FedEx Ground has launched construction on a 220,000-square-foot distribution facility in South Windsor targeting an August 2013 opening.
FedEx is expanding its nationwide network to boost its package capacity and speed delivery, and this new location allows the shipping company to handle more volume quickly. South Windsor offered the company a 70 percent tax abatement to choose the town for the facility.
This South Windsor FedEx will replace the current FedEx Ground facility on Rainbow Road in Windsor. Once construction is completed on the new facility, FedEx will transfer its employees out of Windsor and hire new ones as it moves toward of goal of having 125 full-time workers in South Windsor.
“We will add jobs as necessary to support increased demand for package pickup and delivery in the area,” said David Westrick, spokesman for FedEx Ground.
Suncap Property Group of Charlotte, N.C. bought the 62-acre parcel on Sullivan Avenue in South Windsor for $6.2 million and received approval from the town to build the facility. Suncap will lease the property to FedEx as part of a 15-year agreement on the property.
Suncap started moving dirt on the parcel in late 2011 and is expected to ramp up its construction efforts later this year. FedEx Ground — a subsidiary of Federal Express Corp. — will open the project in two phases: a 220,000-square-foot facility by August 2013, and an 87,000-square-foot addition sometime afterward.
The construction plan includes an entrance on nearby Kennedy Road and a berm along Sullivan Avenue.
FedEx wants to increase its market share in the ground delivery business, and since 2005 added 11 new hubs before the South Windsor addition, Westrick said. Through this addition to its infrastructure, the company wants to speed its delivery by one day or more throughout the nation. Currently, 61 percent of FedEx Ground packages are delivered in two days or less, and 82 percent in three days or less.
South Windsor gave FedEx a five-year, 70-percent tax abatement on the real property and buildings on the 62-acre parcel, valued at $11 million.
Town Manager Matthew Galligan said South Windsor still makes out in the deal because the facility will contain $25-$30 million in taxable equipment, plus the delivery vehicles. Before the sale, South Windsor received $1,000 in property tax on the farmland property.
“It is a substantial amount of money that will be coming to the town,” Galligan said.
South Windsor offered a similar deal in 2006 to grocery chain Aldi to put a distribution center in the town. That project was a windfall in taxes and jobs, and town officials hope for similar results from the FedEx project, said Michele Lipe, South Windsor town planner.
“It is great to have development going on,” Lipe said. The FedEx parcel “was a big industrial piece that has been available for some time.”
FedEx liked the South Windsor location for its ease to interstates 291, 91 and 84, as well as Bradley International Airport, said Galligan. The Sullivan Avenue property already had ready access to sewer, water, other utilities and major roads, making for a solid distribution center location.
“It is a great project for the town and the region,” Galligan said. “It brings so much needed industry to the region.”
