Tagg Lostigitcs May Move out of Maryland Heights
A $400,000 loan from the City of Hazelwood provides incentives to bring the order fulfillment, warehousing and distribution operations into city limits.
It appears TAGG Logistics is leaving Maryland Heights.
Council had first reading on a bill, which would allow the contract order fulfillment, warehousing and distribution company to move its operations from three facilities in Maryland Heights, to one location at Hazelwood Logistics Center at 372 Hazelwood Logistics Center Drive.
The five-year loan would be funded via proceeds from the city's half-cent economic development sales tax, and Hazelwood City Manager Edwin Carlstrom said a portion of it would be forgivable.
"What we are doing is providing a $400,000 loan of which $320,000 is a no interest loan," he said. "There is a forgivable portion of $80,000 over a 5 year period if they (Tagg) meet all the criteria with job creation, staying in Hazelwood and employee salary levels."
Carlstrom said $40,000 would be forgiven in 2015, and $40,000 forgiven in 2017. The $320,00 loan portion would have to be paid back to Hazelwood on April 1, 2018.
Tagg principal Tod Yazdi said his company would invest $10.5 million in the 400,000-square-foot building and move 37 workers from Maryland Heights to Hazelwood. The process would begin sometime this spring.
Yazdi purchased the business in 2006. He said the company does quite a bit of packaging, kit assembly, POP displays, third party logistics , supply chain management, order fulfillment, outsourced distribution and e-fulfillment.
He said 65 percent of sales is healthcare: vitamins, supplements and medical devises; a 35 percent consumer products.
Tagg has 47 clients, along with a five year compound annual growth rate of 48 percent, which Yazdi said makes the company attractive to be an anchor at the logistics center.
"Our October 2012 sales exceeded the full year revenue for 2007," he said. "The Hazelwood workforce should grow to 50 or more within five years."
"It's been a long process, but this is a growth area and hopefully it'll get bigger and bigger and bigger over time," Carlstrom said. "They are also committing to a building that has been vacant for some time so hopefully it will create some synergy for some new businesses to come."