HAMBURG, N.Y. - The Hamburg Industrial Development Agency granted a six-month extension in sales tax exemptions this week for FedEx, which will already receive more than $8 million in total incentives for their new ground transport facility on Lakeshore Road near Route 5.
Michael Bartlett, the agency's executive director, said the company had requested an extension through December, but the IDA board voted Tuesday night to extend the tax exemption through March 2017 as a precaution. The sales tax exemption covers the cost of machinery and equipment for FedEx.
The facility already began operating in late July with more than 200 employees, a FedEx spokesperson said, but the company could potentially hire more people if demand increases. According to a project analysis document, the company had anticipated employing 209 workers directly at the Hamburg facility, but only 32 of these jobs would be considered "new" or "created." The company estimated the other 177 employees would simply be retained from the Western New York area.
The FedEx Ground facility, which spans more than 300,000 square feet on part of the former Bethlehem Steel Corporation property, is considered the largest construction project ever attempted in Hamburg since the McKinley Mall opened in 1985. Jones Development Co. of Kansas City, Mo., owns the property and leases it to FedEx, which had previously considered locating the facility in Pennsylvania before settling on Hamburg.
According to the FedEx analysis document, the $52.4 million project will cost the state and region $8.1 million in mortgage tax revenue, property tax revenue and sales tax revenue.
However, although the project has only created an estimated 32 jobs, it also created more than 300 temporary construction jobs. FedEx Ground also contracts with outside services for pickup, delivery and transportation, which adds additional jobs to the region.
"At the new station, 30 service providers employ about 175 people. The site was chosen because of its ease of access to major highways, proximity to customers' distribution centers and a strong local community workforce for recruiting employees," FedEx spokesperson David Westrick said.
The Cost/Benefit Analysis document produced by FedEx also indicates the project will still provide millions of dollars in tax revenue for the state and region.
The average salary for workers directly employed at the new facility was expected to hover just more than $45,000.