AVON LAKE - State and local officials hope to encourage an Avon Lake mail-order pharmacy to go ahead with a $5 million expansion that would add 200 jobs over three years.
Government agencies are preparing to offer tax and other incentives worth "something less than $2 million" to Immediate Pharmaceutical Services, said Michael Stanek, an Avon Lake at-large councilman.
The package would include $98,000 in income-tax rebates from the Lorain County city to secure the expansion, said K.C. Zuber, the city's mayor, who said he did not know exactly how much the state might contribute.
Zuber received word from Ohio officials in early June that IPS, as the company is known, could increase its presence in the city if the company received an expected contract to handle prescription services for some state employees. But at least one other community was competing for the proposed larger operations.
"A city in Alabama also bid on getting IPS to move there," Stanek said. As often happens when companies announce possible expansion plans, state and local governments began battling over which locale could provide the most incentives.
IPS formerly was a unit of Medina-based Discount Drug Mart, which sold the pharmacy-benefit manager in September. The buyer, PBM HealthExtras, paid $40 million.
Not long after the purchase, HealthExtras chief executive, David Blair, said the Maryland-based company intended to expand the IPS mail-order fulfillment center in Ohio. HealthExtras also operates a retail pharmacy network of more than 60,000 participating drugstores around the country.
Any expansion "would be great for Avon Lake and for Lorain County," Stanek said. Zuber said Stanek and other council members would vote Monday, just before the legislative body's five-week summer break, to authorize that the mayor continue negotiating with IPS. "I'm here to help them with anything they want," he said.
A spokeswoman for the Ohio Department of Development said the state has offered an incentive package but would provide no further details about a deal still under discussion. Other sources said the department is scheduled to meet in late July to consider the exact scope of any incentives.
The results Zuber hopes for include these potential benefits for his city:
Jobs would increase from the current 90 to nearly 300 over 36 months.
Average wages at the fulfillment center would be about $21.50 an hour.
The income tax revenue from the additional jobs would, in time, add $134,000 a year to the city's budget.
For the first five years of IPS' expansion, though, the company would benefit from a 20 percent reduction in income taxes, reducing Avon Lake's take by $98,000 over the period.
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