TROY — The city of Troy and Troy Development Council have proposed to offer an incentive package to entice an unnamed company to select Troy over a Kentucky community to utilize the former United Retail distribution center on Experiment Farm Road.
At Monday’s workshop for council as a whole (which was streamed live, but not recorded), Director of Public Service and Safety Patrick Titterington presented the development team’s idea called “Employee Creation Incentive Program.” The plan, which would be tailored to each individual investment project, would help to entice potential companies to choose Troy over other communities or states. The program would be an addition to federal and state economic incentive packages to draw employers to Troy.
Titterington said he, Mayor Robin Oda, Tim Davis and Joseph Graves from Troy Development Council, presented its plan to the undisclosed company last month. Titterington said the company selected Troy over other Ohio communities and is now competing against a Kentucky community for their business.
“We think we can put ourselves in a position where we can push this project to a decision,” Titterington said.
On Thursday, Graves said the company is “a very well-known company” and Troy and the Kentucky community beat out 27 other Midwest sites. Graves said Troy Development Council has had “quite a bit” of interested in the United Retail site, but said the building has “some challenges.” Graves said they’ve been in contact with the company this week and hopes to have an answer by April.
The current interested company looking at the United Retail property told city officials its plan is to hire 420 employees with an average wage rate of $14-15 per hour. City officials estimate the company would have a $20 million payroll per year once all employees are hired. Titterington said the city has also offered the company a 12-year property tax abatement plus the payroll incentive.
Each plan would have to be approved by council to offer incentives such as property tax abatement or as in the case of this project, a payroll-based incentive which would “kickback” 25 percent of the city’s withholding payroll tax (currently 1.75 percent) back to the company up to a maximum threshold amount set.
“We think this is a good program to reserve as a last dollar push for those big companies,” Titterington said. Council would approve each plan if a company seeks to participate, including existing companies as well as new manufacturing, research and development and other industries.
Titterington said the program would include eligibility guidelines such as a minimum payroll projection of $10 million or more; an employee average pay rate of 175 percent or more above Ohio’s minimum wage; commit to operations of 10 years or more; allow the city to review payroll withholding figures; a reimbursement of the payroll incentive if the agreement is broken; suspending payment if the company’s payroll drops below $5 million; and ramp up to full staffing within four years of operation.
Titterington said there are “substantial financial burdens” with the United Retail property currently. At one time, there were two companies interested in the building, but one has since passed on the property.
Both interested parties told city officials there were several issues with the building, including removing the mezzanine area that would cost $500,000 and a new roof, which was estimated to cost $1.2 million as well as other costs to modernize the building.
The former United Retail distribution center located on Experiment Farm Road closed its doors last August.
The distribution center had downsized and its last 80 employees, mostly part-time, were laid off days before the doors closed last fall. At peak in the mid-1990s, the distribution center had around 300-350 employees.
RD Dayton LLC, an investment group out of Lakewood, N.J., purchased the property in January 2019 for $13.1 million and was leasing the facility to United Retail. The facility has 320,000 square feet of building space outfitted with conveyor systems.
The facility used to distribute clothing for several plus-size brands until it focused mainly on its The Avenue store brands.
United Distribution purchased land to build the 128-acre distribution center in 1992 for $2.3 million. According to records, United Distribution Services Inc. then sold the building to Ornatus Urg Real Estate LLC for $3.5 million in 2013. On Jan. 2, 2019, Ornatus Urg Real Estate LLC sold the property to RD Dayton LLC for $13.1 million.
The finance committee approved to move forward with the program, which will seek council approval at a later date.