THE VIRGINIAN-PILOT
Copyright (c) 1996, Landmark Communications, Inc.
DATE: Friday, September 6, 1996 TAG: 9609060490
SECTION: BUSINESS PAGE: D1 EDITION: FINAL
SOURCE: BY BATTINTO BATTS JR., STAFF WRITER
DATELINE: PORTSMOUTH LENGTH: 73 lines
A New York-based mail-order company has scrapped its plans to build a warehouse in the PortCentre Commerce Park.
Direct Marketing Enterprises, one of the nation's largest mail-order firms, failed to secure a loan to finance the $10 million warehouse it planned to build on 20 acres south of City Hall, Jerry Williams, CEO for the company said Thursday.
City officials had been banking on the business as a way of improving Portsmouth's employment and commercial tax base and had committed to spending more than $1 million in city and state money to prepare the site for the company.
City officials are once again seeking a company, or several companies, to occupy the vacant parcel.
Direct Marketing, which sells toys, jewelry, clothing, electronics, home medical-care products and other merchandise, had been projected as an economic boost to the financially strapped city.
The company is a competitor of QVC, which has a warehouse in Suffolk and a telemarketing center in Chesapeake, and Lillian Vernon Corp., which has a distribution center in Virginia Beach.
Direct Marketing planned to employ up to 300 people in the 230,000-square-foot warehouse and would have paid an estimated $200,000 annually in taxes to Portsmouth.
The warehouse would have created jobs in shipping and receiving, transportation, materials handling, security, maintenance, computer operations and customer service.
``This hurts a lot,'' Mayor James T. Holley III said. ``Any time we lose an investor of that magnitude that would have helped economic growth and employment, we consider it a setback. We are going to market the property and start all over again.''
But Steve Herbert, head of the city's plans and policy office, said losing Direct Marketing might be a blessing for the city.
``We are disappointed that they are not here,'' Herbert said. ``But given their financial problems we are probably better off without them.''
Headquartered in Westbury, N.Y., Direct Marketing was recruited to the Portsmouth by city, regional and state officials. Anxious to secure the company, city council had agreed to pay $565,000 to improve the land where the warehouse would have been built. The state had pledged another $500,000 for site improvement and job training.
The city has spent less than $100,000 removing streets within the site, said Matthew James, Portsmouth's director of economic development.
The majority of the money the city had allocated to the project would have paid for site improvements specific to Direct Marketing's needs. Those improvements were to be made as the company built the warehouse, James said.
For nearly six years, city officials have been seeking companies to fill the 60-acre park, which now houses the WAVY-TV studios.
Located adjacent to WAVY-TV, the site on which Direct Marketing was to have built its warehouse is considered prime property.
It's likely that the city will now split the parcel into five- to eight-acre sites to allow several additional companies to move into the commerce park, James said.
James said he has met with representatives from a number of small distribution and manufacturing companies this week.
He said he has several prospects and leads, but no offers.
``In my business, you never believe it until you see it,'' he said. ``You wait until you see the building coming out of the ground and the employees walking in.'' ILLUSTRATION: Graphic
The Company
The Funding
The Location
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KEYWORDS: MAIL ORDER COMPANY DIRECT MARKETING by CNB