Mankato's location at the nexus of three highways in southern Minnesota has won the city its third regional distribution center from a national company.
FedEx Corp.'s FedEx Ground division will build a 91,000-square-foot distribution center in Mankato at an estimated cost of $5 million to $8 million, not counting the land, city officials said Friday.
It will replace a smaller facility FedEx already operates in Mankato, be completed this year and initially employ about 50 people.
The city's position at the intersection of Hwy. 169, Hwy. 14 and Hwy. 60 helped attract big distribution operations from two other national retailers, Mankato officials said. Wal-Mart Stores Inc. is building a food distribution center in Mankato this year and True Value Hardware Co. already has a distribution center in the city.
A spokesman for FedEx Ground, based in Pittsburgh, declined to comment on the Mankato project. City officials said that they have been negotiating with Ruedebusch Development and Construction of Madison, Wis., which will build the facility, and with FedEx's site selection firm, Fischer and Co. of Pittsburgh.
The city plans to sell the distribution site, located on 14.4 acres of city-owned land, to Ruedebusch Construction for $576,000, or $40,000 an acre, said Paul Vogel, Mankato's director of community development. "They build facilities and lease them back to FedEx," Vogel said.
Ruedebusch and Fischer did not return phone calls Friday.
While FedEx and its developer have not disclosed the construction cost of the distribution center, Mankato officials estimate it will cost $5 million to $8 million, Vogel said.
The new FedEx Ground facility will replace an existing 14,000-square-foot center in Mankato that serves only central Minnesota, Vogel said. The bigger, regional distribution facility initially will employ 50 package handlers, drivers and managers. City officials were told that could eventually rise to 120, he said.
Two years ago, FedEx Ground built a 60,000-square-foot distribution center in Stewartville, Minn., which is south of Rochester and close to Interstate 90 and Hwys. 52 and 63. Before that, FedEx Air built a 100,000-square-foot distribution center in Rochester.