Rite Aid Corp. yesterday confirmed plans to build a nearly $70 million distribution center in Harford County that will employ at least 850, ranking the project as one of Maryland's largest job creators this decade.
In selecting the Perryman section of Harford for its new warehouse, the Camp Hill, Pa.-based company becomes the latest in series of retailers and manufacturers, including Gap Inc., Time Warner Inc., Fila USA Inc. and Staples Inc., that have selected the state for major warehouse operations.
In the case of Rite Aid, the nation's largest drug store chain spurned neighboring Virginia for Maryland because of its mid-Atlantic location, work force and superior transportation network, the company said.
Rite Aid was also apparently won over with money, though. Combined, the state and Harford County will provide the company with $7.65 million in incentives, encompassing "Sunny Day" funds, grants, tax credits, training dollars and road and sewer line improvements.
"We had to work aggressively to be competitive," said Gov. Parris N. Glendening. "There are other states that quite candidly can offer a solid work force and transportation, and often it comes down to marketing, personal contacts and being reasonably competitive with incentives."
State officials were particularly elated because earlier this week, Rite Aid Chairman and Chief Executive Martin L. Grass told legislators in Annapolis that Harford's site was initially passed over in favor of a site in Winchester, Va., sources said.
In exchange for the incentives, Rite Aid's Perryman project will generate $810,500 annually in taxes and have a yearly payroll of $13.6 million. The company and its 3,000 employees here currently pay more than $25 million a year in taxes.
"This is a clear victory for Rite Aid and the region," said Harford County Executive Eileen M. Rehrmann. "We are pleased that Rite Aid is becoming a member of Harford's corporate community and bringing 850 jobs for residents of Harford, Baltimore and Cecil counties."
"Rite Aid is experiencing rapid growth in the mid-Atlantic and northeast, which has created the need for additional distribution capacity," said Grass, who lives in Baltimore County. "We will be better able to serve our customers through this highly-efficient, technologically-advanced distribution center."
Rite Aid, with $5.4 billion in sales last year and profits of $159 million, expects to open 400 stores nationwide in 1997 and 70 more Maryland outlets by 2000, Grass said. Additionally, some existing stores will either be expanded or relocated.
Rite Aid currently operates 3,500 stores in 26 states, with 180 in Maryland.
With the exception of MBNA Corp., which last month pledged to open a regional headquarters in Hunt Valley and create 3,000 jobs, Rite Aid represents the largest single commitment of new jobs to the area since 1990, state officials said.
With its new 830,000-square-foot facility -- scheduled for completion on a 125-acre site by fall 1998, under Harford's "fast track" permitting process -- Rite Aid will shutter an aging and smaller warehouse in Harrisburg, Pa. As a result, the company expects to lay off 500, but it is considering alternate uses.
"It has several problems," said Wayne Gibson, a Rite Aid senior vice president of distribution. "It's of an older vintage, it has low ceilings that prevent operating efficiency, it's landlocked so we couldn't expand it and it's obsolete in terms of its equipment."
With the planned store growth, Rite Aid may expand the distribution center here to 1.2 million square feet and increase employment there to over 1,000, Gibson said. At that size, it would be one of the state's largest buildings.
The new facility is expected to serve Rite Aid stores in six states, ranging from Virginia to New Jersey, Gibson said.
"Interstate 95 became vitally important to them from a distribution standpoint," said Richard F. Blue Jr., an executive vice president of real estate firm Colliers Pinkard, which represented Rite Aid in its search.
Pub Date: 3/22/97