THE VIRGINIAN-PILOT
Copyright (c) 1995, Landmark Communications, Inc.
DATE: Thursday, March 16, 1995 TAG: 9503160379
SECTION: BUSINESS PAGE: D1 EDITION: FINAL
SOURCE: BY MYLENE MANGALINDAN, STAFF WRITER
DATELINE: NEWPORT NEWS LENGTH: Medium: 66 lines
Speaking earnestly before a crowd that included Virginia's governor, Mayor Barry DuVal expressed Wednesday what everyone was thinking: The timing couldn't be more perfect.
During a period of downsizing by Newport News Shipbuilding, its biggest employer, and the general environment of federal defense cutbacks, Newport News announced that a $14 million United Parcel Service customer service facility will open in June, creating 840 new jobs.
The Atlanta-based delivery service's decision to locate its first computerized package-tracking facility on the Peninsula marks the city's biggest economic prize in more than 10 years, DuVal said. Not since Canon opened its printer and copier manufacturing operation in 1987 has a company pledged an economic investment of this magnitude in Newport News.
Gov. George F. Allen, who flew in by helicopter for the presentation, credited the private-public partnership of the Virginia Peninsula Economic Development Council, and the city and state for landing the UPS facility that will be located at a vacant Kmart store site in the Warwick Village Shopping Center at 11008 Warwick Boulevard.
``That's the sort of creativity and innovation that's so great in Newport News,'' Allen said before a crowd of 50 that included Virginia Secretary of Commerce and Trade Robert T. Skunda and members of the Virginia delegation. ``This leadership always understood the importance of economic development.''
Allen, garbed in cowboy boots and a black suit, touted the location of the facility in Virginia as another accomplishment on his list of jobs created during his term. He had set 125,000 new jobs as a goal during his gubernatorial campaign.
By 1997, the UPS operation will employ up to 1,000 people. Employees will earn from $8.25 to $11.25 an hour.
Newport News offered UPS $1.7 million in financial incentives - including $750,000 in rent concessions over a 10-year period and $500,000 from the Governor's Opportunity Fund for site renovations - to land the facility.
Newport News beat out Chesapeake and locations in five other states, which the governor declined to name.
But it will cost the city.
Its Industrial Development Authority is chipping in $8.3 million to back the project, including buying the 150,000-square-foot building and leasing the 7.5-acre site to UPS for 10 years.
The city also plans to lease four acres of land behind the shopping center to build a 950-car parking lot, said Paul Miller, director of planning and development.
UPS will pay about $1.05 million in annual rent and has the option to sign a five-year lease after 10 years or purchase the building. If it decides not to lease the facility after its 10-year lease ends, it will pay the city $1 million, Miller said.
The prototype facility marks the beginning of the package delivery firm's consolidation of 65 local telephone centers across the country into a dozen large centers. The customer centers will handle telephone calls from the public about rates and package deliveries, spokesman Ken Sternad said.
UPS will hire an independent contractor to manage the facility.
``We're in the package delivery business and it's common practice to look at parts of your business you can `outsource,' or have other people run for you,'' Sternad said. by CNB