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- 2012 - March - 13th -

$6.6M in incentives offered for Bi-Lo, Winn-Dixie HQ

By Mark Basch and Karen Brune Mathis, Staff Writers

While Bi-Lo Holdings LLC promised to create 100 new jobs as part of an incentive package to move its headquarters from Greenville, S.C., to Jacksonville, its CEO said Monday that he hopes to add even more than that.

“We expect to create a lot more than 100. That’s a minimum number,” Bi-Lo President and Chief Executive Officer R. Randall Onstead Jr. said in an interview.

Bi-Lo completed its $560 million acquisition of Jacksonville-based Winn-Dixie on Friday, creating a company with 688 supermarkets and 63,000 employees in eight states.

On Monday morning, it announced that the headquarters of the merged company will be in Jacksonville.

Mayor Alvin Brown and City and state representatives announced at a City Hall news conference that pending approvals, Bi-Lo could receive $6.6 million in incentives to move and that the company would add 100 jobs and invest $93 million in capital projects.

The deal also keeps 900 local Winn-Dixie jobs at the headquarters, which creates more than 1,000 jobs with the additional positions.

Brown and JAXUSA Partnership President Jerry Mallot said those headquarters jobs will pay an average $84,000 a year.

Onstead said a few people will be moving from Greenville but most of the additional jobs will be new hires.

“We’re mainly talking about new jobs created here,” he said.

Onstead would not give a timetable for adding those first 100 jobs or the additional positions, but he expects the company to grow.

Bi-Lo has said since the merger was first announced that Winn-Dixie supermarkets will continue to operate under that name and Bi-Lo stores would continue with their current name.

Onstead said customers won’t see anything in Winn-Dixie stores with the Bi-Lo name.

While the corporate name is now Bi-Lo, Onstead also said that the headquarters building on Jacksonville’s Westside will continue to have the Winn-Dixie name. Bi-Lo will continue to operate offices in Greenville with that name.

While not putting names on them, Onstead did say that he hopes to take the “best practices” from both supermarket chains and implement them in all the stores.

“I think both are doing certain things well,” he said, but he would not discuss specific programs.

Onstead said the incentive package was one factor in the decision to put the headquarters in Jacksonville.

“There were a lot of things that went into our decision-making and some carried more weight than others,” he said.

Other factors included Winn-Dixie’s facilities in Jacksonville, including its distribution center, and its central location for the eight-state store network, which stretches west to Louisiana and north to Tennessee and North Carolina.

Winn-Dixie has been operating in Florida, Georgia, Alabama, Louisiana and Mississippi. Bi-Lo’s stores are in Georgia, Tennessee, North Carolina and South Carolina.

The $6.6 million in incentives consists of:

• $1.04 million through Florida’s Quick Response Training program used for training costs for new and existing employees.

• $3.6 million in a state Quick Action Closing Fund to offset the costs of relocation expenses and equipment purchases.

• Up to $2 million from the City through a “Revenue Enhanced Value” grant over 10 years. A REV grant is based on the increased taxes generated by property improvements and is repaid to a company after it pays taxes.

That deal is scheduled to be introduced to the Jacksonville Economic Development Commission on March 21 and then Council. It could be approved by Council in late April or early May, said Paul Crawford, acting executive director of the JEDC.

South Carolina made an effort to keep the Bi-Lo headquarters, but Onstead wouldn’t provide details of that state’s offer.

“We received a very compelling offer from South Carolina as well,” he said.

Brown said at the City Hall news conference that South Carolina was “very aggressive” in trying to keep the headquarters. “That is why it was critical for the City and the state to get involved,” he said.

“South Carolina was very, very aggressive offering a whole lot more than we could come up with,” said Lt. Gov. Jennifer Carroll at the news conference.

She said Gov. Rick Scott became involved to keep the headquarters in Jacksonville and met with the Bi-Lo team several times.

Carroll said the state’s business climate, Winn-Dixie’s presence and its workforce persuaded Bi-Lo to choose Jacksonville.

“They saw this as a better choice than South Carolina,” she said.

Amy Love, marketing and communications director for the South Carolina Department of Commerce, did not provide details in an email late Monday.

“South Carolina Commerce comments on projects when they announce in South Carolina,” she said.

GreenvilleOnline.com quoted Butch Kirven, chairman of the Greenville City Council, saying that the South Carolina governor’s office and the commerce department were involved in trying to keep Bi-Lo jobs.

He said he believed the company’s decision might have been based on other factors, including how many employees would be affected by moving operations from Jacksonville to Greenville in contrast to moving them from Greenville to Jacksonville.

“I know incentives were discussed and offers were put on the table,” Kirven told GreenvilleOnline.com. “And I think that we were very competitive with Florida, but in the end, I think the company made a business decision in their best interest, of course, and maybe the incentive differential was not the major factor to them.”

Bi-Lo President Michael Byars said he will stay in Mauldin, S.C., where Bi-Lo is based with 450 jobs. He said company officials are starting to evaluate “which opportunities would work best in Jacksonville, which ones would ultimately stay here,” reported GreenvilleOnline.com.

Mallot, an executive-on-loan to Brown for economic development, said the $93 million in capital investment will be spent at the headquarters for infrastructure, especially in information technology and systems integration, and at the distribution center.

Mallot also commented about the separate brands of Bi-Lo and Winn-Dixie. “The brand loyalty is so strong they don’t expect to change that,” he said.

The 100 new jobs will be “created over time,” according to a news release distributed at the news conference.

One new job that has already moved to Jacksonville is Onstead’s. The 55-year-old Houston native, who had been living in Santa Fe, N.M., has already moved to temporary housing in Jacksonville.

“I’m here full time now,” he said.

Onstead was pretty much born into the grocery business. His father, Robert Randall Onstead Sr., was a founder of Houston-based Randall’s Food Markets Inc., and R. Randall Onstead Jr. began working there in 1978.

He eventually became chairman and CEO before it was sold to Safeway Inc. in 1999.

One of Onstead’s two sons, Robert Randall Onstead III, also is in the business working in Greenville.

Onstead said he and his wife were very visible in the Houston community and he expects them both to be active in Jacksonville once his wife moves here.

“I expect to be just as visible as I have been in the past,” he said.

“We’re excited about being in Jacksonville,” he said.

Brown announced at the news conference that Onstead was moving to Jacksonville.

“We are very excited that he is moving here and he is leading the new combined company in our city,” Brown said.

mbasch@baileypub.com

kmathis@baileypub.com

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