Construction of a new FedEx Ground distribution center began last week in Grimes, cementing the company’s plans to relocate its West Des Moines operations to the nearby suburb.

FedEx Ground officials say the distribution facility, one of only three in Iowa, will be located in the Princeton Development business park along the east side of Iowa Highway 141, north of 62nd Avenue. The Grimes City Council approved the building’s site plan during a meeting Oct. 8. City officials say Westmoreland Construction Co. has been contracted to complete the $4 million project in the spring of 2003.

David Westrick, a spokesman for FedEx Ground, said the center will become operational in July after custom machinery is installed. He added that the company’s 40 or more full-time and part-time employees, as well as its 30 delivery drivers, will transfer to the Grimes location. The center is expected to reach its employment capacity by 2006.

Westrick said the company had outgrown its West Des Moines facility on Fuller Road and needed more room for its expanding operation. He said the staff handles more than 20,000 packages a day, nearly three times as many as a few years ago.

The new center will contain nearly three times the 15,000 square feet found at the West Des Moines site. Westrick said the current staff will handle the workload for the time being, but projects that the company could hire as many as 31 additional workers.

“Business demand dictated that we move to a bigger space and that we might need to add more people,” Westrick said. FedEx Ground delivers packages in one to five business days.

The West Des Moines FedEx Ground center is one of 300 existing facilities being expanded or relocated around the country. Last month, FedEx Corp. announced it was launching a $1.8 billion, six-year expansion plan for its ground business, which will nearly double its daily package volume capacity from 2.5 million to 4.8 million by the end of fiscal 2009. The plan also calls for building 10 new and 23 expanded central distribution hubs.

The company’s Web site reports that FedEx Ground has grown 50 percent from three years ago to the fiscal quarter ending in August, an increase from 1.4 million to 2.1 million packages per day. FedEx Ground is North America’s second-largest small-package ground carrier. The company reported total revenues of $2.7 billion for fiscal 2002.

Westrick said Grimes’ location was a key factor in deciding to move to Grimes, citing easy access to Highway 141 for local delivery and Interstate Highways 35 and 80 for long-distance service.

“It’s centrally located in Iowa and we wanted our new facility to be near major highways,” Westrick said. “Our delivery contractors can go anywhere from there.”

FedEx Ground also has centers in Ottumwa and Cedar Rapids.

The Princeton Development business park, which includes nearly 120 acres of land, is a blossoming part of Grimes, according to Mayor Tom Armstrong. FedEx Ground will join other new businesses there, including the Des Moines Soccer Academy, T & T Sprinkler Service and a mini-storage facility.

“That corridor is uniquely poised for economic growth with its easy access to the highway,” Armstrong said.

He said having FedEx operate at that location should help the developers, Iowa Realty, as well as the city, recruit additional businesses to the area.

“FedEx should help with some economic growth in that location,” Armstrong said. “Having the FedEx name in town gives us significant exposure. It’s good for the city of Grimes.

“I realize it comes at the expense of West Des Moines, but it’s good for the Des Moines metro area as a whole to keep FedEx here locally, rather than have them leave Polk County as a whole.”

Kelley Brown, city administrator, said attracting a business the size of FedEx helps dispel the notion that Grimes is just a bedroom community. She said the town is home to nearly 7,000 people.

“We’ve been working toward being a more independent community, and having businesses like FedEx come to town makes it more likely that we can keep people at home,” Brown said.

“The perception is that Grimes is a long way away from Des Moines,” Armstrong said. “But we’re actually closer to it than Waukee.”

The city administrator said she hopes FedEx is the first of many new businesses to come to the Princeton Development area, and to the city’s other business parks.

“FedEx did its homework and found Grimes is a good place to do business,” she said. “Hopefully others will, too.”