Palm Coast Data, once Flagler County’s largest private employer, will lay-off 150 employees–nearly 40 percent of its workforce–and by August leave its home on Commerce Boulevard for the past several decades.
John Meneough, the company’s CEO, said Palm Coast Data intends to keep its remaining 250 employees in Palm Coast, but it’s not yet clear where, and some of those employees may continue working from home, as they have been through the coronavirus emergency. The company is looking for a new home within the city limits, but in space much smaller than the 204,000 square feet it occupies in two buildings on Commerce Boulevard.
Though accelerated in part by the coronavirus crisis, the layoffs are part of a broader restructuring of the company under its Irish-owned parent, while its exit from Commerce Boulevard is the result of a settlement this week of a lawsuit by its landlord–Palm Coast Data’s former owner–over allegations of unpaid bills.
Palm Coast Data is, in effect, getting evicted from the property.
“I think we have about 400 people, there will probably be about 250 people left when everything is done, give or take a few,” Meneough said in an interview with FlaglerLive at his office today. That includes part-timers. Two years ago, a fifth of the company’s employees were part-timers.
The company is outsourcing two substantial operations: both its inbound and outbound mail operations, including the lettershop. The subscription-fulfillment operations at one point before last decade’s Great Recession processed some 12 million pieces of mail for 300 publications. Its diminishment, and now disappearance, is expected to substantially affect operations at Palm Coast Post Office, which had maintained an annex within the Palm Coast Data lettershop.
Those operations are being outsourced, Meneough said, to CDS Global, a Des Moines-based company, some of whose executives have shuttled over the years between there and Palm Coast Data, including Rory Burke, who retired from Palm Coast Data last November. (Burke filed a breach of contract lawsuit against Palm Coast Data last month over unpaid severance.)
The layoffs are an additional blow to the local workforce, already battered by coronavirus layoffs, and to Palm Coast as a city, whose identity has long been closely tied to high-employment, low-impact, environmentally clean businesses like Palm Coast Data.
“I was saddened to hear of the latest news about Palm Coast Data,” Palm Coast Mayor Milissa Holland said today. “As a long time employer of Palm Coast they have made significant positive impacts towards our residents’ lives. We appreciate their commitment to remaining in Palm Coast and city staff are reaching out in a collaborative effort to better understand their immediate and ongoing needs to determine ways we can be helpful during this transition. The city is committed to business retention as one of the strategies of economic development.”
Twelve years ago, the city provided $400,000 in tax incentives and ceded the 70,000 square feet of 11 Commerce Boulevard, which had been Palm Coast’s City Hall, to Palm Coast Data as part of an economic-incentive package to keep the company operating locally. (The company eventually bought the building for $3 million.) Palm Coast Data was in the midst of consolidating operations from Colorado and Ohio into Palm Coast and pledging an increase of its workforce to about 1,700, from 1,000 at the time. Figures filed with the Securities and Exchange Commission over the years show the company never exceeded that peak, its total number of employees declining steadily during and after the Great Recession. The company had to return over $1 million to the state of Florida for not meeting employment benchmarks, and after receiving $3 million in cash in state economic incentives.
“The big mass publishers are gone, you know that, the Times, the Newsweeks, the US News, the Sports Illustrated, all of those, it’s all gone online because people want instant information, instant gratification,” Meneough said. “It’s like I used to tell everybody when I was growing the business. I think there are going to be other opportunities that aren’t even defined today. I remember when I started out on the business, we didn’t have a letter shop, we didn’t even have a call center. I think there’s going to be other things that will grow out of this that will open it up to different market places.” Meneough announced the coming layoffs and realignment to the company’s staff in a letter on Tuesday.
“When I started in the business,” he said, if a publication had a million subscribers, “we’d send out five pieces of mail on an annualized basis. Now it’s way lower than that because people are paying online, they’re paying credit cards that are automatic withdrawals, whatever it is. You’re just not sending the invoices out, and are you sending the renewals? No, whether it’s membership or anything else. So that’s shrinking. There’s still an older population that still likes to get the hard copy. So instead of having a big warehouse and a big space like that, let’s outsource that, and let’s also outsource our front end, but keep our customer care here, which is telephone operations, which is inbound.” The company is looking at means of using artificial intelligence to conduct some of its membership-related operations.
