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Railex on track for $106M Jacksonville project

Railex LLC is taking steps to develop a 250,000-square-foot cold-storage warehouse-distribution center in South Jacksonville that should employ 310 people in five years.

The Riverhead, N.Y.-based rail service negotiated $8.8 million in city and state incentives to develop the $105.7 million project along Philips Highway.

Railex serves food, beverage, pharmaceutical and manufacturing industries.

Florida East Coast Railway owns the property at 6140 Philips Highway. Almond Engineering is the agent. A city mobility fee calculation certificate approved Sept. 11 shows a fee of $86,930 for the project.

Plans show that undeveloped property along Philips Highway, an industrial and business corridor that stretches south of downtown to St. Augustine, is the site of the project.

The application states that Railex will develop the cold-storage warehouse on 17.85 acres of vacant land zoned for heavy industrial use.

A site plan shows the warehouse is designed for Hansen-Rice Inc., which is a national design-build general contracting firm based in Idaho.

The city approved the incentives in May. The state is reviewing its portion.

A project summary filed with the city says Railex proposes to buy an 18-acre trace of undeveloped rail-spur property along Philips Highway adjacent to the Florida East Coast Railway marshaling yard. Philips Highway is U.S. 1.

It’s a large project. Railex proposes to build a 225,000-square-foot multimodal center to warehouse and distribute refrigerated freight. It would be served by spur rail and support yard rail to handle 40-85 car unit trains within a 24-hour period.

It’s also a big investment. Railex expects a $105.7 million development cost comprising $2.3 million for land acquisition, $34.8 million in building construction, $1.7 million in manufacturing and packaging equipment, $6.2 million for warehouse equipment, racking and technology infrastructure, $700,000 in furniture and fixtures and $60 million for refrigerated rail cars and intermodal trailers.

And it pledges to generate a significant number of jobs at an average wage of $47,851.

Railex says it will create 200 jobs by the end of 2014 and another 15 during 2015; 35 in 2016; 30 in 2017; and the final 30, to reach the pledged 310 jobs, by the end of 2018. In return, the city and state promised almost $9 million in tax incentives.

Of the incentives, the city would pay $1.94 million, comprising $341,000 through the Qualified Target Industry Tax Refund program, with a brownfield bonus, along with $1.6 million for a REV grant, which is repaid from the increased taxes resulting from the increases in real and tangible property taxes resulting from the improvements.

The state would pay $6.83 million, comprising $1.36 million in QTI payments, $5 million in an Economic Development Transportation Fund grant and $465,000 in workforce assistance.

At a May 7 council Finance Committee meeting, Railex executive Paul Esposito said the company has looked at locations throughout Florida and Georgia, but that Jacksonville has “set itself apart as far as a logistics hub,” citing its port, rail and road infrastructure.

The facility will be the company’s fourth logistics center, joining those in Delano, Calif.; Wallula, Wash.; and Schenectady, N.Y.