Clayco Realty Group was chosen to do a site search for Payless ShoeSource, Inc., which included three states and over 70 sites. The Brookville, Ohio site was chosen after more than $13 million in incentives was negotiated. The development of this facility brought more than 300 new jobs to Brookville. Clayco Real Estate Services was the design build lease developer for this project.
For the first phase of the Payless facility,Clayco competed for and was selected to develop the entire project – including site selection and incentive negotiation process of a five state area – along with the leasing, financing and land site development. The final incentive package was $6 million plus a 15-year, $100 million tax abatement plus 58 acres purchased at $.12 PSF after applying grants negotiated by Clayco.
As Phase II of the project commenced in the Fall of 2008, the nation’s financial markets had collapsed and very few, if any, deals were being financed, especially in sub-tier markets such as Brookville, OH. Despite the freeze from the lending markets, Clayco was able to produce the necessary capital and bank financing for a $13 million lease necessary to complete Phase II. Additionally, Clayco was able to overcome and avoid certain capitalized lease issues and bank financing requirements by successfully negotiating certain creative outside investment contributions in excess of $3 million by Payless in accordance with various IRS and GAAP regulations.
Overall, the expansion was completed on time and Payless was extremely pleased with the entire development process and outcome considering the financial and capital markets climate, which made it almost impossible to accomplish otherwise.