Success Stories
FedEx Ground Locates $15 Million Facility in Alton Park
Federal Express has set a new standard in the City of Chattanooga’s goal of redeveloping former industrial sites and bringing new jobs to underserved communities.
With the help and leadership of The Enterprise Center, FedEx recently relocated its expanded ground delivery operations to the Renewal Community (RC) neighborhood of Alton Park, an area in South Chattanooga with one of the highest poverty and unemployment rates in the city. The site is also home to the former Wheland Foundry landfill.
On October 10, 2007, the RC Manager participated in groundbreaking ceremonies for FedEx Ground, the small-package ground delivery unit of FedEx Corp. Nearly a year later, FedEx Ground relocated to its newly constructed $15 million facility, combining ground transportation and home delivery services into one large hub. The 163,000 square-foot facility will add more than 80 new jobs during a three-year period, bringing the total FedEx workforce in Chattanooga to some 325 employees and independent contractors. By locating in the RC, FedEx Ground is eligible to receive RC Wage Credits of up to $1,500 per employee, per year until 2009 for current and newly hired employees who also live in the RC. The 80 new jobs will include management positions as well as full-time and part-time package handler positions that will pay between $8 and $10 per hour. In addition, Scannell Properties #85 LLC, owners and developers of the building leased by FedEx Ground, were awarded $5 million in CRD tax savings for the construction of the new facility. The CRD or Commercial Revitalization Deduction allows Scannell to accelerate the depreciation of the building at a faster rate than is generally permitted by the IRS.
The new FedEx Ground facility, completed in the fall of 2008, is located on a former landfill
for Wheland Foundry. After Wheland closed, a developer from Birmingham, AL, proposed building a 100-foot high landfill on the site. The landfill proposal was met with strong opposition from residents and local officials, and the developer was forced to abandon the plan. Today, FedEx Ground is an example of the city’s successful Brownfields Program, which seeks public and private investments in the remediation and reuse of brownfields, the revitalization of the urban core, and the creation of new jobs in distressed communities. The RC Manager played a key role in recruiting the newly constructed FedEx Ground hub to the RC. This effort was in partnership with the Mayor’s Office, Chattanooga Area Chamber of Commerce, City of Chattanooga, Hamilton County Government, and Tennessee Department of Economic and Community Development. In addition to the RC incentives, the RC Manager advocated for city, county and state incentives, of which the project received more than $1.5 million in these incentives.
The RC Manager also assisted FedEx in securing a local real estate professional to negotiate the relocation of 22 adjacent residential properties, including 17 homeowner households and five rental units. A majority of the homeowners were low-income, elderly residents who had lived in below market rate homes in this industrial corridor. Homeowners were compensated with above market rate values that allowed them to purchase comparable housing in other communities.
FedEx Ground Sparks Additional Investments in the RC
The relocation of FedEx Ground to the Renewal Community (RC) has sparked renewed interest by local employers to expand their operations to distressed communities and former industrial sites.
Two companies, Chattanooga Labeling Systems and Design Alloy Products, Inc., announced plans in 2007 to expand their operations to the low-income community of Alton Park. A predominantly African American community with one of the highest poverty and unemployment rates in the city, Alton Park is also the new home of FedEx Ground.
Marvin Smith, owner of Chattanooga Labeling Systems, had previously purchased an abandoned glass manufacturing plant in Alton Park with a goal of creating an industrial park for manufacturing and warehousing businesses. The RC tax incentives were keys to his decision to locate in the community. A 2004 CRD recipient for his development of two warehouses on the site, Smith decided to relocate his bottle labeling business to the RC also. He applied for and received a 2007 CRD allocation of $600,000 (under the name 45th Street LLC).
Design Alloy Products, Inc., another local employer undergoing expansion, was seeking to relocate its foundry to property adjacent to the new FedEx Ground facility. However, City of Chattanooga zoning regulations restricted the foundry from locating within 1,000 feet of a residential zone. The RC Manager was asked by Chamber of Commerce officials to intervene.
Two companies, Chattanooga Labeling Systems and Design Alloy Products, Inc., announced plans in 2007 to expand their operations to the low-income community of Alton Park. A predominantly African American community with one of the highest poverty and unemployment rates in the city, Alton Park is also the new home of FedEx Ground. Marvin Smith, owner of Chattanooga Labeling Systems, had previously purchased an abandoned glass manufacturing plant in Alton Park with a goal of creating an industrial park for manufacturing and warehousing businesses. The RC tax incentives were keys to his decision to locate in the community. A 2004 CRD recipient for his development of two warehouses on the site, Smith decided to relocate his bottle labeling business to the RC also. He applied for and received a 2007 CRD allocation of $600,000 (under the name 45th Street LLC).
Design Alloy Products, Inc., another local employer undergoing expansion, was seeking to relocate its foundry to property adjacent to the new FedEx Ground facility. However, City of Chattanooga zoning regulations restricted the foundry from locating within 1,000 feet of a residential zone. The RC Manager was asked by Chamber of Commerce officials to intervene.
With the support of Mayor Ron Littlefield and due to the relocation of 22 residential properties as part of the FedEx project, the zoning was changed from R-3 to M-1. As a result, Design Alloy Products, Inc. created 35 skilled positions, taking advantage of the RC Wage Credits and Work Opportunity Tax Credits for eligible employees. Design Alloy Products, Inc. operates a metal scrap sorting and processing facility. In 2008, the company – under the project name Alton Park LLC – applied for and received a CRD allocation of $1.5 million.
By moving to the RC, these three businesses are breathing new life into abandoned or underutilized brownfield sites and creating job opportunities for RC residents.