State officials land Saks with $6 million loan Top retailer promises hundreds of jobs at new distribution site

Work goes to Aberdeen

Local governments plan to sweeten deal with own incentives

October 12, 1995|By JOHN W. FRECE | JOHN W. FRECE,SUN STAFF

Top state officials traded $6 million in tax dollars for a promise of as many as 450 new jobs in Harford County yesterday, closing a deal that will bring a multimillion dollar Saks Fifth Avenue distribution center to Aberdeen.

Gov. Parris N. Glendening and the other two members of the Board of Public Works sealed the deal by unanimously approving a $3 million state loan to Saks. That will be in addition to a previously approved $3 million sweetener from the state's business incentive "Sunny Day Fund."

While most of that money will go to Saks as loans, all but $1 million of it can be converted to an outright grant if the company creates at least 375 jobs at the planned 470,000-square-foot facility in its first two years of operation. The $1 million will remain a loan with interest owed the state at 5.63 percent.

Roger E. Drechsler, who helped arrange the deal for the Department of Business and Economic Development, told the board that Saks expects no difficulty exceeding the minimum number of jobs required.

The governor and board members greeted the Saks deal as good news for a state that is trying to use whatever resources it can muster to convince businesses to move or expand here. Expansion of private sector jobs is the best way to offset a drop in government jobs caused by potentially huge cuts in federal aid, Mr. Glendening said.

In addition to the state incentives, Harford County has agreed to provide property tax credits estimated at $625,000 over five years and the town of Aberdeen is contributing $1.5 million over 15 years.

Negotiations stretched over more than a year and a half, Mr. Drechsler said.

The new distribution center will be in the 213-acre Hickory Ridge Industrial Park, where snack maker Frito-Lay Inc. bought land for a manufacturing and shipping operation in 1991.

"This is a tremendous win for Maryland over New Jersey and several other states bidding for this prestigious center," he said.

Saks' officials could not be reached yesterday for comment.

Saks is considered one of the world's premier retailers. It operates a chain of 46 full-line stores, including two in Maryland, plus nine "Off 5th" clearinghouse stores. The firm is rapidly expanding and expects to add 19 stores by 1997, including several in the Carolinas.

The new Harford distribution facility, which would replace an aging facility in Yonkers, N.Y., is key to those expansion plans, Mr. Drechsler told the board.

Because of its proximity to Interstate 95 and major Eastern population centers, the center will serve as Saks' main East Coast distribution hub.

The Saks' facility will be built by the Constellation Real Estate Group Inc., a subsidiary of the Baltimore Gas & Electric Co., at a cost of $26 million. It then will be leased to Saks.

Saks will put $11 million into the project for equipment, moving costs and severance pay for employees at its old distribution center.

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