Four hundred or more jobs will be created at the FedEx Ground Transport in Hamburg, proclaimed elected officials, from the town supervisor to a U.S. senator.
But that’s not what FedEx told the town when it applied for $8 million in tax breaks.
The shipping giant, which is building a $54 million plant off Route 5 in Hamburg, projected only 32½ jobs would be created by 2020. Outside contractors might employ another 175, a FedEx spokesman said in an email Thursday, but he did not say if they would be full-time or part-time.
“I am not so sure it was ever documented at 400 to 600,” said Michael Bartlett, executive director of the Hamburg Industrial Development Agency, which granted the incentives on the $54 million project.
The 400 to 600 number of jobs has been in the public realm for months. Sen. Charles E. Schumer said in a press release Sept. 11, 2014, that the project “could potentially turn into a major distribution center and a location for up to 400 new jobs.”
Hamburg Supervisor Steven Walters, who is chairman of the town IDA, told reporters, including The Buffalo News, within the last two weeks that the project “will create 400 to 600 jobs.” He did not return a phone call Thursday.
Bartlett said he doesn’t know where the “400-to-600” job range came from and that he may even have used it himself. He said the 121 jobs projected at the finished center include existing and new jobs, but do not include drivers, who he said are contract workers. He said he does not know how many drivers will be hired.
FedEx spokesman David Westrick said FedEx Ground contracts with service providers for all pickup, delivery and transportation services, and those businesses are responsible for hiring their own employees as drivers, managers and other staff.
“When the Hamburg facility opens, we estimate that about 30 contracted service providers will operate out of the station and could potentially employ up to 175 people,” he said.
It’s not known how many of those contracted service providers already are under contract with the company, and how many are full-time. If all of them were new full-time contract workers, there would be the equivalent of 237½ FedEx and contracted jobs created at the project.
Whatever the number, it is better than no jobs, Bartlett said.
He said the company’s site selector told him the firm was looking at a site in Erie, Pa., for the center, although Western New York was its first choice. But FedEx said on its application it had not been offered financial assistance to locate outside New York State.
“Were they playing a game? I don’t know,” Bartlett said, and he added, “I wouldn’t want to be the one to blink and have the project go to Erie, Pa.”
The Hamburg IDA came under fire from State Sen. Marc C. Panepinto, D-Buffalo, two weeks ago because he alleged FedEx was not hiring enough local construction workers. Panepinto, who was elected with union support, also criticized the IDA for not being transparent in releasing information about the incentives, although the IDA did give Panepinto the documents last week.
And now the state senator is criticizing the IDA for giving millions in tax breaks for fewer than expected jobs. He suggested the IDA retroactively seek contract amendments for a local hire requirement and the return of incentives if the job projection is not met.
“I think it’s poor economic development to spend $8 million on a multibillion company to get a $1 million return,” he said.
The FedEx application for tax incentives states there are 88½ full-time equivalent jobs at the FedEx center on Walden Avenue in Cheektowaga, which could not be expanded. After the completion of the project, the company projected it will have 121 full-time equivalent positions, which includes 43 full-time and 156 part-time, in Hamburg.
There would be 88½ jobs retained, and a net increase of 32½ full-time equivalent jobs listed on the form signed Sept. 3, 2014.
Incentives include breaks on sales, mortgage and property taxes. The project will bring in an estimated $9 million in revenue to the town, county, state and Frontier Central School District over the next 10 years through a payment in lieu of taxes, sales tax on items employees buy and state income tax generated by employees, Bartlett said.
“You’ve got to compare that number with zero,” he said of the property tax break, “because that’s what that property was paying with no activity going on.”
The project also includes the construction of a $2 million road, which will be a public road going through the property, opening up the rest of the property for development, he said.
Bartlett also said since the FedEx deal has been approved and under construction, the IDA has been contacted by other companies interested in building in the Lake Erie Commerce Park.
Jason Kaplan, a spokesman for Schumer, on Thursday said, “Sen. Schumer’s highest priority is to help create and maintain good-paying jobs in Western New York and across the state. When opportunities arise to help bring jobs to the area, Sen. Schumer works with local leaders to do everything in his power to help.”