Before prime time: Did Amazon’s 1999 arrival in Kansas deliver on hype?

Former Amazon distribution center, Coffeyville, Kansas

나는n 1999, Amazon — still in its infancy — meant only two things to most consumers: low-priced books and CDs.

But for one small town in Kansas, residents believed the online retailer had the potential to be a game-changer for their economically depressed, rural community.

“People in Coffeyville were practically doing cartwheels in the streets,” said resident Denece Field-Garcia, describing the mood when Amazon announced it was opening a warehouse in the southeast Kansas town of about 11,000. “Everyone was excited about the increase in wages and being able to work different shifts.”

Amazon’s move to Coffeyville doubled the Seattle-based company’s warehousing capacity and set the stage for the retailer’s massive expansion and diversification to come — nearly two decades before Kansas City and 237 other regions and cities began the fight to lure the company’s new second headquarters, dubbed HQ2.

As competitors await Amazon’s final verdict on the winner, the online trendsetter’s earlier arrival in Kansas offers parallels and perspective on wooing — and landing — the dream employer.

For some, Amazon left the Coffeyville community wanting: The transformation wasn’t what they initially envisioned.

That’s not unusual with economic development announcements, said John Schmid, a member of the Montgomery County Action Council’s executive committee, a private-public partnership that “had its fingerprints all over” the deal to bring Amazon to Coffeyville.

“It peaks with the brass bands and street parades. People saying, ‘My god! They’re coming! They’re coming!’” Schmid said. “And then, invariably, the expectation from the man on the street — who has short-term memory or who might never have been through this before — is met with a letdown. Kind of like a buyer’s remorse stage where the instant gratification didn’t happen. People were ready see an influx of workers, buildings and, ‘Oh, my worthless nephew can finally get a job and move out of my brother’s basement.’ It doesn’t happen that way.”

Pack fast, pick fast

The Coffeyville site was described as “enormous” in 1999 by Publishers Weekly, noting Amazon planned to expand the 460,000-square-foot building to more than 750,000 square feet. (The warehouse structure, formerly owned by Golden Books/Western Publishing, eventually would be modified to nearly twice its original size.)

Five hundred jobs were initially expected to help house and distribute “books, CDs, videos and other products,” according to Amazon. While a far cry from the 50,000-plus, high-paying jobs associated with HQ2, word of $11-an-hour positions 20 years ago in a community without many options above minimum wage for entry-level work spread quickly, Field-Garcia said.

She and hundreds of other residents found employment at Amazon with the distribution center eventually hiring a workforce of more than 800, according media reports.

Most people were there for full-time jobs, said Rosa Byrd, who worked at the Coffeyville warehouse from 2007 to 2014.

“Amazon offered mandatory overtime, and of course you didn’t have a choice: You had to be there,” she said. “At a peak time, we would work anywhere from 60 to 66 hours a week. We lived there!”

It was an environment Byrd and Field-Garcia said they loved, but it wasn’t the perfect work for everyone, they agreed.

“You had to get your numbers. You had to pack fast. You had to pick fast. They were a numbers-oriented company,” said Byrd. “You had to actually be motivated. There was a lot of walking. Before we got the air conditioners, I sweated in places I didn’t know I could sweat.”

Amazon’s Coffeyville distribution center didn’t add a new HVAC system until 2012, according to property records. That took a toll on both employees and machinery, which had to be cooled with generator-powered portable air units, Schmid said.

“Coming from Seattle, they didn’t figure you’d need an air conditioner in a warehouse,” he said, chuckling.

The company’s labor challenges weren’t all associated with the indoor climate, of course, economic development leaders said.

“They had a tremendous problem trying to get people here,” said Rick Thompson, another Montgomery County Action Council leader and president of Thompson Brothers Welding & Industrial Supply. “We didn’t have enough of a base of employment to take care of Amazon the way they wanted. They were running buses all over the place, picking people up in Joplin (Missouri) and Tulsa (Oklahoma). They had a tough time filling those seasonal jobs.”

Amazon’s business model also evolved as customers demanded not only low prices, but also quick delivery, Thompson said. After the property Amazon leased in Coffeyville changed hands, a rent increase was the last straw for the company, local officials and workers said.

In October 2014, Amazon announced it was closing the southeast Kansas distribution center, ultimately shifting focus to communities like Lenexa and Edgerton, Kansas, which now boast three Amazon fulfillment sites.

