Council advances plans for $109 million FedEx warehouse and distribution center in Cedar Rapids

CEDAR RAPIDS — The Cedar Rapids City Council on Tuesday approved the city’s standard tax incentives for FedEx to locate a massive $108.6 million warehouse and distribution center in the rapidly growing southwest quadrant that will create 434 mostly part-time jobs — offering an estimated $6.1 million tax rebate over 10 years.

The council approved a term sheet outlining the scope of the project and tax reimbursements on the proposal for an approximately 479,000-square-foot warehouse, which Indianapolis-based developer Scannell Properties would build at 1035 Commerce Park Drive SW. Construction is anticipated to start by Aug. 1 and end by Sept. 30, 2022.

This project is “another huge investment in our community by a well-known company,” Mayor Brad Hart said. “We have to keep growing our workforce.”

City Economic Development Analyst Caleb Mason said the development allows FedEx Ground Package System to expand its ground service network and its local footprint, as well as provide direct support to its hub in St. Paul, Minn.

Under the agreement, FedEx Ground Package System would create 359 part-time and 75 full-time new jobs with this 24-hour operation. Mason said the estimated budget for payroll to cover workers’ salaries is about $20 million.

Under the city’s standard incentives, the company will receive a 10-year, 50 percent reimbursement of increased taxes. Based on the size of the investment, city officials estimate this will generate $16.3 million in total taxes over 10 years, of which $6.1 million will be rebated.

Cedar Rapids has agreed under this deal to make off-site improvements to the roads surrounding the development and seek cooperation from the company with applying for state Revitalize Iowa Sound Economy grant funding.

A development agreement finalizing project terms may come to the council in August, Mason said.

Council member Ann Poe, chair of the council’s Development Committee, thanked FedEx Ground Package Systems for its confidence in Cedar Rapids.

“This is quite a facility and certainly $20 million in payroll that goes back into our community, I’m excited about that, but what a great facility,” Poe said.

The ability for the city and its Economic Development team to get FedEx to locate here and use its standard incentives is a testament to the results city staff can bring, said council member Scott Overland, chair of the council’s Finance and Administrative Services Committee.

“This is a new chapter of growth in the commercial and logistics area in Cedar Rapids business,” Overland said. “And as time goes on, I expect further logistics-type businesses to be attracted to Cedar Rapids and our location with our high-quality airport as well as our rail and highway system.”

Council member Ashley Vanorny — who represents District 5, where the FedEx warehouse will be located — said she sees Cedar Rapids becoming a distribution hub with the surrounding transportation network in the southwest quadrant, where The Eastern Iowa Airport is located.

“I think it's great that knowing that we've got such a net positive of all these new jobs coming to Cedar Rapids that weren't here before in an expanding district, let alone with livable wages that come with benefits, whether it works better for somebody to be part time or full time is something that we can really celebrate and be proud of,” Vanorny said.

Comments: (319) 398-8494; marissa.payne@thegazette.com