Officials negotiating to bring massive FedEx facility to Ocala
Published: Thursday, January 31, 2013 at 8:06 p.m.
Last Modified: Thursday, January 31, 2013 at 8:06 p.m.
Marion County and the city of Ocala are negotiating with FedEx Ground Package System Inc. to build a hub facility on 150 acres at the Ocala/Marion County Commerce Park, commonly known as the Magna or Ocala 489 property, bringing an estimated 165 jobs and capital investment in excess of $100 million to town.
The County Commission and City Council will be asked on Tuesday to approve an agreement among the city, county and FedEx Ground to provide incentives totaling an estimated $3.47 million to lure the company to Ocala. The jobs will pay wages equivalent to Marion County's current average annual wage of $31,536. The jobs will be a combination of full-time and part-time positions.
Marion County Commission Chairwoman Kathy Bryant expressed optimism that the deal would get done, saying it would be a "huge win for Marion County."
Speaking about the 165 jobs that FedEx would bring to the area, Bryant noted that the company uses many contractors in its workforce and she believes the actual number of people working at the facility would be much higher.
"That is a very low estimate, and I have been told that the estimates are as high as 1,000 jobs," she said. "That is huge."
The county's share of the incentives are estimated to cost $1.08 million and the city's share would be $2.39 million.
The county is being asked to provide a 10 percent cash match of $99,000 for the state's Qualified Target Industry grant program and a $632,180 waiver of transportation impact fees.
The county and city are being asked to share equally in the estimated $800,000 cost to move a Florida Gas Transmission line, but no more than $400,000 will be paid by each entity.
The city, too, is being asked for a 10 percent, or $99,000, match to the state's Qualified Target Industry grant program and $742,000 of fee waivers.
In addition to the gas line, the company is requesting other infrastructure be moved.
An existing city reuse water line will have to be moved at an estimated cost of $150,000 to the city. And a 230kV electric transmission line will be moved, which is estimated to cost the city $750,000.
In addition, the city is in the process of building Northwest 35th Avenue from U.S. 27 to the property line as a two-lane road, but FedEx would like that to be a four-lane road, which is estimated to cost an additional $1.6 million. The city would not begin that project until Nov. 14, 2013.
Marc Mondell, the city's executive director of community development, said that the state Department of Transportation and the state Department of Economic Opportunity has awarded a $2.15 million grant to be used largely for the road construction and possibly other infrastructure costs. Any costs above the $2.1 million state grant will be paid initially by the company, with the city, alone, or the city and county, combined, reimbursing the company over 10 years, depending on what infrastructure is involved.
The company also will be eligible for Enterprise Zone tax breaks. The city has agreed to waive up to 50 percent of its current local utility tax, which currently is 10 percent, for five years for an estimated total of $248,000. The state will waive half of its 6 percent tax for five years.
The company has said it will make a good faith effort to hire contractors in Ocala/Marion County and hire people who live in the Enterprise Zone.
City Manager Matthew Brower said the city and county's portions are but two of the dominoes that must fall into place for the deal to be realized.
For one thing, city and county officials must approve the deal. For another, the property owner, William Kearns of Ocala 489 LLC, will have to agree to sell and then close with FedEx Ground on 150 acres of the property located on the south end of the Commerce Park, which lies east of Interstate 75 and North of U.S. 27.
And the state will have to approve its QTI grants.
The county, in a separate agreement with the city to be voted on Tuesday, is asking for assurances that the city will not place the Ocala/Marion County Commerce Park land in any Community Redevelopment Area for 25 years from the date of the tri-party agreement.
If all the pieces fall in place, under the agreement with the city, construction on the building should begin no later than July 31, 2014, and be completed no later than Oct. 31, 2016.
The company would have until Dec. 31, 2018, to reach the 165 full-time equivalent jobs and would have to keep those jobs for 10 years after the completion of the building. The jobs would include a variety of management and administrative-level positions.
"This does not address any contractor positions," Mondell said.
FedEx Ground will be making a total capital investment of $122.9 million, of which $75 million will be spent on constructing a 383,161 square foot building. The remainder will be spent on machinery and equipment.
Mondell said the city considers the deal with FedEx Ground a good one for several reasons: FedEx Ground is making a $122 million capital investment and there is a four-year return on investment on the project, which has been reviewed and approved by the Financial Review Committee.
"After four years, that meter keeps running," Mondell said, referring to the return the city will realize in the sale of electric and the tax dollars the company will pay.
The city and county already have invested heavily toward developing Ocala 489's property into an industrial park, now called the Ocala/Marion County Commerce Park. Under the original Master Development Agreement approved by the city, county and Ocala 489 in August 2011, the county agreed to spend an estimated $13.6 million to four-lane Northwest 35th Street from U.S. 441 and 27th Avenue and to extend the road about a half-mile into the site.
Under that Master Agreement, the city agreed to spend an estimated $14.3 million to build Northwest 35th Avenue north from U.S. 27 into the site and to provide water and sewer service. The developer, Ocala 489, LLC, agreed to contribute $7 million of right-of-way toward the road improvements and to build a $2.4 million rail spur to tie into CSX Transportation's "S" line. Ocala 489 is still responsible for providing the rail line.
FedEx Ground is not dependent on rail service.
Located in Moon Township in Pittsburgh, FedEx Ground is a division of Memphis, Tenn.-based FedEx Corporation, a Fortune 100 company.
FedEx Ground provides small package ground delivery services, including day-certain service, throughout the U.S. and Canada as well as residential delivery to nearly all U.S. residences through its FedEx Home Delivery service.
According to FedEx Corporation's 10-K, as of May 31, 2012, FedEx Ground had a staff of about 50,500 employees. The company relies on independent contractors to conduct its pickup-and-delivery operations. Its primary competitors are UPS and the USPS.
According to its website, the company operates 33 ground hubs and more than 500 pickup/delivery stations and 25 FedEx SmartPost distribution centers. There are 650 FedEx World Service Centers, 1,750 FedEx office locations and 6,300 FedEx Authorized Ship Centers and Alliance Partners.
Contact Susan Latham Carr at 867-4156 or email@example.com.
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