated with approving a large-scale Amazon facility and those costs have to be weighed against the increased tax revenue. But for some counties and municipalities, there is a real need to generate tax revenue, he noted.

“Put simply: companies and people can move; cities cannot. That tax revenue might be much greater as an Amazon warehouse compared to ag land, but what if Amazon realizes they have too many warehouses in the future and the warehouse becomes vacant?” he said. “So, that tax revenue might not be forever, which makes deciding what to do extremely complicated.”

Indeed, the Village of Golf rejected a proposal for an Amazon “last-mile” facility last year, in part because staff was concerned about what might happen should Amazon decide to shut it down.

“Then again, Amazon doesn’t have to run for office, but officials do, so the decision may be a political one rather than a financial one,” Saginor said. “It’s an extremely complicated process because no one has a crystal ball to know what the future holds.”

Property values – before and after Amazon

Here is a chart that shows the property values of the land before and after Amazon built its structures in Florida cities:

  • Cocoa (completed, but not yet operating), $1.1 million, $31.4 million
  • Jupiter (2021 built), $2.7 million, $134 million
  • Riviera Beach (2021), $2.9 million, $17 million
  • Daytona Beach (2019), $15,675, $11.6 million
  • Daytona Beach (under construction */**), $49,168, $11.6 million
  • Deltona (2021), $4 million, $61.3 million

* Land was assessed as agriculture before Amazon purchased the site

** Final assessment not yet levied

Copyright © 2022 The Palm Beach Post. USA Today Network–Florida reporters Dave Berman (Florida Today), Clayton Park (Daytona Beach-News Journal), Laura Layden (Naples Daily News), Derek Gilliam (Sarasota Herald-Tribune), TaMaryn Waters (Tallahassee Democrat) and Florida Government Accountability reporter Douglas Soule contributed to this report.