Payless received tax incentives to open local distribution center

A Brookville Payless distribution center that’s future is in doubt was hailed by state and local officials when the $25 million site opened a decade ago with the help of tax incentives.

Now Payless is closing all of its stores and plans to file for its second bankruptcy. While the shoe retailer has still not answered questions about what this means for the Brookville center, it has confirmed in a statement that it is closing all of the U.S. stores served by the center.

About 550 full and part-time employees work at the distribution center, according to the Montgomery County Economic Development office. It is one of the largest employers in Brookville, a western Montgomery County town of about 5,900.

The distribution center survived one round of closures in 2017, when Payless closed its other U.S. distribution center, which was built in Redlands, Calif., around the same time as the Brookville location.

When the California center closed in 2017, Payless said the Brookville center would add the equivalent of about 80 full-time jobs.

The city of Brookville agreed to take out a loan and build a water tower in the Northbrook Industrial Park to support Payless and future development. Since Payless was in bankruptcy, it had the right to end its Brookville lease and a Payless official told the city that it was essential for the facility that the water supply issues be fixed.

Along with help from the city, Payless was awarded a 45 percent tax credit for an eight-year term when it made its initial decision to come to Brookville. The company said in the 2007 agreement that it would create 300 jobs for an average pay of $14.73 an hour.

The $25.8 million project was celebrated by then Payless CEO Matt Rubel, who said “We are delighted to join the Brookville community and to create new job opportunities in a high-performance work organization at our new distribution center.” Ohio’s former Lt. Governor Lee Fisher stated at the time that “We appreciate Payless’ commitment to our state and are excited that Ohio will be home to the company’s largest state-of-the-art distribution center.”

This also means the loss of income tax for the city and school district. Council meeting minutes state the city received about $154,000 in income tax from Payless in 2017.

At the time that the center opened, Payless had about 4,600 stores — about twice as many as it has now.

Messages were left with the Payless spokeswoman seeking more details about the site. Messages were also left with city and county officials. Some government offices were closed Monday because of the holiday and staff were not available to comment.

As brick-and-mortar retail gives way to the rise of online shopping and changing consumer habits, the casualties have included not only local retail shops but also distribution hubs serving those stores.

When Elder-Beerman’s parent company Bon-Ton filed for bankruptcy and closed all of its stores, about 96 people who worked at its Fairborn distribution center lost their jobs.

At the same time, other big companies have been growing their logistics and manufacturing presence in the Dayton area. Some of the largest projects have been centered around the Dayton International Airport, with Chewy, Alpla and Purina all within the last year announcing plans near the airport. Most large industrial buildings in the area are taken and Colliers International reported that as of the last quarter of 2018 there just 7.4 percent of industrial space was vacant in the Dayton market.

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The Dayton Daily News first reported on the future of the local Payless distribution center last week. Count on us to continue our in-depth coverage on the impact of the company’s bankruptcy on local workers.

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