By Sarah Brookbank / www.cincinnati.com / July 22nd, 2016
BURLINGTON – FedEx Ground Package System has been a Northern Kentucky employer for more than 10 years. The company is now working on a $150 million expansion and wants to secure industrial building revenue bonds to help offset project costs.
The project is currently underway. The facility is located off Toebben Drive in Independence, but is located in Boone County.
Boone County Fiscal Court heard a first reading for the revenue bonds on July 19.
County Administrator Jeff Earlywine said the project is a different type of economic development project than the county normally does.
“We usually employ elements of the Kentucky business incentive program to incent job growth and job creation and tax expansion to create new jobs and a portion of the wage assessments are applied and can then be used to support the project,” Earlywine said. “We’re not using KBI in this particular project, it’s a little unique. There is not a high number of jobs but there is a significant amount of capital investment, about $150 million to be exact, half for real estate and building and half for tangible personnel property inside the building.”
The FedEx expansion will add 62 new full-time jobs and 378 part-time jobs. The revenue bonds will help pay for construction, land purchase and filling the building.
The company has bought about 80 acres of land and will add 355,000 square feet of space to its existing distribution center.
FedEx plans to spend about $7 million on land, $70 million on building construction, and $73 million on equipment, according to estimates provided by the company.
In 2004, FedEx was given a tax exempt bond issuance for the original development. The initial amount was for $65 million. The second bond would last seven years, which would end with the 2004 bond.
Boone County owns the land, and will be the issuer for the bonds, which means FedEx will not be taxed. Instead, FedEx will make a payment in lieu of tax, to cover the tax bill the property would have received if it were not owned by the county.
The tax exemption is only for real estate tax and tangible tax.
The new project would be exempt from 80 percent of county and state real estate and tangible taxes. FedEx would pay 20 percent of those taxes, but would pay the full amount of taxes for the school districts and others.
Earlywine said when the bonds are paid off by FedEx, they will get the land from the county, instead of leasing it. There is no liability for the county to repay the bonds.
Judge- executive Gary Moore said FedEx is a good resource for the county, because it brings other businesses into the area.
FedEx currently has 116 full-time employees and 538 part-time employees.
Second reading for this ordinance is Aug. 16.
www.shipwatchers.com - 24/7 Support including Chat