FedEx Plans 60,000-Square-Foot Ohio Distribution Center
The Allen County, Ohio, Port Authority has made a move it maintains will continue to make Lima an attractive place for FedEx Corp. to do business.
The port authority voted to authorize the issue and sell up to $10 million in bonds to fund the construction of a 60,000-square-foot distribution center on McClain Road in Shawnee Township, near Interstate 75. This follows approval in April of the sale of the 36-acre plot to Lexington, Kentucky-based Setzer Properties, a development firm working with FedEx.
The idea behind these bonds is that the port authority would retain ownership of the building and, as a public entity, not be subject to the 6.75% sales tax county shoppers pay.
“Setzer is going to buy the land,” port authority Executive Director Jerry Arkebauer said. “They will lease the land to the port authority, and the port authority will enter into a construction manager agreement under which Setzer will build the building. The port authority will own it and finance it by the issuance of bonds, and then we will lease the land and the building back to Setzer, who will sublease it to FedEx.”
Arkebauer said that many port authorities throughout the state have made similar agreements, saving the developer money in the building project. In this case, the savings are estimated to be $235,000, and because of those savings, the port authority also will receive a $40,000 closing fee from Setzer. If the savings exceed $235,000, the port authority also will receive 20% of the additional savings.
While the county will lose that tax revenue, Arkebauer said the county coffers will benefit in other ways.
“But it will retain and increase employment, and those employees will get paid and pay state income taxes, and they will use that check to go out and buy things, paying sales taxes that will stay in the county,” he said. “So, in the long term, local and state governments will not be hurt by this.”
Pending the completion of final arrangements between the developer and the Allen Economic Development Group, Arkebauer anticipates construction to begin in the spring, with the distribution center operating this year.
