DATE: Tuesday, February 25, 1997            TAG: 9702250215

SECTION: BUSINESS                PAGE: D1   EDITION: FINAL 

SOURCE: BY MYLENE MANGALINDAN, STAFF WRITER 

                                            LENGTH:   44 lines

THE DISCOUNT CHAIN IS LEAVING NORFOLK FOR A NEW FACILITY IN CHESAPEAKE.

Gov. George F. Allen is expected to be in Chesapeake today to announce that Dollar Tree Inc. is building a new headquarters and distribution facility with help from state funds, according to sources close to the deal.

The discount retailer has resided in the Norfolk Commerce Park for a decade. It has been looking for expansion space for some time, economic development sources say.

The retailer announced publicly last July that it planned to leave Norfolk, possibly for another site in South Hampton Roads, to accommodate its expansion plans. Chesapeake economic development director Donald Z. Goldberg confirmed last November that Dollar Tree had narrowed its search to a Greenbrier site.

The site of Dollar Tree's new facility will be a 40-acre parcel on property owned by Volvo Penta. It is located near the intersection of Eden Way North and Volvo Penta Drive.

The site can accommodate a 400,000-square-foot warehouse, with expansion space for 400,000 more square feet. It also will have 75,000 square feet of office space, with an option for 75,000 more square feet.

The Dollar Tree announcement is significant because state incentive money is being used to relocate a firm from one city to another in the same region. That has never occurred in Hampton Roads before.

Sources have said that Chesapeake will receive $200,000 from the Governor's Opportunity Fund, which the city would match.

The Governor's Opportunity Fund is used to entice businesses moving into the state or to retain businesses or help them expand. Virginia Beach used grants from the fund to assist in Lillian Vernon's distribution center expansion and Avis' new reservations center.

Cities are restricted to one dip into the Opportunity Fund annually, and the project must call for $10 million capital investment and at least 100 new jobs.

Dollar Tree is a chain of discount variety stores that sells general merchandise for a dollar. There are 686 stores nationwide.

The company, which went public last year, employs about 6,500, including 250 at its headquarters. Its stock, listed on the NASDAQ exchange, closed Monday at $42.63 a share. MEMO: Staff writer Mac Daniel contributed to this report.

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