Once again, the Teamsters put XPO on the legislative record for being a bad actor. In this case, XPO warehousing operations received tax reductions and credits, did not fulfill their agreement with the public and attempted to leave taxpayers hanging.
Teamsters Joint Council 62 Secretary-Treasurer Lawrence Wolfe, Jr. submitted testimony this week about the closure of an XPO warehouse in Maryland, and how a bill in the House of Delegates should be modified to prevent a similar closure that hurts workers and taxpayers.
XPO had a contract with Amazon to handle the online retailer’s business at the warehouse in Aberdeen, Maryland. XPO closed the warehouse in March 2019, after Amazon did not continue contracting with XPO, according to Wolfe’s written testimony.
The warehouse was built by USAA Real Estate Co. and the site was designated as eligible to be an Enterprise Zone by the state and county. The designation enabled the site to receive reduced property taxes for 10 years. The tax abatement is front-loaded, so 80 percent of the reduced taxes is received the first five years.
The site was leased to XPO, and XPO also receive approval to claim state Job Creation Tax Credits. When XPO closed the center in 2019, 167 workers lost their jobs. This took revenue away from the community as those 167 employees were without income to spend, yet tax deals were given to retain the employment for the community. This is an example how bad actors milk communities for a tax deal and then leave them hanging by running away from their obligations.
Based on the XPO closure and another closure involving Safeway, Wolfe offered these suggestions to approve House Bill 525 (HB525), a measure that prohibits the use of business subsidies for company relocations:
- The example of the XPO warehouse closing in Aberdeen shows the connections of a real estate developer, logistics contractor, and customer. We suggest that the Compact be designed so that all these actors are subject to the Compact.
- Not surprisingly, there is a high correlation between companies that abuse business subsidies and labor law violators. We suggest that the Compact track labor law violators as a tool to identifying subsidy abuse.
- We suggest that the state continue to include or if it currently does not, to include, federal solutions to corporate giveaways among its legislative priorities to the federal government.
- We suggest that workforce development funds be included in the Compact. We believe the obligation of these incentives extend beyond the year of performance and clawbacks need to be included in the Compact.