The city of Warren stands to lose $45,000 annually in income taxes.


February 28, 2009 at 12:04a.m.

The city of Warren stands to lose $45,000 annually in income taxes.

STAFF REPORT

WARREN — Leedsworld, the New Kensington, Pa.-based promotional materials company that opened a factory on North River Road in August 2006, is closing, effective April 27, eliminating 85 jobs.

Mayor Michael O’Brien, who learned of the closing Friday, said the move was necessary because of a drop in business brought on by “this wicked economy.”

He said Leedsworld was also making cuts at is production facility and headquarters.

The one positive note, O’Brien said, is that the company will be keeping its lease, meaning that it would not be difficult to reopen the plant if business picks up again. The company will have to continue to pay on the lease, O’Brien said, but he didn’t know for how long.

The loss of the 85 jobs translates into the loss of about $45,000 annually in income taxes for the city, which is already reeling from job losses at the Severstal steel mill, Delphi Packard and other factories.

Leedsworld designs and manufactures promotional materials, ranging from pens and tote bags to deluxe corkscrews and backgammon games for companies such as Apple Computers, American Express and Toyota.

Local and state government gave Leedsworld significant help in starting up the factory, including a 10-year, 75 percent tax abatement from the county, a $2 million, 1 percent loan from the state, a $155,000 training grant from the state, and a $436,000 state tax credit, O’Brien noted.

He said he didn’t know the terms of the grants, loan or tax credit or whether Leedsworld would have to pay anything back on them.

The loss of the company is “particularly stinging,” O’Brien said, because the city “played such a large role with the Regional Chamber in attracting” the company.

The plant took over a former Delphi Packard production building. The city also purchased 6.2 acres adjacent to the plant for possible future expansion, O’Brien said.

The company had hoped to have 500 employees working there by 2011.