Council approves up to $1.7 million incentive package for expanding Shipt HQ

An estimated 881 new jobs are expected in the city as part of the incentive package for Shipt Inc. that was unanimously approved by the Birmingham City Council on Tuesday; the average salary of those positions is expected to be $50,000.

Shipt Inc., a Birmingham-based tech company that was acquired by Target for $550 million last year, recently announced their intentions to maintain and grow their headquarters in Birmingham.

Below is the item as it appeared on the agenda:

Josh Carpenter, Director of the Mayor’s Office of Innovation and Economic Opportunity, said the goal of the incentive strategy is to invest in Birmingham’s workforce.

“If you invest in land it depreciates. If you invest in property, it may lose value over time. But if you invest in people, there is a multiplier effect that lasts for a long time…Those jobs will ensure the vitality of Birmingham’s communities and open new opportunities to the people who live here.” Carpenter said during Monday’s Budget and Finance Committee meeting. “Every dollar that Shipt receives [from the city] will go toward improving Birmingham’s workforce.”

Shipt is an online delivery service that was founded in Birmingham, Photo Courtesy of Shipt.

The workforce investment strategy is threefold, Carpenter explained. Collectively it will be known as the “Putting People First” program.

— Talent Investment Program (TIP): Provides additional funding for the company to recruit high-demand, hard-to-reach occupations.

— Talent Acceleration Program (TAP): Designed to take workers who may be low-skill and low-wage and set aside funding for those employees to access new tuition pools and learn new skills while furthering their education.

— Talent Optimization Program (TOP): This component is designed to help the company hire local talent. It pushes additional funding to the company as a way to hire Innovate Birmingham graduates and residents of the city. It creates a pool of funding to partner with universities and other local entities to train mid-level managers, a group that Carpenter said there is a shortage of in Birmingham (70 percent of Innovate Birmingham participants are city residents).

Josh Carpenter presenting the terms of the Shipt incentive agreement to the full council.

“With these new 881 jobs, this will be the biggest economic impact we’ve seen in a while,” Carpenter said. “These are high-quality jobs that we are fortunate to keep in Birmingham; they easily could’ve gone to Minneapolis or San Francisco… It’s a great opportunity for the city to invest in the future of our workforce. This is going to help Birmingham keep the momentum for being a tech-oriented city.”

Shipt representatives have agreed to provide updates to the city as a way to ensure the terms of the agreement are being met and the TIP, TAP, TOP programs are working effectively. Jefferson County is also expected to provide financial incentives in the near future.

In conjunction with the Shipt incentive deal, the council also approved the sale of the city-owned parking deck that is attached to the John Hand Building, which will continue to house the expanding Shipt HQ. The money from the $1 million sale to SPT Parking Deck LLC, a subsidiary of Shipt, will be transferred to the newly formed Community Revitalization Fund, established by Mayor Randall Woodfin to address issues surrounding infrastructure and weed abatement in Birmingham’s Neighborhood.

Below is the item as it appeared on the agenda:

In terms of local partnerships with Shipt, Councilor Steven Hoyt said he would like to see Miles College, and minority-owned organizations be included with some of the workforce development programs.

“I think Miles College could add some intellectual benefit,” Hoyt said. “If you all could incorporate them, I think there needs to be some diversity. Academia is the great equalizer in intellectual capital. I hope that your scope is a little broader than just UAB.”

Councilor Hunter Williams said he is encouraged by the cooperation between the city, county and state officials to make this deal a reality. “We definitely need to incentivize job growth here. That’s something this city really needs to be focused on and it’s great to see that we were able to work with the county and state to help with that here.”