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Investment fund buys TruServ center for $26.5 million

August 19, 2003|by JULIE E. GREENE

julieg@herald-mail.com

A Boston-based real estate investment fund bought the former TruServ distribution center at Hunters Green Parkway in July for $26.5 million and is seeking a tenant or tenants, officials said Monday.

"We are currently talking with several potential tenants," said Jim Kelleher, New Boston Fund's director of acquisitions.

New Boston Fund develops real estate and buys leased or vacant apartment, office and warehouse/distribution buildings, Kelleher said.

New Boston Fund officials like the former TruServ distribution center's location near the Interstate 81/Interstate 70 interchange and the fact that it's a state-of-the-art distribution building, Kelleher said.

The 824,298-square-foot building easily could be divided into two spaces or expanded, he said.

TruServ officials opened the distribution center at 16500 Hunters Green Parkway in late 1998 and said in December 2001 the center would close to reduce duplication in the face of increased competition.

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The distribution center had 295 workers in early 2002, but had only one or two there this week, TruServ spokeswoman Shelley Hughes said.

New Boston Fund closed the deal on July 17 so the company does not have to pay Washington County's new transfer tax, Kelleher said.

The county transfer tax, which kicked in on Aug. 7, would have been $132,250, said Rick Hemphill, chief deputy clerk of Washington County Circuit Court.

Maryland Department of Assessments and Taxation records online show the 70-acre lot and building were transferred to New Boston Fund on July 18.

It was unclear how much the company would pay in a state recordation tax, Hemphill said.

The state transfer tax is $132,500, he said.

The distribution center was in an enterprise zone that expired on Dec. 15, 2001, said Cassandra Latimer, marketing specialist for the Hagerstown-Washington County Economic Development Commission.

While the enterprise zone expired, the 10-year enterprise zone certificate TruServ had on the building was transferable to New Boston, so the company will get a break on its county real estate property tax, Latimer said.

This fiscal year, the county tax credit amounted to $243,363, Washington County Treasurer Todd Hershey said. Without the credit, the county tax would have been $322,764.

The building just began its fourth year of the 10-year tax credit, Latimer said.

The tax credit on the building portion of the property assessment is 80 percent for the first five years, Latimer said. It decreases in increments of 10 each following year so the owner gets a 30 percent tax credit in the final year, she said.

The total tax credit on the building for four years has been $1,003,118, according to county tax records.

The state real estate property tax on the property this fiscal year was $44,942, Hershey said.

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