BY JOHN ECKBERG
The Cincinnati Enquirer
FAIRFIELD -- For several weeks, speculation over the possible sale of Mercantile Department Stores Co. Inc. was a conversation topic in hallways and at water coolers at the retailer's sprawling corporate headquarters on Seward Road.
On Monday, the conjecture turned to reality as worried employees learned that Dillard's Inc. was buying the company.
Fearing retaliation if they spoke openly, several employees heading to lunch Monday declined to talk publicly about the sale, which has left the future of Mercantile's headquarters and its 1,000 jobs an unanswered question.
"People are really upset as far as their job stability that the company is being sold," said a Northside resident. "The new owners will probably keep some people and get rid of some people.
"Right now it's a big question mark," the worker said.
The worker said employees were anxiously waiting this afternoon when Dillard's executives are expected to tour the headquarters.
"The general feeling is wait and see," the worker said.
The mood in Fairfield City Hall was also guarded Monday. The Mercantile facitlity, a single-floor former warehouse converted to 280,000 square feet of office space when it opened in 1994, is a focal point of Fairfield commerce.
Employees direct more than $700,000 annually in earnings taxes to the city - about 5.5 percent of Fairfield's annual earnings-tax take. If Dillard's shut the headquarters, Fairfield will be scrambling, officials said, but the city will not be desperate.
"Five percent is significant," said Jim Hanson, finance director for Fairfield. "It is not going to make or break the city, but we would need to consider that in future budgeting."
At the time of its headquarters' opening, the company made the city a $40 million commitment in the building, its furnishings, computers and office equipment, said Tim Bachman, planning director for Fairfield. The city in turn gave the firm a 100 percent real and personal property tax abatement that would last until 2002.
The commitment of cash from the company to the community extents well beyond City Hall. Mercantile/McAlpin is a prime name on the Fire Arts Fund list of donors, and its executives have served on arts boards.
Mercantile sponsored the Cincinnati Symphony Orchestra New Year's Eve Gala and was the presenting sponsor of the 35th anniversary gala of the Cincinnati Ballet, an event held earlier this month.
"Typically, locally headquartered companies have been more responsive, and Mercantile has been an increasingly supportive corporate citizen," said Mary McCullough Hudson, Cincinnati Institute of Fine Arts executive director.
Matt Mattingly, director of resource development for United Way Butler County, said the company has a solid charitable track record. "They run campaigns for charities all year long. They have a committee of employees that reviews charities. And any employee with a charity they like can bring that charity in and run a fund-raiser," he said.
In 1997, more than $145,000 was raised from Mercantile and its employees in a campaign shared by United Way Butler County and the Cincinnati Community Chest, he said.
"They are located in Butler County but felt an extreme allegiance with Cincinnati," Mr. Mattingly said. "They felt that since all their stores were in Cincinnati -- where their revenue came from -- they would focus on Cincinnati."
Fairfield Mayor Robert J. Wolpert Jr. said the city learned of the deal in a press release Monday morning, and that it was premature to speculate about the future of the Seward Road campus.
"My guess is they're going to make their decision, and I'm not sure we'll be a part of it," he said. "If they want us to participate in any way, shape or form, we'll be available."
The best possible outcome would be for Dillard's to assume operations at the complex with few employee dismissals, but should a closure occur, Mr. Bachman said, the city would aggressively market the complex to a new tenant.
The prospect of the Tristate losing a corporate headquarters has implications far beyond Fairfield.
"Certainly we're disappointed to see the company disappear, and up to a thousand jobs leave the Cincinnati area," said Cincinnati City Manager John Shirey.
Joe Kramer, a vice president with the Greater Cincinnati Area Chamber of Commerce, said it is always a blow not only to the business community, but also the region to see the exodus of a corporate headquarters.
