FedEx Ground to deliver 1,000 jobs, traffic to Lehigh Valley, Pennsylvania?

Massive distribution centers on Lehigh Valley International Airport (KABE) land could employ more than 1,000 people, but hurdles must be cleared.

FedEx Ground is considering the Lehigh Valley for a massive distribution hub that could create more than 1,000 jobs and make the region a more attractive landing spot for big retail stores.

According to sources with knowledge of the plan, FedEx is in talks with the Rockefeller Group to locate two distribution centers measuring 1 million square feet each on a 254-acre parcel of Allen Township farmland owned by the Lehigh Valley International Airport.

The centers, to be a FedEx hub serving the northeastern region, would open as early as 2015 with as many as 500 drivers, warehouse workers and office staff. That number could grow to more than 1,000 within three years, according to several sources.

It would also require major roadwork, including the widening of more than a mile of Race Street and Willowbrook Road, from two lanes to four, to handle more than 14,000 additional vehicles a day.

Officials from LVIA and FedEx would not comment on the global freight giant's involvement, but airport officials cautioned that whoever develops the surplus airport property will have to clear many hurdles. Because the property is federally encumbered airport land, developers not only need approvals from Allen Township, they'll also need Federal Aviation Administration approvals and cooperation from the state Department of Transportation.

All that would take at least two years, airport officials have said. In preliminary plans delivered to Allen Township, Rockefeller does not identify FedEx Ground, but projects opening what it calls a 1 million square-foot "Regional Distribution Center" in 2015, and a second warehouse of 1 million square feet in 2017.

"We don't know all the potential users Rockefeller is talking to and we're not at liberty to discuss any of them," Lehigh-Northampton Airport Authority Chairman Tony Iannelli said. "The good news is we're finding there is a tremendous amount of interest in our real estate holdings. The challenge is matching that interest with property that can be readily developed."

While FedEx Ground is a much coveted user because of its ability to attract other companies looking to reduce their shipping costs by locating nearby, the Lehigh Valley has become one of the nation's most sought-after areas for distribution center development. With its location in the Route 22 and Interstate 78 corridor, it's a prime location to serve a five-state shipping region.

FedEx has a much smaller Express shipping center in Bethlehem Township, one of hundreds of such facilities nationwide where locals can drop off packages.

The FedEx Ground hub would be one of just 33 regional shipping hubs capable of serving several states.

FedEx Ground, based outside Pittsburgh, is a subsidiary of FedEx created to serve major retailers that want to get merchandise to customers in five days or less. Trucking 5.6 million packages per day from its regional hubs and pickup stations nationwide, it is designed to be direct competition for UPS Ground.

FedEx would not confirm its interest in the Lehigh Valley.

"FedEx Ground continuously evaluates opportunities that can enhance our ability to serve our customers," company spokesman David Westrick said. "But, as a matter of policy, we don't have further information on specific proposals under consideration."

Rockefeller spokesman Dwayne Doherty said the company does not discuss which companies are interested in its projects, but is optimistic with the progress it is making on the airport land.

LVIA, struggling to pay the remaining $14 million of a $26 million court judgment against it for taking a developer's land in the mid-1990s, has brought in Rockefeller to market more than 750 acres of largely farmland that straddles Lehigh and Northampton counties, just north of the main airport.

Because the land spans two counties and the townships of Hanover, East Allen and Allen, Rockefeller will need township planning approvals, even as the airport seeks FAA approval to sell. On top of that, local officials will be working to find what could be millions of dollars to make improvements to Airport Road, Race Street and Willowbrook Road.

"Rockefeller is talking about attracting significant companies that would create significant jobs, but for any of it to happen — at least on that property — it's going to require major road improvements," said Don Cunningham, president and CEO of the Lehigh Valley Economic Development Corp., which helps bring new businesses into the region. "It's a heavy lift, but we're working on it."

Though sources did not detail precisely where the FedEx Ground facility would be, during a project scope meeting that involved township, airport, Rockefeller and PennDOT officials, Rockefeller laid out conceptual plans to place the hub along Willowbrook Road, just north of its intersection with Race. Willowbrook Road is a sleepy, two-lane stretch bracketed by airport property that has most recently been used for farming.

That would change if the hub opens. Willowbrook Road, which leads to Catasauqua High School, would have to be widened to four lanes to accommodate increased truck traffic. The plan will likely make for some heated township meetings, but 20-year Allen Township Manager Ilene Eckhart said township leaders have been expecting this for a long time.

"We always recognized that this was airport property, that it was going to be open for growth," Eckhart said. "That's part of the reason we changed the zoning to industrial in 2006. Yes, it's a big change, but we're a growing community."

Eckhart said she expects plans to come before the township board in the coming month, but nothing has been scheduled.

According to sources, FedEx is just the most immediate of several suitors interested in parts of the airport lands. The land is not only in a prime location capable of serving the Northeast, but it's also 750 undeveloped acres in the middle of a market that has few industrial and distribution center vacancies.

Just 6 percent of the Valley's class A industrial space is vacant — the lowest of any region in the state — with companies so eager to build more that they are doing it even before they have tenants, said Bill Wolf, vice president of CBRE, one of the nation's largest real estate brokers.

That low vacancy rate comes largely because developers are having trouble keeping up with bulging demand, growing the Valley industrial market space from 24 million square feet to 40 million in the past decade.

"The Lehigh Valley is now looked at as one of the top 10 industrial markets in North America," Wolf said. "The Lehigh Valley is viewed almost as an extension of the New York metro market."

Still, winning FedEx Ground won't be easy. Even if planners and developers can clear the many hurdles, sources say FedEx will likely also be shopping the project to locations in New Jersey, Maryland and other parts of Pennsylvania.

"There's a unique window of opportunity here that makes that airport property very important to the whole region," Cunningham said. "We've got some serious work ahead, but the payoff is worth it."

Source: http://www.mcall.com