Palm Coast Data had weathered difficulties for much of the past decade as publications shrank or went out of business, though the company around 2018 appeared to have stabilized. That year it was acquired by Studio Media Group, an Irish company, in a complicated deal with its former owner, Amrep Corp. The deal involved a $1 million cash payment and turned Amrep into Palm Coast Data’s landlord: Amrep took ownership of the two buildings on Commerce Boulevard, requiring Palm Coast Data to make rent payments starting at $1.9 million a year, and rising to $2.5 million by the 10th year.
The relationship between Palm Coast Data and Amrep quickly soured, according to court papers.
Last December, Amrep, acting through two local subsidiaries, sued Palm Coast Data over allegations of unpaid rent and other charges, while Palm Coast Data accused Amrep of fraud for having allegedly hidden liabilities when Studio Media Group was buying the company. At one point Palm Coast Data agreed to buy one of the buildings on Commerce Boulevard, but that agreement fell apart, too, triggering the settlement agreement leading to the company’s eviction.
Amrep’s representatives had claimed as recently as last week, in a pair of affidavits (see them here and here), that Palm Coast Data still owed them $1.28 million in past-due charges.
On Monday, the two sides settled out of court, with Palm Coast Data and Amrep agreeing to end the lease at the two buildings on August 15, when Palm Coast Data “shall be evicted and removed from the premises without further litigation,” according to the joint stipulation for final judgment.
“It’s done, it’s done. Period,” Meneough said of both the legal case and of Palm Coast Data’s relationship with Amrep.
The settlement with Amrep is one half of a major development affecting Palm Coast Data. The other is Studio Media’s $7.5 million acquisition on Monday of Darwin CX, which Meneough described as “our database of the future, and fulfillment software of the future.”
Those transitions are taking place when about half of Palm Coast Data’s existing employees are working from home. That’s not going to change much for now. “We’re going to continue that until–your guess is as good as mine when this thing is going to be over with, the virus,” Meneough said. But he stressed that there would not be a period of time when Palm Coast Data would be homeless: it will have found a new location by August.
“Palm Coast Data is an important part of the community, we want to remain an important part of the community. We want to bring other opportunities in here and look for some growth when the world settles down a little bit. Who knows when that will be,” Meneough said. He would not elaborate on his own future at the company, though at 72, and already brought out of retirement to run it after Burke’s departure last year, Meneough is not likely to remain there too long.
“There’s sadness and concern. Any time you have staff change and anything else like that, it’s always tough,” he said. “We’ll try to make it as soft as possible for everybody, because these are not fun times. Not fun times for anybody. And I feel sorry for the 35 million people that declared unemployment for the last what, six, seven weeks. That’s not good, too.”
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Adam says
Seems like every time I read something about PCD it’s laying off this many, laying off that many. Never lived up to their promise to add up to 700 jobs to the city. Very sad. I spent 7 years at this place before I found a career that suits me. Hoping that this economy doesn’t mess that up for me too. I know when I was there we had around 1000-1100 folks there. Sad there isn’t even 25% of that there now.
Land of no turn signals says says
The taxpayers of this city will never recoup money owed by a botched tax incentive repay.Screwed again by a tax incentive grand plan.Remember the small bakery that got a big tax incentive to keep her in business?she took the money closed a short time later and the city went after her for the money and her response was you can’t get blood from a stone.Falls in the category of moldy buildings.
A pissed off PCD employee says
Yeah and then what people like me who were furloughed and REFUSED the ability to work from home, we just dont get an income anymore for a potentially indefinite amount of time? These guys are a damn joke. Of all the things I’ve experienced working there, how bad they treated me and my fellow co workers.. guess I better look to unemployment since, ya know, I was denied the ability to work from home from the start since I dont kiss ass there. I was vocal about the companies disorganized, inconsiderate and underhanded dealings and they refuse to care. This comes as bo surprise to me though I find them to be pretty garbage for laying off so many in a time like this. I hope they feel good about the fact that the people who took furlough and the people who they’re laying off won’t be able to pay the bills anymore.
Another pissed off employee says
Facts. Preach.
Lilly says
I agree with you completely! Worked there, if your not related (many employees are) to a supervisor or buddy buddy with a higher up, even if you work extra hours, it’s still not enough. Pay you crap, expect you to work your ass off while others play. I had filed a complaint with the EEOC for unfair pay because for a fact everyone with the same job responsibilities got paid a lot more than I did. I quit it’s a brutal job
Frank B says
Who are these many employees that are related to a supervisor? I worked there for 20 years and never had a concern. I came into work everyday, worked hard, minded my own business , showed some initiative and never had a problem. If I was so unhappy as some employees, I would have left as there were many other jobs available outside PCD.
