Cabinet for Economic Development
GOVERNOR ERNIE FLETCHER ANNOUNCES MONUMENTAL EXPANSION OF UPS INTERNATIONAL HUB IN LOUISVILLE
FRANKFORT, Ky. – At a monumental event today in Louisville, Governor Ernie Fletcher and Economic Development Cabinet Secretary Gene Strong were joined by local and legislative leaders in Louisville today to announce that United Parcel Service (UPS) will expand its Worldport facility, creating 1,284 new full-time jobs and 3,787 new part-time jobs. The expansion represents a more than $1 billion investment in the commonwealth, making it the second largest single investment by UPS in Kentucky.
“This is a proud day for Kentucky and I want to be the first to say thank you to UPS for making Kentucky a shining star,” said Governor Fletcher. “The rippling effect UPS’s location and continued expansions have had on our great state is profound. The creation of more than 5,000 new full- and part-time jobs for Kentucky’s citizens and $1 billion investment is remarkable and provides for a marvelous future.”
The project would expand the company’s current activities of loading, unloading, sorting, and distributing of packages, increasing its sorting capacity and ability to handle more volume. Nearly 1,100,000 square-feet will be added to its existing facility, while another 334,500 square-foot space will be renovated with new technology and equipment. Additionally, several ramps at the Louisville International Airport will be built or altered bringing a total increase of just over 3,000,000 square-feet.
Construction is slated to begin in July of this year, with an anticipated completion date in September 2010.
“We view building our communities to be part of building our business,” said Bob Lekites, UPS’s Louisville-based vice president of airline and international operations. “Past public and private partnerships, as well as collaboration with local universities and minority-owned businesses, have been successful and we look forward to continuing that trend with this expansion. We’re extremely pleased with the support we've received from our government officials in the commonwealth through Governor Fletcher and the Cabinet for Economic Development and from Louisville Metro and Mayor Jerry Abramson as well. These investments will create a better Louisville, a better Kentucky and a better UPS.”
A special meeting by the Kentucky Economic Development Finance Authority (KEDFA) was held earlier this morning to consider an incentive package designed to land the massive project. KEDFA granted preliminary approval to UPS for tax benefits up to $31.6 million over ten years under the Kentucky Jobs Development Act (KJDA), an incentive program aimed at increasing technology- and service-related employment in the commonwealth.
It is also anticipated that UPS will qualify to receive up to $20 million in benefits over the next three years under the Kentucky Enterprise Initiative Act (KEIA). The program, created through Governor Fletcher’s tax modernization plan and passed by the 2005 General Assembly, allows approved companies making an investment of $500,000 or more in Kentucky to recoup Kentucky sales and use tax on the cost of construction materials, building fixtures and equipment used for research and development.
“We feel we put together a strong package that allowed us to give Kentucky a competitive advantage,” said Secretary Strong. “It is a powerful testament to Kentucky’s business climate, its workforce, and the cooperation among state and local leadership and the private sector when an internationally-renowned company places its confidence in your state over and over again. We truly have something extraordinary here in Kentucky because of UPS and we never take that for granted.”
An economic impact study, performed by the Cabinet for Economic Development’s Division of Research and Information Technology, shows the latest UPS expansion will have a tremendous effect on Kentucky’s economic pulse. The direct annual economic impact of new full- and part-time jobs alone will be approximately $344.8 million. Indirect and induced jobs will add just more than another $400 million, for a total annual economic impact of approximately $745 million.
Earlier studies have revealed UPS’s impact on Kentucky has been nothing short of staggering. With more than 22,300 current employees statewide and as Kentucky’s largest private employer, the presence of UPS has been a catalyst for luring more than 90 companies to either locate or expand their operations in the state over the past five years, investing more than $1.2 billion and bringing more than 13,300 new jobs.
“Louisville and Kentucky are flying high thanks to the incredible investment of UPS and, with this newest expansion, we’ll soar to even greater heights together,” Mayor Abramson said. “Our decision – now two decades ago – to expand Louisville International Airport continues to pay off for this community and Kentucky in continued economic development and job growth.”
“Today's announcement by UPS is fantastic news for the Louisville region and its economy,” said Joe Reagan, president and CEO of Greater Louisville Inc. - the Metro Chamber of Commerce. “This substantial investment will most certainly be one of the nation's largest and most significant capital investment projects of 2006. UPS’s continued investment in our community clearly demonstrates that this is a great place to do business and accelerates the Greater Louisville region's leadership as a world-class logistics center.”
Senate President David Williams (R-Burkesville) and House Speaker Pro Tempore Larry Clark (D-Louisville) also joined the governor and Louisville legislators to show their support for one of Kentucky’s finest corporate citizens, demonstrating that a win for Louisville is a win for all of Kentucky. Continued support by Sen. Williams and Rep. Clark for the Metropolitan College program, an innovative concept created in 1998, between state and local government and UPS, was a key component to ensuring the expansion.
“The expansion of UPS not only creates education and job opportunities for Kentuckians but also improves worldwide access to Kentucky products,” said Sen. Williams. “I know from my years in the Senate, the Metropolitan College has been and continues to be an important and integral part of UPS’s growth strategy in the Louisville area and one that has been a win-win endeavor for both UPS and the Commonwealth of Kentucky.”
“I am very excited and proud that UPS has designated Louisville for the expansion of their facility,” stated Rep. Clark. “The success of the Metropolitan College has played a significant role in UPS’s decision to expand. This expansion creates a wonderful partnership between the Metropolitan College, the Kentucky General Assembly and UPS. In short, education does pay.”
The program provides students working full- or part-time at the hub the opportunity for a free education at either the University of Louisville or Jefferson Community and Technical College. Some 10,000 students have passed through its doors since its inception. Approximately 1,400 students are currently enrolled and as many as 2,200 are expected to enroll by 2010 as a result of this latest expansion.
UPS is the world’s largest package delivery company and a global leader in supply chain services, offering an extensive range of options for synchronizing the movement of goods, information and funds. Headquartered in Atlanta, Ga., UPS serves more than 200 countries and territories worldwide and operates the largest franchise shipping chain, The UPS Store.