Hays rebounding from loss of major employers

By JOSEPH GALANTE

Hays Daily News

Four major businesses in Hays closed in 2004, including the county's then fifth-largest employer and the town's fourth grocery store.

Two closings within a week of each other left hundreds of residents jobless in June, sending the county unemployment rate to 3.6 percent — significantly higher than the mid-2 percent unemployment rate Hays traditionally experiences.

The sagging market, however, was quickly offset by new jobs and and confidence of more to come. In September, N.E.W., a communications company from Virginia, moved into a 43,000 square foot building vacated by Sykes Enterprises, the county's once fifth-largest employer. At the same time, a developer approached the city with his intention of opening a Home Depot by August 2005.

By the end of the year, Hays labor market looked to be back on the right track. But the first part of the year wasn't one even an optimist could smile at.

In February 2004, Sun Mart supermarket closed, leaving 40 people unemployed and the town with just three grocery stores — two Dillon's and a WalMart Supercenter.

The building at 2704 Vine has been empty for more than a year, a factor that quickened its next-door neighbor's financial nosedive.

ALCO, which had shared a lot with Sun Mart, closed in September 2004. ALCO had been in Hays for 72 years, but couldn't hang on with increased competition from Wal-Mart and being isolated in the Vine Street lot.

“The last couple of years have not been good to us,” said Dean Van Horn, vice president of ALCO's western division, which employed 25 workers in Hays.

“One of the big challenges here has been the loss of a big anchor next door.”

The declining financial situation, coupled with the fact that the company's lease would expire at the end of the year, precipitated the decision to close the store.

The biggest hit to the economy in 2004 came during a one-week period in June. On June 8, Hays International Mailing Co. unexpectedly announced to its employees that it had no more money.

The mailing company had relied heavily on work contracted with Brickmill Co., a New Hampshire marketing company that provided them with steady work over the last four years. Brickmill Co. had lost two of its biggest clients in recent months, putting a squeeze on the Hays mailing company.

Hays International Mailing Co. officials said if Brickmill Co. had made them aware of their financial situation, they would have gotten through the crunch.

But the company apparently had been struggling for the last few years. Heart of America Development Corp., which owns the building where the mailer operated, sued in 2001 seeking to evict them and collect $97,000 in unpaid rent.

The mailer caught up on the rent a few months later. But it was clear the company wasn't doing well. That year, the number of full-time employees dropped by more than half, from 110 to 50.

Days after the mailing company closed, Sykes Enterprises followed suit — a move announced by the company six months earlier. At the peak of its employment in 2000, Sykes had 550 workers. Although the company would not say how many workers it had when it closed, the county estimated that 370 workers were there.

Sykes, a communications company from Florida, opened the Hays call center in 1996. At the time, the city and county, as well as private investors, paid Sykes $2 million, provided tax exemptions and free land and extended water and sewer lines to their building on the southeast corner of town. It soon became one of the largest employers in the county.

The company was closing many of its U.S. offices, including one in Manhattan and opening up new centers overseas.

Sykes' closing shocked the county's labor market, driving up the unemployment rate.

But just months after Sykes closed, N.E.W. bought the empty building. Since October 2004, N.E.W. has hired 260 workers. It plans to bring that number to 400 this year.

The Hays branch is the sixth call center for the company, which grew from a garage-run business to 2,500 employees 21 years later. It serves more than 150 million customers nationwide.

The facility officially began taking calls Oct. 4, answering product performance and operational questions for DirecTV customers across the nation.

N.E.W. handles consumer concerns for clients that offer products such as consumer electronics, household appliances, power tools, fitness equipment, jewelry and HVAC equipment. N.E.W. received $250,000 in cash incentives from the Ellis County Commission.

For 2005, two other major openings are expected. In August, Home Depot, the world's largest home improvement retailer, plans to open. Crews broke ground on the site north of I-70 in November 2004.

In the downtown area, Liquid Bread Brewing Co. and Gella's Diner are slated to open in May.

The brewery has been billed as the forefront of the downtown revitalization project. Construction has been repeatedly delayed due to investment goals not met.

When open, the brewery will have 10 different beers on tap and the diner will offer a unique twist on typical Midwestern food. Two-hundred fifty diners will be able to watch the brewery hops from where they eat and owners are hoping it will become a culturally applauded showcase of the town

Reporter Joseph Galante can be reached at (785) 628-1081, ext. 139, or by e-mail at jgalante@dailynews.net.