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Retail battlefield: Walmart vs. Amazon in Eastern Oregon

By George Plaven

Staff Writer

and Phil Wright

Staff Writer

Published on November 28, 2017 7:00PM

A semi-truck enters the Wal-Mart distribution center on Tuesday outside of Hermiston.

Staff photo by E.J. Harris

A semi-truck enters the Wal-Mart distribution center on Tuesday outside of Hermiston.

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To keep up with their online demand Amazon has 16 data centers built or under construction in Umatilla and Morrow counties.

Staff photo by E.J. Harris

To keep up with their online demand Amazon has 16 data centers built or under construction in Umatilla and Morrow counties.

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Walmart CEO Doug McMillon has been pushing the company to grow their online market share since taking over four years ago.

Staff photo by E.J. Harris

Walmart CEO Doug McMillon has been pushing the company to grow their online market share since taking over four years ago.

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Two of the biggest names in retail are investing serious money in Umatilla and Morrow counties as they wage a multi-billion dollar battle for the hearts and wallets of consumers across the globe.

Walmart, which has stores in Pendleton and Hermiston as well as a massive distribution center just south of Hermiston, disperses an annual payroll of $63 million in Umatilla County. Amazon, meanwhile, has grown into the world’s largest online retailer, and has spent more than $2 billion building new data centers in Morrow County alone.

Both corporate giants have established a major presence in the area, and neither appear to be letting up as they duel for shopping supremacy. That has added local jobs and grown the local tax base.


Brick and mortar


Tom Heidegger, who is based in Pasco, is the market manager for 12 Walmart stores in Eastern Oregon, eastern Washington and parts of Idaho. He was at the recent reopening of the Pendleton store following weeks of major upgrades and told the crowd of associates — Walmart’s term for employees — a hard truth: Walmart did not always have a good connection to the community and customers of Pendleton.

The Hermiston store employs around 400, and the distribution center has about 930 employees. Employees also have access to insurance, Heidegger said, and “the vast majority” have 401K plans.

The associates are part of the community, he said, and the distribution center and two stores in Umatilla County have a collective annual payroll of $63 million.

Walmart this year paid $21,933 in local property taxes for the Pendleton store and $32,520 for the Hermiston store. The company paid $35,575 in property taxes in 2002 for the Distribution Center in Hermiston.

The tab this year came to $186,042.

Pendleton store manager Shawna Nulf said she has grown to see the Pendleton crew as an extended family. She oversees 230 employees at the Pendleton Walmart, 70 percent of whom work full time. Heidegger said most retailers employ 30 percent of their workers full-time and 70 percent part-time, but Walmart flips that statistic.

Heidegger said building new stores is not likely for the region, but the company remodels locations every five to seven years.


Clicks and bytes


E-commerce, meanwhile, has long been the name of the game at Amazon, which has grown into the largest online retailer in the world based on revenue and second-largest in total sales.

Every order placed at Amazon.com is stored in one of the company’s large, nondescript computer server warehouses known as data centers. The concrete structures are the physical manifestation of what techies refer to as “The Cloud,” storing everything from Tweets to downloads to Internet purchase information.

Data centers require an abundance of water and cheap electricity, which is what drew the industry to the ports of Umatilla and Morrow along the Columbia River. The first data center in Morrow County came online in 2011 and construction hasn’t slowed since.

Though each facility only hires around 20-30 full-time employees, they are well-paying jobs. Experienced technicians earn between $30-35 per hour.

Mike Gorman, assessor and tax collector for Morrow County, said Amazon has two main sites at the Port of Morrow’s East Beach Industrial Park near Boardman. The six completed data centers have a total market value of $1.63 billion, of which $1.48 billion is exempt from taxation through agreements with the Columbia River Enterprise Zone, which provide three to five years of tax exemption as an incentive for companies to build in the region.

The company also purchased a third site east of Lewis and Clark Drive for $2.9 million earlier this year.

In Umatilla County, assessor Paul Chalmers said Amazon has four completed data center buildings at the McNary Industrial Park east of Umatilla, and a fifth is now under construction. Amazon also plans to build four new data centers at a site west of Hermiston, at Westland and Cottonwood Bend roads.

Like in Morrow County, the Umatilla County data centers are subject to tax exemptions through the Greater Umatilla Enterprise Zone and Oregon Strategic Investment Program, or SIP. But once those values come on the books, Chalmers said the tax base will receive a substantial boost.

“Everyone reaps a benefit from this investment, from a tax standpoint,” Chalmers said. “There is a direct benefit to having these folks develop here in Umatilla County.”

Chalmers said the added value will help offset the recent devaluation of the Hermiston Generating Station, a change that caused some sticker shock among taxpayers earlier this year.



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