By Cristina Kumka
RUTLAND TOWN — Rutland City will lose money and at least 30 local workers will lose their jobs come April, when J.C. Penney will leave the Diamond Run Mall.
In a statement made on Wednesday, Jan. 7, Rutland Alderman Ed Larson said: “In a lengthy telephone conversation with J.C. Penney Corporate, they advised that April 5 is the closing date. They also indicated that they will provide … workshops for employees to be affected by the closure to assist in transitions to other employment, that severance pay will be provided to those who are entitled to such [full time employees]. They indicated that the current employees will be offered positions at the Berlin Mall store, if there are openings, as well. According to Corporate, the closing will impact some 30 to 35 employees, which differs from what the local manager indicated to me… I was informed that the decision was based on store performance over a several year span.”
The closure would mean the second of three anchor stores in the mall would be gone. The Sears store closed at the end of December 2014.
To Rutland city, with a contractual agreement with mall operators called the Zamias Fund, that means another loss to its coffers.
According to Rutland Mayor Christopher Louras, the mall is required to pay Rutland $100,000 a year to defer any loss to downtown businesses. The money goes into a fund called the Zamias Fund.
In August Louras wrote in a post on social media: “With the announcement that Sears is closing in the Diamond Run Mall, there have been inquiries made regarding the impact on the $100,000 annual payment made to the City’s Zamias Fund.” He explained that because the Sears space amounts to 36 percent of the three anchor stores’ total square footage, the annual payment will be reduced accordingly. “The resulting deferred final payment (equalling $36,000 per year between now and 2019) will be payable to the City in 2022,” Louras wrote.
In accordance with that formula, the city’s annual payment will go down even further — to $41,000 — in 2015 because of the J.C. Penney closure, but a payout to make up for the annual losses is expected in 2022 if the mall doesn’t fill the space again.
Cristina Kumka is a correspondent for The Mountain Times, email@example.com.