THE VIRGINIAN-PILOT
Copyright (c) 1995, Landmark Communications, Inc.
DATE: Wednesday, July 26, 1995 TAG: 9507260424
SECTION: BUSINESS PAGE: D1 EDITION: FINAL
SOURCE: BY MYLENE MANGALINDAN, STAFF WRITER
LENGTH: Medium: 77 lines
After aborting plans in 1989 to locate an office here, Trans World Airlines Inc. has decided to come to Hampton Roads after all.
The St. Louis-based airline will create 500 jobs with an annual payroll of $13 million in Norfolk by opening an East Coast reservations center, TWA and city officials said Tuesday.
Scheduled to open in March 1996, the reservations center will handle air-travel inquiries. The center will be in Norfolk's Lake Wright Executive Center, north of the Airport Hilton on Military Highway.
``We look at this as the flagship of our future,'' said Mark J. Coleman, TWA senior vice president of marketing.
Tuesday's announcement capped six years of negotiations and site selection, Coleman said. TWA had been close to opening a reservations center in Chesapeake in September 1989 but pulled the plug abruptly.
Norfolk city officials renewed the pursuit about three years ago, convincing the airline to reconsider an East Coast office in Hampton Roads.
TWA chose Norfolk for its location, the area's labor force and because of perseverance by the city's officials, Coleman said.
The Norfolk operation will be the fifth reservations center in the airline's U.S. system. TWA plans to transfer about 100 people to Norfolk from its other centers, including its Chicago operation. The remaining 400 workers will be hired locally.
Coleman said wages for hourly employees range from more than $5 an hour to $14. In an April 11 article that ran in the Tampa Tribune, Coleman told the Chamber of Commerce that salaries for the reservations center begin at $5.07 an hour and top out at $14 an hour. Minimum wage is $4.25.
To land TWA, Norfolk is making land available for the center, and the state is providing $450,000 from the governor's Opportunity Virginia fund.
Secretary of Commerce and Trade Robert T. Skunda delivered a check to Norfolk Mayor Paul D. Fraim on Tuesday. The $450,000 will be used to defray some of the infrastructure costs associated with the airline's building. Construction could begin in 60 days.
The project will cost $4.2 million. The one-story, 40,000-square-foot center will be built by Armada/Hoffler Construction Co.
Under the terms of the deal, the city is transferring ownership of the 10-acre site to the Norfolk Airport Authority. Armada/Hoffler is leasing the property from the Norfolk Airport Authority.
In the final stage of the transaction, TWA will lease from Armada/Hoffler both the land and the building, said D. Richard Felkerr II, CEO of Goodman Segar Hogan Hoffler, Armada/Hoffler's sister commercial real estate company.
TWA is the latest addition to Hampton Roads' growing menagerie of ``back-shop'' operations, which act as telecommunications branches for national companies. Avis, the national car-rental agency, announced last week that it will open an administrative and operations center in Virginia Beach.
``It doesn't matter where you put a reservation center,'' said Bob Goodman, a financial analyst with Credit Research & Trading. ``I guess it's mainly a cost issue. ''
``I think our big draw in Hampton Roads is we have labor that's affordable to corporations and the work ethic is quite strong in Hampton Roads,'' said John Whaley, director of economics for the Hampton Roads Planning District Commission.
TWA's past is checkered with unstable finances. It acquired businesses unrelated to transportation such as Hilton International, the hotel chain, and Century 21, a real estate firm. It also bid, unsuccessfully, for Pan Am under former CEO Carl Icahn, who won a takeover battle to run the airline.
TWA, which emerged from bankruptcy in 1993, posted its first net profit since 1990 this week when it reported net income of $5.2 million Monday. That compares with a loss of $58.2 million a year earlier.
The company recently reorganized its debt in bankruptcy court.
Under the reorganization, all the major creditors agree how the company will be restructured. Goodman said the company's finances have been improving as a result of the filings.
``It eliminated $500 million in debt,'' he said. ``They've created a more stable company that, hopefully, over time will grow.'' by CNB