“The thing that made Coffeyville so appealing 15 years ago — its location in a state with a small population, resulting in fewer sales that could be taxed — is the key reason Amazon is closing it down now,” the Seattle Times reported in 2014.

The company itself offered little official explanation for the move.

“They started putting warehouses into cities so they could ship same-day,” Thompson said. “A big chunk of their business in those metro areas. It made sense for them to do what they did. I hate saying that, but it did.”

Former Amazon distribution center, Coffeyville, Kansas

Former Amazon distribution center, Coffeyville, Kansas

‘Do you feel it?’

Amazon’s departure from Coffeyville came at a rough time for the community, which had been devastated by a flood in 2007 that further eroded its labor pool. Southwire, formerly American Insulated Wire, also announced in 2014 plans to leave Coffeyville, taking 200 jobs with it.

“On the economic development side, you never know whether they are going to stay,” Thompson said. “Southwire and Amazon leaving in the same year was tough.”

Still, Coffeyville officials were quick to point out that Amazon’s tenure hadn’t been the economic boon some suggested in 1999. Longtime employers Coffeyville Resources oil refinery and Coffeyville Resources nitrogen fertilizer plant remain the town’s jobs engine.

“I’m not trying to downplay it. Amazon was a good company and it was good for Coffeyville, but I couldn’t say that it was life-changing,” Thompson said. “Coffeyville continued to decline in population even with Amazon here. It didn’t change our demographics. It didn’t change our community as a whole.”

Mike Ewy, chief executive officer for Community State Bank in Coffeyville, arrived in the community a year after Amazon, he said. But it quickly became clear the company wasn’t an active corporate partner based on Amazon’s lack of interaction with the local chamber of commerce, he said.

“Their management moved every two years. That was just their company model,” said Ewy, explaining the corporate-community disconnect he perceived. “That really made it difficult to get connected to a decision maker.”

Amazon’s local economic impact was minimized by those in upper-level management positions often living hours outside the Coffeyville community in larger cities, he said.

“The closure announcement made all the papers and people were calling and saying, ‘I saw Amazon is leaving and that’s devastating.’ And I was like, ‘Well, I’m not sure yet,’” Ewy said. “As a local bank CEO, I was asking my customers, ‘Do you feel it?’ And they said no.”

In hindsight, Ewy wonders if Coffeyville gave Amazon too good of a deal in 1999 and subsequent years, he said.

“Obviously communities go after new jobs like crazy,” he said. “We were giving Amazon $350,000 a year to be here. When we talk about the lack of an impact when they left, it really made me question whether that $350,000 was appropriate.”

“The Kansas City metro probably throws money around like they have deep pockets, but they have a wide asset base to draw all that money from — whether it’s from ad valorem taxes or sales taxes,” Ewy added. “That’s money we just don’t have.”

Ewy and Thompson agreed landing Amazon’s HQ2 would be a “whole different animal” for Kansas City compared to Coffeyville’s experience on the company’s timeline. Despite Amazon’s 2014 departure from his community, Thompson said Kansas City would benefit greatly from the online giant’s promise of truly high-paying, transformative jobs.

“That whole area is ready to go,” he said. “You can call it Kansas City, Missouri, or Kansas City, Kansas. Who cares? It’s all one big city. Two states would split Amazon and get the revenue off it.”

Nothing like Amazon

Economic development is always an unknown, Schmid said.

“Amazon entered into that initial agreement not knowing if they would last six months, a year, two years,” he said. “Hell, the guys working to install conveyer belts in the building in ’99 made the comment, ‘I figure we’ll be back in 18 months to take all this back out. There’s no way these guys are going to be able to be able to make any money. They’re selling it cheap. Mailing it over the computer!’”

Byrd would still be happily working for the company if it had stayed in Coffeyville, she said. Amazon, its management and workers created a family she’ll never forget, she said.

“When I first started, I didn’t think I could do it because I’d never worked in a warehouse before. And my trainer said, ‘Yes, you can do it. Yes, you can do it.’ I wound up being the top packer for Amazon,” Byrd said. “They gave me a sorter tray with everybody’s signature on it that I have hanging in my bedroom. I really miss Amazon. It is an awesome company to work for.”

“The last day was the hardest,” she added. “Everybody was in tears.”

Today, Byrd drives four hours round-trip from Oswego, Kansas, to a Macy’s distribution center job in Owasso, Oklahoma, underscoring the region’s economic challenges.

“I like it, but it’s nothing like Amazon,” she said.

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