Coupon printer stays in Pinellas

Cox Target Media, which does the Valpak mailings, will build a printing plant, not near Atlanta, but on an old sod farm in northern St. Petersburg.

Published July 28, 2004

ST. PETERSBURG - A week after Capital One announced it would shut its 1,100-employee office in Tampa, a major Pinellas County employer said Tuesday it has decided to stay put.

Cox Target Media, the company behind those blue Valpak coupon mailings sent to millions of American homes, said it recently considered moving its printing operations to a site near Atlanta, home to parent company Cox Enterprises Inc.

But after considering a number of factors, including financial incentives from state and local agencies in Florida, the junk-mail company signed a deal with developer Grady Pridgen to build a state-of-the-art, 500,000-square-foot printing plant on a former sod farm in northern St. Petersburg.

CEO Bill Disbrow said he hopes to begin transferring work to the new facility by late 2006. Upon completion, the company will shut down its Largo and North Carolina plants, each of which employs about 430 hourly workers. Most Largo employees are expected to make the move, although they will need to complete a retraining course to qualify as operators of the new, high-tech production system. Cox expects to employ about 530 people at the new plant.

Net gain for Pinellas County: about 100 jobs with a projected average salary of $42,671.

Net gain for St. Petersburg: about $1.1-million in annual tax revenue.

Net gain for developer Pridgen: a tenant, the first, for a 130-acre site he bought in 2002 for $4.9-million.

Net gain for Cox Target: a smaller work force made more productive by new machinery.

Ron Barton, head of St. Petersburg's economic development office, said the bigger story might be that Cox, with annual revenues of $200-million to $300-million, was persuaded not to leave town.

"We avoided one of those Capital One articles, which could've easily been the case," he said.

Disbrow said he worked with city officials, members of Pinellas County's delegation to the Legislature and Gov. Jeb Bush's staff to secure certain incentives.

Under the state's Qualified Target Industry program, Cox will receive $3,000 in corporate income tax rebates for each new job it creates. The rebates will be spread over six years. Eighty percent of the money will come from the state, the rest evenly split by Pinellas County and St. Petersburg.

Cox will receive an additional $2,500 for each job created under the state's brownfields program. City officials designated Pridgen's sod farm a brownfield, or troubled environmental area, on July 15, the same day they endorsed Cox's Qualified Target Industry proposal. Though the land is not environmentally problematic, the designation costs St. Petersburg nothing; state funds will be used.

In addition, St. Petersburg has applied for a $1-million state grant to build an access road to the Pridgen property. And with help from Southern Strategy Group, a Tallahassee lobbying firm, Cox has applied for additional state incentives based on both job creation and capital expenditures. Disbrow said the investment credits would be worth much more than the Qualified Target Industry incentives but require an act of the Legislature.

St. Petersburg Mayor Rick Baker said he would do "everything in my power" to help Cox get those and other incentives it might seek. "I first met with Bill Disbrow at least a year ago on a lot of different issues: the QTIs, the brownfields designation," he said Tuesday while vacationing in North Carolina. "I would describe it as a great move for Florida and a terrific move for St. Petersburg."

Cox expects to invest about $40-million in its new plant and an additional $135-million in high-tech equipment. Disbrow said the company's printing process, which has not changed much since its founding in 1968, will be more productive at the new plant, even with fewer employees overall. At capacity, he expects to be able to produce 54-million coupons per year, up from 24-million.

Currently, for example, envelopes and coupons are placed in storage twice or more between the times they are printed, collated, stuffed and mailed. The new process will avoid such warehousing.

Machines that now handle up to 48 coupons per envelope - mailings with more than 48 coupons must be run through twice - will be replaced with ones that manage 100 or more.

Disbrow said the company is bigger than its three largest competitors combined and tries to increase its revenues at an annual rate of 10 percent. A network of more than 200 sales offices, most of them franchisees, sells ad space on Valpak coupons. Cox's income comes from sales to national clients and sales to local clients via company-owned sales offices, and from wholesaling ad space to its franchisees.

Though Cox's printing operations are moving to St. Petersburg, its graphics, sales, administrative and executive staff will remain a 10-minute drive away in their separate building in Largo, or at least until the company's lease is up around 2010. Cox has an option to lease an adjacent parcel to its 20-acre St. Petersburg site and build a corporate headquarters on it.

Disbrow said the financial incentives Cox applied for were "not that critical" in its decision to stay in Florida. More important was the desire not to uproot employees. It would have been hard for Disbrow to hold his executive team together if Cox had moved to Georgia, for example.

Barton addressed the same issue.

"There's a lot of debate in the economic development community as to the role that incentives play" in relocation decisions. "It certainly was a factor (for Cox), because we spent a fair amount of time discussing the terms of it and the amount they would qualify for.... Was it a final determining factor? Probably not.... The incentives are things that, I think, are icing on the cake. They help."

Pridgen said he has permission to build up to 2,500 residential units on his sod-farm site and hopes some Cox employees will rent apartments or buy condominiums there. "We're trying to build a live-and-work environment, where people don't have to drive," he said.

Terry Loebel founded Valpak in 1968 with a mailing to Clearwater households. A group of investors purchased it in 1985, then sold it to Cox Target Media in 1991.

COX TARGET MEDIA INC. PRODUCTS: Valpak, the direct-mail envelope of coupons, and Solo Values, a customized mailing. REACH: Valpak goes to 40-million households each month. WORKFORCE: 1,800, including part-time and temporary workers. About 1,000 in Largo. OPERATIONS: More than 200 franchise sales offices around the country, and printing plants in North Carolina and Largo, where the company is headquartered. (The North Carolina plant will close.) Annual sales between $200-million and $300-million. ORGANIZATION: Owned by Cox Newspapers, a subsidiary of Cox Enterprises Inc. of Atlanta.

- Times staff researcher Carolyn Edds contributed to this report. Scott Barancik can be reached at barancik@sptimes.com or 727 893-8751.