Monroe is considering a tax abatement for Kroger to locate the nation’s first fully automated warehouse in the city.
The agreement for a Community Revitalization Area tax abatement, if approved by council on Dec. 11, would provide a 50 percent tax abatement for 10 years on all real property improvements for the $55 million project.
Kroger announced earlier this month that Monroe was its first choice for the 335,000-square-foot facility with digital and robotic capabilities expected to generate more than 400 new jobs, but said construction was subject to securing state and local incentives.
According to the CRA abatement documents, site work on the project is expected to begin on March 1, 2019 and construction of the 335,000 square-foot facility is expected to be completed by March 1, 2020. The company is anticipating to create about 410 full-time jobs that will generate an aggregate payroll of $18.8 million a year that will be subject to city income tax.
Following an executive session at Tuesday’s meeting, council amended its agenda to add the proposed ordinance for a first reading in public session.
Vice Mayor Dan Clark and Councilman Todd Hickman voted against accepting the first reading of the ordinance on Tuesday. They said there have already been too many tax breaks awarded to warehouse projects in the city.
“We’ve given enough tax breaks for warehouses,” Clark said. “Kroger pulled in $2 billion last year and they should pay their fair share of taxes. Kroger doesn’t need a tax break on the backs of Monroe taxpayers.”
Hickman agreed that the city has provided many tax breaks for warehouse projects. He also questioned why tax breaks should be given for companies when local taxpayers are being asked to support additional tax levies such as the recent request for school security, which was ultimately rejected by voters.
“It doesn’t make any sense to me,” Hickman said.
Known as a “shed,” Kroger’s planned facility will be designed by British online grocer Ocado.
Kroger plans to open 20 customer fulfillment centers — or CFCs — to support what it referred to as its “seamless vision.”
The CFC will introduce innovative robotics technology, allowing for next-generation automated storage and retrieval, according to company officials.
UK-based Ocado is one of the world’s largest dedicated online grocery retailers, operating its own grocery and general merchandise retail businesses under Ocado.com and other specialist shop banners, together with its Solutions division.
It has global ties and advanced digital and robotic capabilities.
Earlier this year, Kroger and Ocado announced an alliance to bring to the U.S. Ocado’s unparalleled innovation and technologies. In October, the companies signed a master services agreement to further solidify their partnership.
This article includes previous reporting by staff writer Eric Schwartzberg.