Originally created 01/16/04

Deal delivers FedEx

Augusta economic developers are close to cementing a deal with a unit of FedEx Corp. to build a warehouse and distribution center, beating out Aiken as a possible location for the $4 million facility.

FedEx Ground, a unit of the Fortune 500 company that provides ground delivery of small packages in North America, will initially employ as many as 70 workers when the 38,000-square-foot site - roughly two-thirds of a football field of space - opens in September.

Depending on business, FedEx Ground said, it could almost double the size and take on an additional 50 workers.

The company's developer, Baseline Developers of North Carolina, will start construction within 60 days on eight acres near the Pilot Travel Center on the north side of the intersection of Interstate 20 and River Watch Parkway.

"We hope this can be the start of a lot of new warehouse and distribution facilities for us," Walter Sprouse, the executive director of the Richmond County Development Authority, said at its monthly meeting Thursday.

The authority is responsible for creating and keeping existing jobs in the county by offering companies incentives such as tax breaks and worker-training programs. The incentives might have made the difference in a deal that Mr. Sprouse says took about a year to seal and was a "very competitive project."

Ralph Ronalter, a Baseline manager, said he was also looking at Aiken, near where his company built a similar distribution center in 2000 for FedEx Express, a sister FedEx company. That site is in the Summit Business Park.

As with its handful of other FedEx-related sites along the East Coast, Baseline buys and owns the properties and then leases them to the transportation and delivery giant. In this transaction, Baseline bought 15 acres from Robert Alexander, of Waynesboro, and will seek to somehow commercialize the remaining seven acres.

The competition between neighboring states and counties to attract industry and create jobs has been high during the economic downturn, especially in areas that have traditionally relied on manufacturing jobs, which have been lost to technological advances or movement overseas.

The tug of war between Georgia and South Carolina to win the hearts, minds and bank accounts of corporate executives is nothing new, except when Georgia wins. Economic developers in the state have long complained that neighbors such as South Carolina or Alabama have more carrots to dangle in front of prospects, promoting a legislative push to allow more flexibility by way of deeper tax cuts.

A high-profile example of this played out in 1997, when Bridgestone/Firestone opted to open its $435 million tire plant - the biggest area investment in a decade - in Aiken instead of Augusta because of a more attractive incentive package.

Richmond County developers offered FedEx Ground a mix of incentives besides lower taxes, including worker training programs at Augusta Technical College and the possibility of tapping grant money earmarked for development from OneGeorgia, funds gathered from the 1998 settlement tobacco companies made with most states. A request also has been put in with the state Department of Transportation for money to build an access road to the facility.

The big tax breaks would come if the authority's board members agree to print bonds for Baseline that would finance the project. They must first look over Baseline's books to see everything is in order.

Once the bonds are sold, Baseline would hand the property title to the authority, which would then technically lease it back. This amounts to no more than a paper shuffle, but it allows Baseline to pay significantly lower property taxes during the life span of the bonds - in this case 20 years.

Reach Matthew Mogul at (706) 823-3352 or matthew.mogul@augustachronicle.com.


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