Loveland waits for answer about Quebecor expansion

It’s been nine months since the city of Loveland and the Colorado Economic Development Commission offered printing company Quebecor World Inc. a package of incentives to expand its Loveland facility.

Still, the company has not indicated whether it will move forward with the project.

In August 2005, the city of Loveland approved an incentive deal that would match a $207,000 package from the Colorado Economic Development Commission for Quebecor to expand. The Montreal-based printer employs more than 240 in Loveland.

“We want them to make a commitment to Colorado,´ said Renee Wheeler, assistant city manager, in a Business Report interview last year.

At the time, Wheeler said the city didn’t expect to hear from the company until February. But February came and went without an answer.

“We were hoping to have more information by now,” Wheeler said, adding that there is no deadline for the company to respond to the offer.

Wheeler indicated that the city is keeping in contact with the company and is waiting for word from Quebecor’s corporate office in Montreal. The company announced on May 11 that it would invest $36 million in a 145,000-square-foot addition to its head office.

Quebecor is not committing to any specific timeline for announcing whether it would expand the Loveland facility, according to company spokesman Tony Ross.

“We are evaluating all of our U.S. printing facilities,” he said, adding that the evaluation is an ongoing process.

Ross had no specific comments regarding any decision to expand the company’s U.S. facilities. As for Loveland and the pending incentives, he said, “It’s certainly part of our evaluation. All factors are taken into consideration.”

The Colorado Economic Development Commission doesn’t hold companies to any time frame for responding to incentive offers at the early stage of the process.

The first step for the state is to approve a preliminary incentives offer a company considering locating or expanding in Colorado, said Jeff Holwell, business development representative for the Colorado Office of Economic Development.

“At that point, it’s not a contract,” he explained, meaning none of the parties involved are held to any stipulations.

The contract is formed when the company commits to a site, but it is not uncommon for that to take a long time.

“Companies have a lot of decisions to make when deciding to make a move like that,” Holwell said. “It isn’t terribly uncommon (for a company to take a long time to accept).”

The funds in the preliminary offer, in the meantime, are earmarked for that company until a decision is made. Holwell said that if money were really tight, the commission might push the issue of a decision on long-outstanding contracts, but that has not happened as far as he knows.

The Loveland incentives package, totaling $414,000, comes with strings, according to Wheeler. In talks with the city, the company estimated it could add 82 jobs by 2008 and another 56 by 2012. Additionally, the average annual wages would be around $45,000.

Wheeler said the company would need to demonstrate that the new jobs would be sustainable in order to receive the incentive.

Quebecor courted the possibility of an expansion after landing a multi-year printing agreement with Dex Media Inc. in March 2005. Quebecor produces more than 200 Dex directories for 14 states. The contract runs through 2014, and the company estimates that the number of directories it will produce during that period will quadruple.

A bulk of the work at the Loveland site comes from Dex. The site produces about 34 million books per year, of which 20 million are Dex directories.

A potential kink was thrown at Quebecor late last year however, when Dex announced a deal to be acquired by rival publisher R.H. Donnelley Corp.

An R.H. Donnelley spokesman said that the company plans to honor all existing print contracts it inherited from Dex. But Donnelley has ties to other printers that might threaten Quebecor’s contracts in the future.

R.H. Donnelley, the Chicago-based publisher, is not to be confused with RR Donnelley & Sons Co., the Chicago-based printer. RR Donnelley, which also specializes in directory printing, operates a Greeley site under the name RR Donnelley Norwest Inc. that employs about 300.

In May, the two Donnelley companies signed a $400 million, multiyear agreement for RR Donnelley to produce all of R.H. Donnelley’s directories. The contract is an extension of a relationship going back more than 15 years.

At the same time, Quebecor’s directory work isn’t tied up exclusively with Dex. In 2003, the company entered into a multiyear agreement with phone book publisher Yellow Book USA to print more than 200 titles annually at several of its U.S. locations, including Loveland. Sales were expected to exceed $70 million a year during the life of the contract.

on Facebook on LinkedIn