United Parcel Service is considering a $106 million expansion of its ground hub in Lexington, according to the state.
The Kentucky Economic Development Finance Authority on Thursday approved up to $500,000 in tax incentives for construction materials and building fixtures.
KEDFA explained that the expansion would “increase the sorting capacity to 43,000 pieces per hour with the expansion of the building and additional sorting automation added.”
The company said that the expansion of the facility at 1800 Mercer Road “is necessary to maintain services for current and future growth of the Lexington area.”
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The project would include about $1.6 million for land, $37 million for building construction, $67 million for equipment and $825,000 for other start-up costs.
UPS district communications supervisor Nancy Barczak said Thursday that the project could begin in the next two months and is scheduled to be completed by the spring of 2019.
The hub will be expanded in phases, with UPS first putting up a new building next door, then moving into the new building while the existing 1985-era building is gutted. Modern equipment will be installed throughout, she said.
“It will just over double the size of that facility,” she said.
It’s unclear how many new jobs will be created by the expansion, Barczak said. “I’m sure there will be a few but don’t have an accurate number at this point.”
The project did not apply for tax incentives under the Kentucky Business Investment Program, which allows eligible companies that create at least 10 new full-time jobs for Kentucky residents to recoup additional money.
UPS, which is headquartered in Atlanta, is the largest package delivery company in the world. In October, KEDFA approved $1.75 million in tax incentives for a $309.8 million expansion in Louisville to triple sorting capacity of the ground hub there. That project will result in 300 new jobs.