AUSTINTOWN Snyder's nears deal for Tamco

Youngstown Mayor George McKelvey said the deal is about 90-percent sure, but it's too soon to celebrate.
By CYNTHIA VINARSKY
VINDICATOR BUSINESS WRITER
AUSTINTOWN -- Snyder's Drug Stores is expected to ink an agreement by the middle of this week to lease the Tamco distribution center from Giant Eagle through the year 2012.
Atty. Daniel Shapira, a spokesman for Giant Eagle, said Snyder's officials like the deal, but it is contingent on whether the Minnesota-based drugstore chain can line up financing for the deal.
"I understand there are some wild rumors circulating," he said. "Let me just say that Giant Eagle is very close to signing and we're hopeful that the deal will be closed by the middle of this week."
Youngstown Mayor George McKelvey cautioned that it's too soon to celebrate.
"I've been told that the deal is about 90-percent sure, but there's still a 10-percent possibility of failure," he said.
"In these turbulent economic times, I think we have to be very cautious. False hope is a very dangerous thing. It's too early to pop the champagne corks."
Under the proposed agreement, Shapira said, Snyder's would lease the former Phar-Mor warehouse for 10 years and would purchase the inventory and some equipment in the building.
Snyder's had been considering three possible distribution center locations since last summer: the Tamco center in Austintown, a Kansas City, Mo., site and one near Detroit. Shapira said Giant Eagle gave the company "some financial incentives" to choose Tamco, but he would not elaborate.
Mahoning County commissioners and Austintown Township trustees also approved a 10-year, 60-percent tax abatement on $8 million in inventory Snyder's expects to bring to the Victoria Road facility.
Snyder's officials could not be reached Monday, but they have said that the tax abatements and other incentives would be critical in their location decision.
Bob Bernat, secretary-treasurer of Teamsters Local 377 which represented the Tamco workers when it was a Phar-Mor facility, was also unavailable to comment.
McKelvey said Snyder's already has a warehouse in Kansas City. If the Tamco deal goes through, he said, he believes from "inside conversations" that the company plans to make the Austintown center its main distribution center because it is more centrally located than the Kansas City site.
He said Snyder's decided last week to call back 12 of the 250 Tamco employees laid off when Phar-Mor closed the center in July. The workers, all maintenance employees, were later told that they will not be asked to return until the lease agreement is final.
Shapira said Snyder's officials have talked about a plan to hire between 75 and 100 workers at first, giving preference to those who worked there when the center was operated by Phar-Mor. Eventually, he said, the company expects to employ about 200 at the Austintown site.
Snyder's tried to buy Phar-Mor out of bankruptcy last summer, with plans to continue operating 30 of its stores and the Tamco warehouse, but it lost out to another offer.
The winning bid of about $141 million came from a group composed of liquidator Hilco Merchant Resources of Boston, Pittsburgh-based Giant Eagle and CVS, a Rhode Island drugstore chain.