UPS to Get $27 Million in Incentives for New Atlanta Hub
Shipping giant UPS Inc. could receive an incentive package totaling more than $27 million for a new regional distribution hub near Fulton County Airport that will create mostly part-time jobs, according to an analysis by The Atlanta Journal-Constitution.
The Sandy Springs, Georgia-based company made a splash when it announced the $400 million project, which will become its third-largest distribution hub in the United States. UPS said it will create 1,250 jobs when the project fully opens in time for the 2018 holiday season, with 250 full-time positions.
Economic development officials and elected leaders say incentives often are a necessary part of winning corporate recruitment battles, but critics deride such perks as corporate welfare.
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On Nov. 17, the board of Invest Atlanta approved the biggest piece of the incentive package, a 10-year tax break totaling nearly $22 million. But it didn’t come without some consternation.
UPS ranks No. 1 on the Transport Topics Top 100 list of the largest U.S. and Canadian for-hire carriers.
Board member Julian Bene, often the lone dissenting voice on the development agency’s board, said he supported the project, but he was bothered such a large incentive in exchange for mostly part-time positions that he described as “not great jobs.”
Many of the part-timers will work irregular hours for low pay, he said, adding that UPS should rethink its practice of depending so heavily on part-timers.
“Responsible employers need to work it through to ensure they are proving a living wage,” Bene said.
A $1.5 million state grant and tax breaks to encourage the creation of new full-time jobs could push the incentive figure to a total of more than $27.8 million, if UPS creates the 250 full-time jobs. The property is in an Opportunity Zone near the airport, and companies that create new jobs there can claim a $3,500 per job tax credit for five years if they meet certain benchmarks.
But the incentive figure could go higher. Invest Atlanta CEO Eloisa Klementich said the city also is in discussions with the company about an Economic Opportunity Fund grant, but she declined to disclose the potential value of the award.
According to documents provided by Invest Atlanta, the full-time positions will pay $64,000 on average. UPS spokeswoman Susan Rosenberg said part-time work will be based on union pay scales and vary greatly depending on role, but the median average is about $12 per hour.
Rosenberg said UPS has a corporate culture of promoting from within, and many part-time workers obtain full-time positions and work their way up the ranks.
“I would say look at UPS policy and practice, from our current CEO, who himself started as a seasonal loader, to looking at the president of our East Region for small packages across the U.S.,” she said. “He started out in Georgia working part time.”
Rosenberg said UPS considered other Southeastern states for the facility. Incentives played a role in the company’s decision, but so did location, workforce availability and other factors.
“UPS doesn’t ask for special incentive programs, but we are certainly going to avail ourselves of what is available in the area,” she said.
Klementich said the UPS project is part of a plan to provide a pipeline of jobs for various skill levels.
Invest Atlanta board member Andre Dickens, who is also a City Council member, said the city has been successful wooing high-paying tech jobs, but the UPS jobs also are needed.
