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March 22, 2016 11:00 AM, EDT
$30 Million FedEx Distribution Center to Open in Chattanooga
TT File Photo

A new $30 million FedEx Ground distribution center in Chattanooga, Tennessee, being built off Interstate 75 will open in August 2017, officials said March 21.

FedEx Ground, the small package delivery unit of the Memphis-based shipping giant, has entered into a lease agreement for the 235,000-square-foot center at Exit 9 at I-75 and Apison Pike, said company spokeswoman Meredith Heighington Miller.

Dirt work is underway at the site directly across from Enterprise South industrial park. The massive industrial park holds the VW auto assembly plant and Amazon's large distribution center.

Miller said exact staffing needs have yet to be determined for the FedEx facility, but it will employ a mix of full- and part-time employees.

"We will add to the workforce as necessary to support increased demand for service in the area," Miller said.

James Saad of Mobile, Ala.-based builder Saad Development Corp. said the facility's approximately $30 million price tag includes about $2.5 million in public utility and road improvements.

The 80-acre vacant tract will have about 20 acres remaining for development at the front of the site when the distribution center is complete, he said.

FedEx isn't expected to seek property tax incentives for the project, according to the Chattanooga Area Chamber of Commerce.

The company already operates a FedEx Ground distribution facility in Chattanooga that it built in 2008 off Alton Park Boulevard. That $15 million, 163,000-square-foot facility is located on a former Wheland Foundry site. That facility is expected to remain open, the Chamber said.

The Times Free Press reported last year that a tract within Enterprise South was considered for the new FedEx facility. That location off Hickory Valley Road was considered too small and much of it is wetlands, according to state documents.

Another alternative considered and dismissed was on Old Lee Highway two miles from I-75 in Ooltewah, but there were environmental and utility service concerns, documents said.

FedEx said the Apison Pike site was chosen because of its ease of access to major highways, proximity to customers' distribution centers and availability to the area's workforce.

"The new facility is part of a nationwide network expansion to boost daily package volume capacity and further enhance the speed and service capabilities of the FedEx Ground network," Miller said.

Since 2005, the company has opened 11 new hubs featuring advanced material-handling systems and it has expanded or relocated more than 500 local facilities.

Apison Pike is undergoing a $22.5 million widening to Ooltewah-Ringgold Road that's seen as key for McKee Foods Corp. and easing Collegedale area traffic tie-ups.

FedEx also has a location at the Chattanooga Metropolitan Airport, where Lovell Field officials spent $2.3 million to expand a cargo ramp on the south end of its main runway to accommodate the company. FedEx went from servicing the airport with two smaller planes to a Boeing 727 at the time.

FedEx ranks No. 2 on the Transport Topics Top 100 list of the largest U.S. and Canadian for-hire companies.