Within sight of the Scheels superstore being built a mile away, FedEx Ground officials kicked off construction Thursday on a five-acre building at the corner of Gable and Hesper roads.
The future distribution hub for Montana will sit on the northeast corner of a 50-acre building site that earth-movers have scraped clean of farm greenery over the past two weeks.
FedEx Ground is handling twice as many packages as it did a decade ago, and the new 146,000-square-foot facility that is a prototype for the country will be about twice as large as the Lockwood hub built in 1999.
“We’re seeing a lot of growth in rural areas through e-commerce. Instead of driving all the way to the stores, people order online,” said Pat McCoy, managing director of the Western Rockies district.
The distribution center at 2575 N. Frontage Road employs 120 people. The West End plant will have more than 130, McCoy said.
About 50 people attended the groundbreaking on the site that spans 97 acres, including parking.
Billings is FedEx Ground’s only Montana hub, where smaller packages are sorted. Local stations in Kalispell, Butte, Helena, Glasgow, Great Falls, Bozeman and Missoula collect and deliver the freight.
The company will open a new building in Butte on Aug. 20 and is expanding in Missoula.
“When construction on the (Billings) FedEx Ground building is complete, the wages paid will benefit the entire area,” said Montana Lt. Gov. John Walsh.
Walsh also announced that Gov. Steve Bullock recently hired Liz Ching of Billings, a longtime aide to U.S. Sen. Max Baucus, as an economic development specialist to help make Billings the business center of the region. Baucus is not seeking re-election.
There was no formal mention of a winter spat with commercial neighbors, including some in the TransTech Center, who filed protests over FedEx truck traffic and other issues. Over several months, they worked out their differences with developer SunCap Property Group. In March, the Billings City Council voted unanimously to annex the land and approved the zoning change for the $38 million project.
“It’s going to have minimal impact,” McCoy said.
FedEx Billings manager Mark Hammatt said the new facility will sort packages automatically by ZIP code, not manually like at the Lockwood plant.
“We can currently do about 5,000 packages an hour and it will go up to 7,500 per hour,” Hammatt said.
Florida-based Zirkelbach Construction is the general contractor.
Dan Kendzior, who lives on a ranch near Roberts and is developing the Montana region for Zirkelbach, said the company will hire up to 50 construction workers at the project's peak. All but two of a dozen subcontractors are local companies.
“Billings is growing leaps and bounds,” Kendzior said. “We’re going full bore up here in Montana, North Dakota and South Dakota.”
In addition to the hub building, Zirkelbach will build three other buildings for FedEx Ground, including a service facility and a guard shack. The facility will be completed in mid-September 2014, just a week after Scheels opens its superstore at Shiloh Crossing.