Package Delivery and City Government and Economic Development Agencies and Economic Development Incentives and Tax Abatements and Shipping and Distribution centers and Government & Economic Development and Economic Development and Transportation, Distribution & Logistics and Distribution & Logistics

UPS plans $10 million upgrade on northwest side

June 5, 2012

United Parcel Service Inc. is planning a $10 million modernization project for a regional transportation hub in Indianapolis and is seeking tax incentives to help make it happen.

The shipping and logistics company said the project will ensure the viability of the West 81st Street facility on the northwest side of Indianapolis and allow it to retain 750 workers earning an average wage of $30.79 an hour. No additional jobs will be created by the project.

UPS is requesting a five-year tax abatement from the city that will save the company an estimated $276,404 to help offset the cost of the investment.

UPS said the cost per package handled at the facility is greater than similar operations in neighboring states and its needs the improvements to stay competitive.

“If this modernization were not undertaken, UPS would need to consider other locations or route packages through an alternative, more cost-effective hub,” states an analysis by the Department of Metropolitan Development staff, which recommends approval of the abatement.

The abatement request is to be heard Wednesday by the Metropolitan Development Commission.

The requested abatement amounts to a 64-percent property tax savings over five years. UPS would still pay $152,000 in taxes on the new logistics and distribution equipment during the abatement period.

After the tax abatement expires, UPS would pay an estimated additional $64,380 in personal property taxes annually related to the new equipment.

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