FedEx Corp. keeps distribution center in Springfield

FedEx (NYSE: FDX) will build the 100,000-square-foot building on two contiguous parcels totaling about 54 acres.

The smaller of the two lots is in PIC West at the southeast corner of Alliance Avenue and West Division Street. Its larger counterpart to the east is a triangular piece of land wedged between Interstate 44 and Division Street that was previously owned by National South LLC.

Lexington, Ky.-based developer Setzer Properties SGF LLC purchased the adjacent properties from National South and the Springfield Business & Development Corp., a wholly owned subsidiary of the Springfield Area Chamber of Commerce overseeing the development of PIC West.

Crosstown traffic

General contractor Rich Kramer Construction Inc. has begun site work for the 154-door shipping facility, which will have about 60 more doors than the 2229 N. Lurvey Ave. building off of East Kearney Street.

Barring any weather-related construction delays, some 200 employees at the FedEx Freight facility on Lurvey will move to the new location in the spring, said Dennis Beal, vice president of physical assets for Harrison, Ark.-based FedEx Freight East Inc.

The site’s size and layout as well as its proximity to I-44 were instrumental in keeping FedEx Freight in Springfield, Beal said.

“The location was absolutely outstanding and was right where we needed to be to fit into the plans we have for an inter-regional hub,” he said. “It’s a consolidation point for freight that’s coming from all over the country. One only has to look at a map to understand that Springfield is an excellent location for that, and being close to an artery like I-44 is essential for good logistics.”

Beal said the company’s freight division deals primarily with shipments averaging 1,000 pounds that are transported throughout the country by tractor-trailers on the move around-the-clock.

“I think the thing that most people don’t understand about our type of facility is that the yard space is as important as the building itself,” he said. “Equipment has to maneuver around in a very small time window, because more than 40 percent of our business is next-day business.”

Sealing the deal

Chamber officials worked with Dallas-based Fischer Corporate Real Estate Services for a little more than a year to help FedEx find the best location for its new facility.

The various parties eventually agreed Setzer Properties would buy the two adjacent parcels, develop the property in line with FedEx specifications and then lease the freight distribution center back to the company, said Greg Williams, senior vice president for economic development at the chamber.

The Missouri Department of Economic Development awarded FedEx more than $431,000 in state tax credits over five years through the Enhanced Enterprise Zone program. The tax credits will assist new job creation, according to DED.

FedEx projected in its EEZ application --– submitted to the state in March – that about 50 jobs could be added at the new facility by 2013, but Beal said there are no guarantees.

“No one can forecast the future,” he said. “We’re in a situation where the economy is pretty flat.”

If history repeats itself, FedEx Freight is poised to hire additional employees and expand the new facility to a maximum of 244 loading doors, Beal said, adding that the company expanded its North Lurvey location three times in 12 years. If not, Beal said FedEx would forego the EEZ tax credits, which are only triggered if a company adds at least two new jobs and invests a minimum of $100,000. New job creation also must occur for partial property tax abatement to kick in.

Williams said new jobs created by FedEx are just the type Springfield needs. He said the average annual salary would be $44,240, which is 45 percent higher than the current average of $30,649 for the Springfield metropolitan statistical area.

“We’re celebrating the investment and planning on the net new job creation,” Williams said. “FedEx – a globally respected company – could very well have done this project anywhere. For them to continue to show confidence in the Springfield market … is something we’re very, very pleased with.”

Ron Looney, the managing member of National South, said his company was glad to be a part of the deal that allowed FedEx Freight to stay in Springfield.

“The national name is incredible for the city of Springfield, and that’s going to be a good-looking facility on the doorstep of our community,” said Looney, a Realtor and president of University Properties & Management Inc.

On a related note, FedEx Ground confirmed plans earlier this year to expand its 63,000-square-foot package processing facility in northeast Springfield near Partnership Industrial Center. Spokesman David Westrick said the expansion, which was originally scheduled for next year, has been pushed back to 2010. The Springfield FedEx Ground facility was one of about 300 nationwide selected for expansion or relocation due to customer growth and demand. [[In-content Ad]]