Jessie says
The “give or take a few” people that John is talking about have been dedicated employees to this company for years. A lit have 30+ years, 25+, 20 and 15 plus years. They have worked through all the changes and hard times. Worked all the overtime and through this Corona epidemic as well only to be told your not needed anymore. No severance pay, no going away pat on the back, nothing. Just told to work your hardest every day until they close and not telling them when either. I believe these people are a lot more than “GIVE OR TAKE A FEW” PEOPLE!!!
Hmmm says
Saw this coming years ago
Great! says
First sea-ray and now this. Palm Coast has a wide spread BAD reputation for red tape when trying to start a business. Melissa Holland was a liberal Democrat until she changed her affiliation to Republican so she could be elected. The issue is her beliefs and policies are anti-business. Until we get rid of these liberals our opportunities will continue to dissapear.
Wow says
I’m not sure how “liberalism” would support throwing taxpayer money at companies to entice them to stay. That’s called corporate welfare which is the darling of the right.
Good Riddance says
This does not come as a surprise. Worst place I’ve ever worked under the worst leadership I have ever seen. Particularly in the finance department. How’s that postage accounting coming now?? Hehe
Ron says
Such a shame. But typical Palm Coast government and citizens, if it cant be perfect you dont want it. Oh well, the city has no new plans for bringing in another large employer, but Bunnell is doing a great job of adding new businesses. 2 new big employers in the past few months. Enjoy your government officials Palm Coast…… and your total lack of employment infrastructure. It’s what you wanted.
CB from PC says
Like I said earlier…repos and foreclosures and increased need for free food distribution in the wings. Why is it that Palm Coast cannot retain any businesses, or worse, attract new ones? Just look at who and what is running the show and you will have your answer.
Steve says
PCD is Just a Microcosm of the lack of Business Environment not created by the Powers that be in a backward Town run by a bunch of Independent self interests. No way it amounts to anything more than a bedroom City/ Retirement Community and thats OK just quit the Pipe Dreams. It is what it is
Mary Fusco says
Steve, Palm Coast is a bedroom community. Nothing is ever going to change that. I lived in one for 25 years in NY. It is nothing but retail and fast food businesses. Businesses relocate to these communities to pay LESS wages, not higher. If you want to earn higher wages, you need to commute or move to a larger city. I don’t understand why people moving to this area do not research jobs and most importantly why young people have no initiative to move beyond fast food and retail jobs and expect to raise families on these wages. I’s not always possible to work 5 minutes from where you live. My husband commuted 3 hours a day for 25 years to make a decent living. Everyone makes their own choices but they looks to someone to blame for their choice. LOL.
Stephen Metcalf says
I myself, find this news to be devasting too all that are impacted. Yes, the organization may have its issues; however these are jobs that are being lost. I worked there for 8 years and I assume I am fortunate because I did not experience the same experiences that those who comment negativity have. Now if Palm Coast was worried about keeping this business afloat to keep their residents employed.. paying taxes and rents… they really should have pushed this fulfillment company to the local Utility companies for their data and mail processing opportunities Just my opinion…
I feel for all as I have many friends impacted by this.
Stephen
Another pissed off employee says
Company is garbage. Has been the entire span of my tome there. Having people work full time hours with part time titles, refusing people the right to work from home even with a dr. Note stating they HAVE to work from home at this time leaving them with the only choice to take a leave of absence. Holding vacation times over people’s head after they’ve approved it. Giving full time hours and benefits to people who have been there a couple months when there are people who have been there years and are still labeled part time. Let’s not forget the terrible smell of mold and mildew. Plus the lack of concern this John guy has for how many people they will actually fire is disgusting.
native floridian says
Perhaps Ms. Holland will find them a new building & rent free, why not? This county has bent over backwards to keep PCD operational. We taxpayers will continue to foot the bill. Curious where this new building will be!? Then they use the scare tactics of “unemployment” & how lucky the people who work there are to have their jobs haha! Forget about ever getting a raise, even though you have the same job responsibilities the supervisors daughter/son/cousin or one of the “select” few will make up to 3.00 more an hour than you, they play while you work. The remaining employees should walk out, protest or contact EEOC for unfair/discrimination pay practices! Could you imagine what would happen if the CSR’S did not show up for work! The sad part is that there are many devoted employees, they would do everything & anything for PCD & they would never think or could not even imagine they would be “furloughed”, surprise! Smoke & Mirrors…
Honest Truth says
The City of Palm Coast officials needs to answer to its citizens why they can’t get companies coming here? All they get are Mom and Pop small businesses that come and go like the wind. Look around town and see all the empty stores of the strip malls they keep throwing up and this has been going on way before the virus hit the town.
