The Free Press, Mankato, MN

Business

February 10, 2014

City OKs land sale for Fed Ex expansion

East-side distribution facility could eventually employ more than 120

MANKATO — Mankato city leaders approved the sale Monday night of industrial park land for construction of a $5 million to $8 million Fed Ex distribution center that will employ 50 people initially and possibly more than double that in coming years.

Fed Ex is currently leasing nearly 25,000 square feet in the former Kayot boat plant on Industrial Road. One of several tenants in that city-owned building, Fed Ex is increasingly cramped and nearing the end of its lease.

The new 91,000-square-foot facility will be located off of Power Drive in the city's Eastwood Energy Center on the far northeast side of Mankato and will give the company room to expand its delivery service.

"We estimate about 50 employees will be reporting to work at the site," said City Manager Pat Hentges. "... In future years, the facility has the capacity to have at least 120 workers working out of the site."

The City Council, acting as the Economic Development Authority, approved the sale of 14 acres to RDC National, Inc., which will construct and own the facility, leasing it to Fed Ex. The land was priced at $40,000 an acre, although RDC will have to pay for only 10 or 11 acres because the remainder cannot be paved or built upon because of underground natural gas easements.

While their will be administrative and management staff working out of the facility, most will be package handlers and drivers. Fed Ex wasn't required to provide detailed wage data for employees at the site because the project doesn't include tax breaks or other economic development incentives backed by taxpayers.

Councilor Jack Considine asked about wage scales for the workers, nonetheless, and a Fed Ex official provided information on the drivers, although not on the package handlers.

The drivers — actually contractors rather than company employees — typically gross more than $100,000 a year, the Fed Ex official said, but are responsible for financing and maintaining their own trucks.

"Net could be $70,000 to $80,000," he said. "But the drivers work hard. They put in a long day."

Community Development Director Paul Vogel said the company, if the sale can be finalized quickly, would like to begin construction as soon as spring arrives.

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