Harford considers $550,000 incentive package for Perryman distributing operation

Maines Paper and Food Service already employs 160 people at Perryman distribution center

Harford County is close to finalizing its part of a $550,000 incentive package for a broad line food and paper products distribution company that expanded its Maryland operations to a site south of Aberdeen.

The package for Maines Paper & Food Service Inc., is made up of two components: a $500,000 grant/loan from the Maryland Department of Commerce's Maryland Economic Development Assistance Fund, or MEDAAF, for equipment and machinery purchases and a $50,000 grant from the county, to be spread out over five years, for training employees.

The company's employment targets to be eligible for the assistance have largely been exceeded, Tucker McNulty, senior economic development associate for the Harford County Office of Economic Development, said Tuesday evening, as the assistance package was reviewed by the Harford County Council. In addition, Maines will match the county portion of the package dollar for dollar.

He said Maines, a $3.5 billion-plus, privately held company serving 36 states, has about 160 full-time employees at its Harford County distribution center in the 1500 block of Perryman Road, where the company occupies 123,000 square feet in the same building that houses Rite Aid's Maryland distribution center.

Maines originally set up operations in Maryland in Howard County's Savage area and, when later looking to expand, chose Harford County with the assistance of state and local economic development officials, McNulty said. The company opened its Perryman operation in December 2015.

He also said the company invested $10 million in equipment and fixtures at the Perryman facility, where it started with 10 full-time employees and an expectation of hiring at least 75 more, which has been exceeded.

"Harford County is fortunate in this current economic climate where every state is vying to retain jobs, as well as create jobs, that our partnership with the State of Maryland has resulted in positive growth and retention," McNulty continued. "The Harford County Office of Economic Development is pleased to attract a nationally recognized brand and to play a supporting role in the expansion of our critical distribution sector."

A fiscal impact analysis from the Office of the County Auditor notes the company will receive from the state "a grant of $500,000 towards the eligible project expenses and various tax incentives," while Harford County will provide workforce technical training grants over five years, not to exceed $10,000 in a single year. The state grant amounts to a $500,000 forgivable loan, provided certain conditions are met, county government spokesperson Cindy Mumby said Wednesday.

In exchange, the company is required to have 75 additional full-time hires by the end of 2017 for the term of the agreement.

"For a conservative estimate, we have assumed that 60 percent of its employees are Harford County residents and wages meet the agreement minimum," the analysis states. "The new employees would generate approximately $20,000 in [local] income tax each year after they are employed."

The council is required to pass a resolution approving both components of the incentive package, which is expected to come during the next council session on Jan. 10.

In response to questioning from council members, McNulty said the actual number of Harford residents employed at operations like Maines is 80 to 85 percent. While he conceded many of the warehouse and distribution jobs are minimum to low-wage positions, the jobs have "a multiplier effect" on the local economy in terms of housing, retail purchases and tax revenue generation

Councilman James McMahan said the deal "seems like a gift come true" and noted he had once been an opponent of such "giveaways."

Because the larger state aid package is contingent on the county's smaller participation, McMahan said the county is placed in the position of "look this gift horse in the mouth or play a game."

Despite his previous skepticism, McMahan said he once had the auditor's office make a 15-year economic impact analysis of five random local companies that received government incentives and which found, to his surprise, that the county came out ahead.

"The figures don't lie to me," he said. "I did an about-face; I believe in it."

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