Federal Express preparing site for new L.A. distribution hub.

Federal Express Corp. has closed escrow on a site at Taylor Yard near downtown and is preparing it for a new $12 million distribution hub.

The new 119,000-square-foot facility will replace a 35,000-square-foot center nearby - on Cypress Avenue within blocks of Taylor Yard.

Between 225 and 275 couriers and other employees will work out of the new center. About 140 employees work at the current facility, which Federal Express has outgrown, said Jess Bunn, a spokesman for the Memphis, Tenn.-based delivery company.

The project is expected to be completed in the first half of 1998.

"We're shooting for sometime next spring - maybe sometime around April," Bunn said.

Bunn would not disclose the cost of the new facility, but a source close to the deal said Federal Express is spending $12 million to acquire the land and build the station.

The facility - known as a "city station" - will be used as a hub to which packages and letters will be delivered each morning from Los Angeles International Airport and then sent out to local businesses and homes.

In the evening, packages collected during the day will be taken from the hub to Burbank Airport to be flown out to other cities.

The new site is located in a state enterprise zone, meaning Federal Express for five years will be able to receive tax credits for hiring workers who live within the zone. The current facility is not within the zone.

L.A.'s Business Team, a section of Mayor Richard Riordan's office devoted to business attraction and retention, helped link up Federal Express with Union Pacific Railroad Co., which owns much of Taylor Yard.

"It means jobs, it means community jobs, it means the economy in Cypress Park is definitely bouncing back," said Alfonso Salazar, a Business Team member who worked on the deal. "It means the demand for land we've been talking about in Los Angeles is on the increase."

KABC-TV Channel 7, a unit of ABC Inc., is also in negotiations to move its television news studios and offices from ABC Television Center in Hollywood to a proposed 100,000-square-foot facility at Taylor Yard.

But that deal could be in trouble because KABC officials are concerned that trains passing through the yard would probably cause noise and vibrations that would disrupt taping at the studios.