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Macy's distribution center a 'game changer'

Stephen Christian, executive director of the Berkeley County Development Authority, said the project could singlehandedly pull Berkeley County out of recession

December 18, 2010|By MATTHEW UMSTEAD | matthewu@herald-mail.com
  • Stephen Christian, executive director of the Berkeley County (W.Va.) Development Authority, said the announcement that Macy's Inc. plans to build a $150 million distribution center in the county is the biggest he has made in his 20-year career.
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MARTINSBURG, W.Va. — Project Olympus appears to be a fitting code name for the $150 million investment that Macy's announced last week it will make in Berkeley County.

Describing the project last week as a "game changer," Stephen Christian, executive director of the Berkeley County Development Authority, said the project could singlehandedly pull Berkeley County out of recession.

"It's not just the 1,200 new jobs. Everything from local retail sales, all the way up to the housing market should see the benefit of this project," Christian said in formally announcing that Macy's search for land to build a 1.3-million-square-foot distribution center had ended near Martinsburg.

The site in Cumbo Yard Industrial Park off W.Va. 9 near Exit 16 of Interstate 81 was selected by Macy's from more than 150 locations.

To be built on a site of more than 90 acres, the distribution center, expected to start operations in 2012, will help Macy's meet growing sales via its Web-based portal.

While dubbed Project Olympus to protect the Macy's search for land, Berkeley County officials received projections indicating the company would employ 1,256 people by 2014, including nearly 700 seasonal workers, according to information Christian released last week.

Total employment figures since have been revised upward to about 1,900, including about 700 seasonal workers.

The original projections indicated the annual salary was $23,920 for full-time workers and $11,960 for permanent part-time workers. Full-time seasonal workers would make $3,680 and part-time seasonal workers were to earn about half that amount.

People hired to fill 63 management positions by 2014 would be paid between $55,000 and $175,000, according to the preliminary information.

The total payroll is projected to eventually exceed $30 million and Washington County stands to benefit from the ripple effect of Macy's investment, Timothy R. Troxell, executive director of the Hagerstown-Washington County Economic Development Commission, said last week

"I don't think there's any way they can fill that number of jobs without looking outside (Berkeley County)," Troxell said.

Washington County officials were approached about Project Olympus this summer, but Troxell said the amount of land needed for Macy's fulfillment center wasn't readily available, if at all.

"We had one site, but they were really going to have to shoehorn it in," Troxell said of a location off Hopewell Road near Halfway Boulevard.

In his opinion, Troxell said West Virginia was successful in its bid to attract Macy's because it not only has available land that offers convenient access to Interstate 81, but their available sites for the project were under county control.

Troxell said the incentive package offered by state and local officials also appeared to be "pretty aggressive."

The Berkeley County Commission approved a Payment in Lieu of Taxes (PILOT) agreement that allows Macy's to avoid paying real estate taxes until 2028 in exchange for payments to the county totaling $11.25 million until then. The agreement amounts to a tax break of about $10 million or $11 million for Macy's, Berkeley County officials said Thursday.

The PILOT deal with Macy's joins a number of similar agreements that were made with other major employers in the county.

The list includes Quad/Graphics Inc., Capitol Cement (Essroc), Ecolab Inc., Guardian Fiberglass, S. Schwab Co. (Ralph Lauren Children's Wear Distribution Center), Tiger Aircraft and Swearingen Aircraft (now Emivest Aerospace Corp.), and AB&C Group Inc.

Officials operating the Schwab Co.'s distribution facility announced plans last year to close it by this month. Tiger Aircraft, Emivest and AB&C Group have filed for bankruptcy, according to court records.

Aside from the county's PILOT incentive to attract Macy's, the state also approved a separate $7.3 million incentive package.

But beyond all of the incentives extended to the retail giant, Berkeley County officials have acknowledged the region already was attractive to Macy's because of the strategic proximity to large population centers in the eastern U.S.

L. Michael Ross, president of Franklin County (Pa.) Area Development Corp., said Macy's decision shows just how important the I-81 corridor is in the marketplace.

In the realm of economic development, it was "one of the biggest announcements in the country in 2010. You don't have many projects that entail 1,900 jobs."

"It's very impressive," Ross said. "It just shows how important of a corridor this is."

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