Virginia’s financial offers lure Nautica from Maine

ROCKLAND – Yes Virginia, Nautica is leaving Maine.

Nautica Enterprises Inc. announced Tuesday that it will move its Rockland operation, which has been here since 1939, to Martinsville, Va., leaving nearly 300 workers without jobs and health benefits by the end of January 2003.

But it’s not that the move came as a surprise, state Sen. Christine Savage, R-Union, said Wednesday.

“We knew it was on the horizon, [but] it came quicker than what we thought it was going to,” she said.

To lure Nautica south, Virginia and that state’s Henry County provided at least $3.45 million in economic and financial benefits, according Virginia state officials.

By comparison, Nautica in recent years received almost $15 million in loans, a $400,000 grant and a $13 million tax increment deal from Maine and Rockland.

Nautica, formerly known as VanBaalen Pacific Corporation/State-O-Maine, is a leading international fashion and lifestyle company with products ranging from sportswear and accessories to a complete home collection.

Several times over the decades Nautica has teetered on leaving the state, but Maine and Rockland have devised ways to entice the company to stay.

But this time around, Maine apparently did not have a chance.

Virginia, Georgia, Tennessee, Ohio and Pennsylvania courted the company for its business, and Virginia won the investment. Two years ago, Nautica decided to invest $40 million in a distribution facility in Virginia’s Henry County and to create 375 new jobs.

On Tuesday, Savage and state Rep. Deborah McNeil, R-Rockland, issued a press release stating that they were looking at ways to keep Nautica in Maine.

On Wednesday, the legislators had little faith that Nautica would remain. Now their goal is to help displaced workers.

“It’s one of those things we’re not going to be able to turn around” because it is less expensive to do business in the southern states, Savage said. “And that’s the facts of life in Maine.”

A company press release sent out Tuesday announcing the plans to close the Rockland site stated that its relocation was an effort “to further consolidate operations.”

Some published reports indicated that transportation costs and the facility’s inability to handle future growth were reasons for moving south. Shannon Froehlich, vice president of corporate investor relations in the company’s New York office, said Wednesday, however, that Nautica officials are saying only that the decision was based on wanting to “further consolidate operations.”

Froehlich did not know if Maine was considered two years ago when the southern states competed for the $40 million distribution center. She did note that the Virginia facility is much larger than Rockland’s distribution center. The Virginia center has 500,000 square feet of business space. She did not know the size of the Rockland facility.

Last month, Virginia Gov. Mark Warner announced that Nautica would expand its distribution presence in Henry County’s Patriot Centre, creating 150 jobs through a $5 million investment.

One of the ways Virginia lured Nautica to build there was to offer a $1.5 million grant to Henry County to help with site preparation. That amount was matched by the county, Jill Lawrence of the Virginia Economic Development Partnership said Wednesday.

The textile industry had been hit hard by layoffs, Lawrence said, leaving behind many skilled workers who readily could go to work for Nautica.

Nautica also received a helping hand in the form of $450,000 from the Virginia Department of Transportation’s industrial access road funding assistance program to create a road to the facility, according to spokesman Bill Dandridge.

The state’s Department of Business Assistance offered work-force training services and its Department of Housing and Community Development was willing to give the company enterprise zone credits.

According to Tamra Talmadge-Anderson, a spokeswoman for Virginia’s Housing and Community Development Office, Nautica has looked into the zone credits, which offer many different benefits at the state and local levels, but she did not know if the company actually had received assistance. For example, the office gives grants for creating employment opportunities.

Maine, too, has provided the clothing distributor with economic incentives since 1939 when a group of investors helped build a four-story factory warehouse on Camden Street to run its manufacturing business in Rockland.

In more recent years, the company received a $750,000 tax-exempt municipal bond from the Finance Authority of Maine, as well as a $14 million financing package for an expansion in 1995.

Around 1995, the city secured a $400,000 Community Development Block Grant to help with site work at the industrial park, where the company wanted to expand, and a $13 million tax increment financing deal that was supposed to span a 15-year period. To date, the city has rebated $1,337,048 in taxes to Nautica through the TIF arrangement, according to City Manager Tom Hall.

Nautica met its responsibilities for receiving assistance from the state, Commissioner Steven Levesque of Maine’s Department of Economic and Community Development said Wednesday, by creating the jobs it promised.

“But, that’s not to say I’m happy with this decision,” he said, noting that the company received incentives from both the city and state, “and then they decided to leave us.”