City officials already are considering laying off workers because they are short on tax revenue.

City officials already are considering laying off workers because they are short on tax revenue.
By DON SHILLING
VINDICATOR BUSINESS EDITOR
YOUNGSTOWN -- Phar-Mor's decision to sell its stores is bad news for the city it calls home.
Turning over the 73 stores to others could spell the end for its downtown headquarters, where nearly 200 people work.
"It would be a major loss to us," said C. Richard Pavlock, president of downtown's redevelopment agency.
Losing those workers would reduce taxes paid to the city as well as cut back the number of people downtown and the money being spent there.
Attracting employers
The Youngstown Central Area Community Improvement Corp. has been trying to attract a diversity of employers to downtown, including retail, technology and business, but the closing of Phar-Mor's headquarters would not derail those efforts, said Pavlock, who is vice president for facilities management at Home Savings and Loan Co.
With the city already looking at layoffs because of declining revenues, the prospect that Phar-Mor headquarters could close is troubling, Mayor George McKelvey said.
"It makes our problem a bigger problem," he added.
Phar-Mor paid $280,000 in income taxes last year to the city, which was down from $306,000 the year before.
Budget deficit
City officials now are struggling with how to make up a deficit of $1.7 million in this year's budget. Layoffs of about 40 city workers are being considered.
If the headquarters does close, the city will have to revise its plan and make more cuts, McKelvey said.
John Ficarro, Phar-Mor senior vice president, said it's too early to talk about the future of the headquarters. There are too many variables remaining, he said.
Phar-Mor has proposed naming Phar-Mor Acquisition the lead bidder in the sale of its stores and other assets. That selection must be approved in U.S. Bankruptcy Court, and then other companies must be given until July 11 to make higher bids.
If its bid is successful, Phar-Mor Acquisition would not operate the stores but try to sell them to other companies.
Ficarro said Phar-Mor hopes the stores are sold in large groups or to one operator.
Tamco workers
Also included in the sale would be its Tamco distribution center in Austintown. Bob Bernat, secretary-treasurer of Teamsters Local 377 in Youngstown, said he is concerned because the companies that came together to form Phar-Mor Acquisition are specialists in liquidation.
The union has 250 workers at Tamco and 100 more recently laid off, so it wants to see the distribution center sold to a company that intends to operate it.
Tamco has productive workers, advanced material handling systems and the space to expand, he said. Phar-Mor built the warehouse when it had more than 300 stores. At one time, Tamco employed more than 1,000.
shilling@vindy.com