Snyder's deal highlights public-private sector ties

To appreciate the importance of Snyder's Drug Stores' reopening the former Tamco warehouse in Austintown, consider these two numbers: 200 and 700,000. The first refers to the level of employment that the Minnesota-based chain has set for the warehouse; the second reflects the size of the facility -- and the psychological and economic impact such a huge building would have had on the region had it remained empty indefinitely.
That's why the last week's announcement that Snyder's had signed a 10-year lease with Giant Eagle, which owns the building, is cause for celebration. Area residents who had lost their jobs at the Tamco warehouse as a result of Phar-Mor Inc.'s bankruptcy will be returning to work, and a structure that could have stood as another reminder of the region's economic turmoil will be filled with the sound of work.
And lest anyone think that the region is being forced to settle for crumbs, consider the fact that the drug store chain is making an initial investment of $20 million in inventory for the warehouse, will be investing in new technology and equipment and will use the facility to serve Snyder's 168 corporate stores and more than 100 independent retailers.
In other words, this is the big leagues of warehousing. That's why the Ohio Department of Development provided a $100,000 grant and an industrial training grant of up to $75,000, the Mahoning County commissioners and the Austintown Township trustees came through with a 10-year, 60 percent property tax abatement, and Giant Eagle provided $1.5 million in incentives.
The tax abatement will save Snyder's about $105,000 a year, while the Giant Eagle incentives will be in the form of reduced rent and bargain prices on Phar-Mor inventory that Snyder's is buying.
Significant
But the story takes on even greater significance when you consider that the Minnesota company had tried to buy Phar-Mor out of bankruptcy last summer, with plans to continue operating 30 of its stores and the Tamco warehouse. There was widespread community support for Snyder's, but in the end the winning bid of $141 million was submitted from a group composed of liquidator Hilco Merchant Resources of Boston, Giant Eagle, which is based in Pittsburgh, and CVS, a Rhode Island drugstore chain.
We weren't happy with this development since the group had made it clear that neither Giant Eagle nor CVS had any intention of keeping Phar-Mor stores open or utilizing the warehouse.
The empty buildings in Boardman, Liberty, Niles and Austintown are a constant reminder of the demise of what was once the crown jewel of the Valley's entrepreneurial might. Youngstown businessman Michael I. Monus started Phar-Mor, and through the concept of power buying and deep discount selling he built the chain into a national powerhouse.
But Monus ran afoul with the law and is serving a federal prison sentence. The business that he built ultimately crumbled.
Now, the warehouse has found new life, former Tamco workers are returning to work and the region can take satisfaction in the fact that the public and private sectors worked together to bring about an economic development success.
That should encourage members of ACTION, the faith-based grass-roots organization, which has launched a campaign to urge Giant Eagle to reduce its asking price for the building at Market Street and Midlothian Boulevard that had housed a Phar-Mor store. ACTION has been working to find a replacement so that residents of the lower South Side have a convenient place to shop for groceries and other necessities.
Mayor George M. McKelvey has been in regular contact with Giant Eagle officials and is confident that a solution can be found. We wish him success.