Cooperation Lands 500 Jobs

8/13/2009

Rapid growth is driving VXI Global Solutions Inc. to open a new inbound call center downtown this fall that’s expected to employ 500 workers within its first year, possibly twice that number, depending on the needs of the company.

Mayor Jay Williams and U.S. Rep. Tim Ryan were joined Wednesday by political and development leaders to announce that VXI Global Solutions of Los Angeles would establish a new global fulfillment center at 20 Federal Place where InfoCision Management Corp. operated a call center until earlier this year.

VXI plans to spend $4 million to modify the space for its needs, officials said.

In the midst of the worst recession since the Great Depression, Williams observed, the city “is constantly proving itself as knowing how to get things done.”

During the press event at City Hall, the mayor said VXI plans to open its call center Oct. 1, starting with 150 employees, including some 100 inbound sales agents for “a major satellite television provider,“ information technology and human resources staff, and local management. The company then plans to hire 50 additional employees each month, for a total of 500 in the space, he continued. VXI has the option of leasing an additional floor, possibly bringing total employment to 800 jobs.

“If the labor market can sustain a larger number, that would be ideal for us,” confirmed Nick Covelli, VXI senior vice president, sales and marketing, in a phone interview following the event. “All indications are we can easily go to 500 employees, then we’ll see.” If the company is successful in Youngstown and suitable labor is available, VXI could expand 50% to 100%, he said.

At a special meeting last night, City Council approved a development agreement with VXI to provide a grant for leasehold improvements in the space that the city would recover the through the lease. The $600,000 grant is from Community Development Block Grant money secured by Ryan, D-17 Ohio, as part of the American Recovery and Reinvestment Act – the federal stimulus package. Council also approved a five-year lease for the company at 20 Federal, with a five-year option.

VXI plans to spend $4 million to make improvements.

“This is up-front money to jump-start this project and help make the deal go down,” Ryan remarked.

Members of Congress “took a big political hit sometimes” for voting for the stimulus plan, he said, but “I don’t think there’s a taxpayer within earshot of this conversation that wouldn’t think” that the $600,000 in recovery money to create 50 jobs “could be better spent,” the congressman said.

VXI, established in 1998, describes itself as a minority-owned contact center and information technology outsourcer that provides customer service and technical support. It operates 12 call centers in the United States, the Philippines and China.

With a client roster that includes DirecTV, American Express, Google, the U.S. State Department, AT&T and Verizon, the company’s business has tripled in recent years, growing from $34 million in 2006 to more than $100 million last year. The company is projecting 40% growth this year as well as in 2010, Covelli, the senior vice president, said.

“This was an extremely completive process. VXI had a lot of options,” said Walt Good, vice president of economic development, retention and expansion for the Youngstown/Warren Regional Chamber. Youngstown “made its case … this was the place to be.”

The first contact came about a year ago, Good said, through Team NEO, a development organization that markets the 16-county northeastern Ohio region. When VXI’s site consultant visited the area, there were no available “plug and play” facilities -- properties that had been used for back-office functions such as call, he said.

“We looked at a lot of properties throughout Mahoning and Trumbull counties that could be converted for their use, but it wasn’t resonating,” Good said. After InfoCision vacated 20 Federal, “we made the consultant aware that we had plug-and-play space available,” he said. “That re-energized the whole conversation.”

Youngstown was targeted early on, Covelli said. “We have some outstanding employees who hailed from Youngstown,” he said. Over time, those employees kept suggesting the area as a possible location, so VXI officials asked their site consultant to focus specifically on Ohio and Pennsylvania.

VXI officials were “pleasantly surprised” when they contacted local officials, who took a “very similar approach” to their work as VXI does, and were impressed with their confidence and positive attitude, Covelli said. Local officials asked what it would take to make the deal work for Youngstown, and explained the benefits of the area labor pool and higher education system.

“In the downtown area, what you guys have going on, that was really quite impressive,” he added.

In deciding, VXI eventually narrowed to two communities, Youngstown and another one “not too far away” in Pennsylvania, Covelli said, which had a “very aggressive incentive plan on the table [although] probably not as good financially” as Youngstown’s. “But with the availability of the site, the confidence that we had in the labor pool and the attractiveness of the community for bringing several hundred jobs, we felt we could be successful with those three components in place,” he said.

The cooperative attitude of the city, Ryan’s office and the chamber was key in landing the project, Good said, in addition to the incentives offered -- including a state job-creation tax credit. “The company noted that there was a seamlessness between the economic development organizations and a get-it-done attitude. That was the No. 1 item that made this happen,” he remarked.

Hourly sales commissions would be in the $2 to $3 range, bringing compensation for the inbound sales positions to $11 or $12 per hour, Covelli said. The human resources and IT positions would pay between $40,000 and $60,000 annually on average, and “senior leadership for the site will make more than that,” he said.

The use of the recovery money to land the project adds “a lot of credibility” to the city’s request, restated earlier yesterday during an appearance on C-SPAN’s Morning Journal, for $5 million in stimulus funds to support development programs, Williams remarked.

“It just adds credibility to what people though was a publicity stunt,” he said.

George Nelson, Business Journal

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