3 states vie with Md. for Staples jobs Pa., Va., W.Va. seek distribution hub that could hire 700

Hagerstown in the running

Washington County, with 8.1% jobless rate, could get huge boost

Retailing

March 28, 1996|By Kevin L. McQuaid | Kevin L. McQuaid,SUN STAFF

Maryland is locked in a competition with three neighboring states to land a Staples Inc. distribution hub that could create as many as 700 jobs.

The Framingham, Mass.-based office-supply superstore, which will spend a projected $50 million to develop its warehouse operation, has narrowed its search to a site in Hagerstown and locations in Pennsylvania, Virginia and West Virginia.

"We're looking for a distribution facility as a result of the company's growth," said Kim Shea, a Staples spokeswoman. "We opened 94 stores last year, and our continued growth requires a distribution center to service new outlets."

In 1995, for instance, the 10-year-old retailer doubled its net income to $73.7 million, while its sales climbed 53 percent to $3.1 billion. With that sales growth, Staples became only the sixth company in U.S. history to top sales of $3 billion in its first decade.

This year, Staples plans to open 120 stores, augmenting the 459 outlets it operates in the Northeast and California, selling office supplies, furniture, computers and related equipment and business machines.

Under a tentative plan, Staples' million-square-foot distribution center -- roughly equivalent in size to two 30-story Commerce Place skyscrapers downtown -- would supply stores within a 1,000-mile radius.

Because of its job potential, a Hagerstown selection would provide a tremendous boost for Washington County, whose 8.1 percent unemployment rate in January was 55 percent higher than the state average of 5.2 percent, according to statistics compiled by the state's Department of Labor, Licensing and Regulation.

With 700 potential jobs, Staples would become the county's fourth-largest private employer, behind only Citicorp Credit Services, Mack Trucks and Garden State Trucking.

"Final site selection will be a function of the viability of the development site, infrastructure, the availability of rail and labor, the cost of labor and the economic incentive packages offered by each state," said Robert Steinhart, a Lanard & Axilbund real estate broker in Philadelphia representing Staples.

A decision could come as early as next month, after a meeting between the company and the state's Department of Business and Economic Development April 3, sources said. A DBED spokesman declined to comment on the status of the project.

Staples plans to have the new distribution center operational in the first quarter of 1997. The company's mid-Atlantic stores now are serviced from a warehouse in Connecticut, Ms. Shea said.

In Hagerstown, Staples has signed a letter of intent to acquire land in a planned 803-acre business park at the junction of Interstate 70 and Interstate 81. The company has penned similar commitments for sites in the three other states, sources said.

The necessary land for the distribution hub in Hagerstown would cost Staples roughly $4.6 million.

The property in Hagerstown, known as Hunter's Green, comprises five former farms. The property, which is served by CSX Corp. rail lines, is owned by local residents and an investment group comprising Mid-Atlantic Properties Inc. President Wayne R. Gioioso Jr., Arundel Corp. Executive Vice President William F. Chew III and Edward L. Bishop III, a former Drexel Burnham Lambert government bond executive.

"It will come down, as it always does, to time and money," Mr. Gioioso said. "Which site is the most economical, how much time it will take to build their building and what the state can provide."

Ultimately, the Hunter's Green site is projected to contain as much as eight million square feet of office and warehouse space, said Walter L. Patton, a principal with Towson commercial real estate firm KLNB Inc., who together with Andrew J. Georgelakos is marketing the property.

Pub Date: 3/28/96

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