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UPS plans $10 million upgrade on northwest side

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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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  • 2.75%
    I don't see UPS bailing on such a project if they don't get a tax abatement that is less than the 3% of the project's cost. Wonder if there is already a precedent for this type of request to the Metropolitan Develop Commission. Seems tantamount to blackmail - give us this tax abatement or we'll close up shop.
  • hooray!
    oh goody more corporate welfare for EVERYBODY!!!

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  1. How can any company that has the cash and other assets be allowed to simply foreclose and not pay the debt? Simon, pay the debt and sell the property yourself. Don't just stiff the bank with the loan and require them to find a buyer.

  2. If you only knew....

  3. The proposal is structured in such a way that a private company (who has competitors in the marketplace) has struck a deal to get "financing" through utility ratepayers via IPL. Competitors to BlueIndy are at disadvantage now. The story isn't "how green can we be" but how creative "financing" through captive ratepayers benefits a company whose proposal should sink or float in the competitive marketplace without customer funding. If it was a great idea there would be financing available. IBJ needs to be doing a story on the utility ratemaking piece of this (which is pretty complicated) but instead it suggests that folks are whining about paying for being green.

  4. The facts contained in your post make your position so much more credible than those based on sheer emotion. Thanks for enlightening us.

  5. Please consider a couple of economic realities: First, retail is more consolidated now than it was when malls like this were built. There used to be many department stores. Now, in essence, there is one--Macy's. Right off, you've eliminated the need for multiple anchor stores in malls. And in-line retailers have consolidated or folded or have stopped building new stores because so much of their business is now online. The Limited, for example, Next, malls are closing all over the country, even some of the former gems are now derelict.Times change. And finally, as the income level of any particular area declines, so do the retail offerings. Sad, but true.

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