Whoever is involved with bringing businesses to town to employ the none retired people here and there are those people living here, that person needs to be fired for doing a lousy job.
What is your problem City of Palm Coast? Do the job our tax dollars are paying you to do. And, lets also mention all the money Palm Coast ripped the City of off, that was a real joke, you can thank Ex-Mayor Netts for that one.
Stretchem says
I think this company was/is unwittingly siphoning the life out of the other local business opportunities. The postal service in this county is the absolute worst. Nearly all parcels are processed out of county, even if you’re sending or receiving around the corner. PCD is a vortex sucking all of the postal service’s time and resources for the benefit of a single failing entity.
UPS, Fedex, come from out of county. No local processing or hubs. Everything is a day or two behind surrounding counties, and costs 20% more. No large distribution. No truck stops. No train yards. No ports. All this adds up to a bypassed county to certainly not do business in.
Much as PCD has learned, modern business is predominantly online commerce, and successful online commerce needs modern and readily available intermodal transports. Flagler has next to nil. You’re always late to receive materials, and you’re always paying more.
My opinion, good riddens. The county will be better served without that dark shadow lurking about local policy.
Mary Fusco says
What exactly does the Postal Service have to do with Palm Coast Data? In case you haven’t yet figured it out mostly every thing is processed out of country. Practically everytime I call customer service, I get someone in India! I worked at PCD for 12 years. Customer service is the backbone of a company and they treat their CSR’s awful. Nothing more to say.
John R Brady says
The City Officials want to be business friendly? How does putting a ban on Dollar stores square with being business friendly? The only business that is welcomed is real estate development and maybe the fact that Ms. Holland received $ 1,000 from 6 real estate developers in her 2016 campaign might explain what you see going on around you. Also please know, the City is borrowing 20 million to upgrade the sewer system because of increased usage,
We need to tell developers we do not have the capacity for more people at this time.
Also people all over Palm Coast need to take note what is happening to residents of L section as a developer is trying to get a giant payoff at the expense of the residents. Why should you be concerned? You need to be concerned because you could be next. E section could be next if golf course goes bell up,
palmcoaster says
I have to totally agree with Wow above when writes” I’m not sure how “liberalism” would support throwing taxpayer money at companies to entice them to stay. That’s called corporate welfare which is the darling of the right” in a totally controlled red state were they even installed a fraudulent useless unemployment site forcing us to pay tenths of millions for it, that is programmed to denied unemployment to those that lost their jobs! Yes the Mayor switch parties so did Netts before her, to get elected in red FL..can’t blame them for that. Too bad that most embraced the GOP agenda “all for the powerful developers and corporations” and outsourcing that consume our taxes and quality of life. I wish would be different but nope in the middle of a financial crisis when the expert estimates tell that at least local government will see over 25% less revenues they are involved in tens of millions of more planned expenditures in city and county…
Yes Wow you are right if the cities , the county and the rightfully defunct Chamber of Commerce would not have outsourced their print and mailers of all their utilities and media utilized maybe the local economy would not have lost PCD. Even the local hospital were our residents volunteer and use its services , outsource other than assign contracts to local businesses. Greed for outsourcing and other means, is too powerful and also self destructive to America. Sad for all those PCD 150 employees that lost their jobs lets see the effects in PC. Shameful that we live in a red state and they have the nerve to blame democrats for all the misery generated by the GOP in total control.
Judy says
You said it Palm C0aster. There are none so blind as those who will not see. No one should gloat over the downfall of any company, and the loss of local jobs. These are your friends and neighbors. As to the company, one of the most difficult parts of this company was/is the publishers and their requirements. The loss of over 19 magazines at once because the publisher decided to do streaming . Time limits that a CSR has to resolve a customer complaint, and customers who think you have all the time to discuss their ranting. Let’s be a little more understanding and hope this rebuild gets fixed. The company, like any company has good managers and some not so good. At the end of the day it is a paycheck for many. God Speed PCD.