MONTGOMERY, NY-Staples Inc., has purchased the former Service Merchandise distribution plant in a deal approved earlier this week by the US Bankruptcy Court in Tennessee, which is overseeing the Service Merchandise reorganization. Staples closed on acquisition of the 765,895-sf plant that sits on 80 acres for $23.3 million on Sept. 28, according to officials with the Framingham, MA-based office supply retailer.

“The Montgomery fulfillment center will help us better deliver to our customers with more efficient, localized service,” says Joseph Doody, president of Staples Contract and Commercial. “We have enjoyed working with Sen. Schumer and the Empire State Development Group and hope to continue to build our relationship with the Montgomery community.”

New York State and Staples officials confirmed that the cost of the project, including land acquisition, machinery and retrofitting the existing building will be approximately $40 million. The Staples fulfillment center is expected to employ 450 New Yorkers within five years, including 300 new jobs by the end of 2001.

According to Governor Pataki’s office, New York State entered the sweepstakes to secure the Staples project late in the game. Four months ago, Staples CEO Tom Stemberg contacted Sen. Schumer and indicated the company was looking to build another distribution center in the Northeast, but that no New York sites were among the finalists. Although Staples was already far along in the process, Stemberg agreed to give fair consideration to any eleventh-hour offer. Governor Pataki and Empire State Development chairman Charles A. Gargano worked with Sen. Schumer to develop an offer for Staples. Trammel Crow worked with Staples on securing a site for its distribution facility.

The ESD alerted Staples about the Service Merchandise site and the company was the winning bidder for the property in a sale conducted by the Bankruptcy Court.

“In the past two years alone, huge retailers like the Gap, Home Depot and Kohl’s have all begun building major hubs in the Hudson Valley,” Governor Pataki says. “We are very proud to welcome Staples to New York and are happy to have them play a role in New York’s unstoppable economic resurgence. I also want to thank Sen. Schumer for his important role in bringing these jobs to Montgomery.”

In consideration of its $40-million investment and commitment to create 450 new jobs, Staples will be eligible to apply for an ESD grant of $250,000. In addition, thanks to the cooperation of the Newburgh-Stewart Empire Zone, a boundary amendment will be made to include the Montgomery project site. The amendment will allow Staples to qualify for Empire Zone property tax, wage tax and sales tax benefits.

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