United Parcel Service plans to build a state-of-the-art distribution facility northeast of downtown Los Angeles, keeping 1,000 jobs and the taxes they represent for city coffers as well as providing an economic boost calculated at $70 million or more.
Los Angeles economic development officials on Tuesday hailed the announcement as a victory for the city, which has been battling with other local municipalities and with recruiters from other states to keep employers and jobs within city limits.
"We've made a commitment to UPS to make the project work from the city's perspective," said Rocky Delgadillo, a senior economic development official in Mayor Richard Riordan's office. The incentives to keep UPS in town are still being worked out, but will include traffic mitigation, street improvements, property alterations, fee breaks and assistance with obtaining permits.
Commerce and Montebello were also in the running for the facility, but it never became a formal bidding war, Delgadillo said.
"UPS was considering expanding outside of the city, but I believe UPS made its decision to stay in part because of the business-friendly service it received" from L.A.'s Business Team and Councilman Richard Alatorre, Riordan said. The Business Team is part of the Mayor's Office of Economic Development and helps businesses expand or locate within the city.
UPS will build a 400,000-square-foot facility to sort and distribute packages on 26 acres that the Atlanta-based company already owned but was planning to sell at Main and Lamar streets, across from the landmark San Antonio Winery in Lincoln Heights. The more than 1,000 employees who work at the company's aging facility at Soto and Washington streets will transfer to the new building. UPS expects to add to the work force there in the future. Completion is expected in 1998.
The Soto-Washington site is being sold to Dynamic Builders, a Los Angeles construction company that will also be building UPS' new facility. Dynamic Builders plans to construct a 600,000-square-foot industrial park on the old 22.5-acre site, "which will create a lot of permanent jobs," said Ramon Bonin, president of Dynamic Builders, a 32-year-old firm that designs and constructs industrial buildings.
UPS estimated a $70-million economic boost for the city, but the mayor's office placed the infusion at closer to $150 million, which would include the cost of building both facilities, equipment purchases, the potential for new jobs at both sites and the value of the construction jobs generated by the two projects.
"These days it's really hard to do anything in terms of a relocation without encouragement and help from city officials because there's a lot of red tape involved," said Candice Traeger, public affairs manager of the UPS Pacific region.