FedEx may be coming to Nashville

Monday, November 19, 2007 at 1:20am

Memphis-based Federal Express could be landing in Nashville with a substantial investment.

Sources have said the company is looking at building a back-up processing center near the Nashville airport. They say the center would be about 500,000 square feet and mean a major capital investment.

The city’s economic development officials at both the Nashville Area Chamber of Commerce and in Metro government had no comment.

This deal could give Mayor Karl Dean an early economic development victory and be just the beginning as other deals floating around land, one of those being Oreck Corp.’s headquarters.

New Orleans-based Oreck has been rumored to be moving its headquarters here for the past two years, especially last year when it opened a manufacturing operation in Cookeville and established sales and marketing in downtown Nashville.

Oreck’s Long Beach, Miss., operations reopened after Hurricane Katrina but the company faced high insurance costs and couldn’t get coverage in some instances.

While Oreck has insisted its headquarters wouldn’t be moving, the signs show another direction. This summer, Tom Oreck, president and chief executive officer and son of the founder David Oreck, this summer bought the Minnie Pearl mansion on Curtiswood Lane next to the Governor’s Mansion for $4.6 million.

Oreck’s purchase was downplayed as a signal of a headquarters move. But real estate sources say Oreck has been looking at office locations near the airport and in Brentwood.

Meanwhile, FedEx could land soon. The company’s back-up center won’t mean a tremendous number of jobs, possibly 100 or so. But the jobs for these centers pay above average median income in the range of $70,000-$80,000 a year.

Though not a big job generator, the FedEx deal would mean a substantial capital investment that possibly reaches into the hundreds of millions of dollars.

An architect familiar with such projects said processing centers are among the most expensive buildings to construct, saying the cost runs $900-$1,200 per square foot to build.

Total cost depends on what goes in the building. Back-up generators alone, for example, can cost $1 million a piece.

Apparently, one source said FedEx has already started to price equipment locally and the center would have 30-40 such generators. Then there’s a bevy of redundancy built in that drives up the cost.

Such buildings are nice for a city because they generate above-average personal property tax revenue. A former official with Mayor Bill Purcell pointed to the Bank of New York’s back-up processing center, which opened two years ago in Nashville.

“That’s a cash cow for the city,” the former official said of the taxes collected on the equipment in the building.

Filed under: City Business

7 Comments on this post:

By: idgaf on 12/31/69 at 6:00

Property taxes pay the bills not one time sales taxes. If they give them away we will have another freeloader on our hands.The use of the term "personal property taxes" lead me to believe that they are looking for house prices to increase which isn't going to happen long term with all the freeloaders and our escalateing crime/homicide rate and our poor schools.Face it due to our previous administrations we are on a downhill slide destined to become the Detroit of the South if someone don't put the brakes on and reverse direction.

By: TITAN1 on 12/31/69 at 6:00

I knew I would find id's whine here, too.

By: nashbeck on 12/31/69 at 6:00

I really hope FedEx moves some of its operations to Nashville! That would be great for our city.

By: Socrates on 12/31/69 at 6:00

Get 'r done!

By: evilj on 12/31/69 at 6:00

Id the tax he is referring to is an annual use tax. My company has to pay use taxes each year on all the physical assets we own. I think it's BS, but it does generate a huge amount of revenue for the general metro coffers.

By: MJB on 12/31/69 at 6:00

Why are processing centers so expensive to build? Nashville should give up nothing in property taxes.

By: michaels on 7/29/09 at 6:26

It would really be great if fed-ex services will be available in Nashville. Fed-ex services are great and so many moving companies like Dallas Movers are trying to render better services.