FedEx plans $385M upgrade for Indy hub, seeks $29.2M tax break

Package delivery giant FedEx Corp. plans to invest a whopping $385 million for new equipment over several years at its Indianapolis sorting hub—a project for which it is requesting a $29.2 million tax break from the city of Indianapolis.

The investment would result in the creation of about 125 full-time jobs and 450 part-time positions, according to city filings.

FedEx would begin installing the equipment in 2018 and finish in 2026. The jobs would be created over that period of time. The project also would allow FedEx to retain 805 existing full-time jobs at its airport facility and 2,940 part-time positions.

The company has requested a 10-year tax abatement from Indianapolis based on the value of the equipment. Over 10 years, it would save about $29.2 million.

The Metropolitan Development Commission is expected to consider FedEx's request at its meeting Wednesday afternoon. The request will be introduced to the City-County Council on Monday evening.

FedEx’s Indianapolis package-handling facility, which opened in 1988, is the second largest of the company’s nine U.S. package-handling hubs. It occupies a 2.4 million-square-foot building at 6648 S. Perimeter Road, on property owned by the Indianapolis Airport Authority.

FedEx’s Indianapolis hub is currently capable of sorting 214,000 packages and documents per hour, according to the company’s most recent annual report with the U.S. Securities and Exchange Commission.

That puts the facility second only to its Memphis hub, with a capacity of 475,000 items per hour. FedEx’s third largest hub in terms of sorting capacity is Newark, New Jersey, which can handle up to 156,000 items per hour.

The new equipment is expected to increase the speed of sorting and the volume of packages that can be processed at the facility.

The new full-time jobs would pay an average wage of $17.44 per hour, and the new part-time positions would earn an average wage of $13.23 an hour.

Officials with Memphis-based FedEx did not immediately respond Monday afternoon to IBJ’s request for more information about the project.

Under the terms of the abatement, FedEx still would pay $19.6 million in personal property taxes related to the new equipment over 10 years. After the abatement expires, FedEx is expected to pay about $4.2 million in personal property taxes annually on the equipment.

Department of Metropolitan Development staff has recommended approval of the abatement request.

Please enable JavaScript to view this content.

Story Continues Below

Editor's note: You can comment on IBJ stories by signing in to your IBJ account. If you have not registered, please sign up for a free account now. Please note our updated comment policy that will govern how comments are moderated.