By Brenna R. Kelly
The Cincinnati Enquirer

It's official - a FedEx hub is coming to Boone County.

FedEx Ground officials confirmed Tuesday they will build a 335,500-square-foot hub near Union that will bring hundreds of jobs to the area.

The company, the country's second largest small-package ground carrier, was also considering sites in Butler County and Indianapolis.

The Boone County site, on 96 acres in the Enterprise V Industrial Park off Mount Zion Road, was chosen for its location near other distribution centers and Interstates 71, 75 and 275, the company said.

"This came up as the best site for our needs," said David Westrick, FedEx Ground spokesman. "We looked at a number of sites. When you added it all up this was the best place to go."

The hub will employ about 480 people when it opens in 2005. In about four years it could employ as many as 2,400 people, company officials said.

FedEx Ground, the land-based subsidiary of FedEx, plans to start construction on the $65 million facility next month.

"It's great news for Boone County and Northern Kentucky in a time when the economy hasn't been producing a lot of jobs," said county administrator Jim Parsons.

"It shows how competitive we are in Northern Kentucky," he said.

Boone County Judge-executive Gary Moore said he thinks the company chose Boone County for its central location. The area is a 24-hour drive from 70 percent of the nation's population, he said, has a low tax base, and "it's a great community."

FedEx bought land from Toebben Ltd., of Crescent Springs for $6.3 million, according to the deed recorded in the Boone County clerk's office. The sale closed Tuesday morning.

The facility will initially process about 22,500 packages an hour with the latest package-sorting technology. When it opens, there will be 80 office and clerical employees, 300 package handlers, and 100 independent contractors. When the hub reaches full capacity it will process up to 45,000 packages per hour with more than 235 office and clerical employees, 1,300 package handlers, and 400 independent contractors.

In May, the unemployment rate in Boone County was 4.4 percent, according to the Kentucky Cabinet for Workforce Development. In Northern Kentucky, the rate for May, the latest month available, was 4.5 percent.

Bill Young, director of the One Stop Career Alliance of Northern Kentucky, said it's too early to say how many job seekers may try for employment at the new FedEx hub. Young directs five unemployment offices serving eight Northern Kentucky counties, including Boone.

"There are a lot of unknowns, including what jobs we're talking about and what the pay scale is going to be,'' Young said Tuesday.

The Pittsburgh-based company has 43,000 employees and processes 2.1 million packages a day. The hub is the third of 10 that will be built in the next six years as part of a $1.8 billion expansion. The three other announced locations are in Dallas, Hagerstown, Md., and Memphis.

The expansion will nearly double the company's average daily capacity from 2.5 million to 4.8 million packages.

Hours after the announcement Tuesday, Boone County Fiscal Court approved a "payment in lieu of taxes" agreement for the company. Under the agreement, FedEx will have to pay only 40 percent of county and state property taxes. FedEx will still have to pay full taxes to local taxing districts.

The county gave similar incentives to Citigroup and the Toyota Distribution Center.

Because the company will still pay school taxes, it will help Boone County schools, Moore said.

In March, Boone County issued $65 million in industrial revenue bonds for the project. Last year, FedEx Ground received preliminary approval for $1.1 million in state tax incentives.

Officials at the Ohio Department of Development again Tuesday declined to release figures on the tax-incentive package the state offered FedEx, saying such information is considered proprietary, even though Kentucky released its tax-incentive figures for the project months ago.

Butler County officials expressed disappointment Tuesday that the hub went to Northern Kentucky. But they are happy that it at least is coming to the Tristate.

"Even though it's a loss for our immediate area, the game is to realize it's still business for the Greater Cincinnati area," said Kerry Murray, a vice president at the Southeastern Butler County Chamber of Commerce. "Because of this area and its positives, there will be more."

Jennifer Edwards contributed to this report. E-mail bkelly@enquirer.com