YA to review facility options, may close operations

Young America, LLC. is in the process of evaluating options for selling all or part of their 166,000-square-foot warehouse and office space. (NYA Times staff photo by Adam Gruenewald)

Young America, LLC. is in the process of evaluating options for selling all or part of their 166,000-square-foot warehouse and office space. (NYA Times staff photo by Adam Gruenewald)

by ADAM GRUENEWALD
NYA Times

After 40 years of business in NYA, Young America, LLC (YA) is in the process of exploring other facility, space and location options.
As part of a long term facility strategy, YA’s board has recently approved to engage CB Richard Ellis Group, Inc. (CBRE), a national real-estate broker headquartered in Los Angeles, to review space needs and options, which may include an outright sale or lease of the long-term YA headquarters in NYA.
The reason for the change, according to a press release, comes from program growth in the web, social, email and mobile sector.
“We have seen a major shift in the last five years from physical rewards like checks and goods to digital rewards such as cards,” said President Joe Custer in the release. “Consumers love the instant gratification. While those rewards require us to maintain cutting edge technology and security measures, it is largely managed and operated in the Cloud (an online data center with widespread access). Even when we do maintain physical inventory for a brand, the footprint tends to be modest. We simply don’t need large-scale warehouse space in today’s market.”
The current 166,000-square-foot facility in NYA offers a combination of both 44,500-square-feet of office and 121,500-square-feet of warehouse space.
Human Resources Senior Director Janet Fahey said a timeline for a decision is based on whether an interested party could be found, but they could start promoting the property as early as next week.
“Basically, they’ll look at the type of business we have, which has become primarily digital,” said Fahey. “We may need a small presence for minimal client inventory, but I don’t foresee that portion of our business growing again.”
YA currently has 20 employees in the marketing division in leased office space in Edina, while about 80 employees work in the NYA location in areas such as warehouse packaging and shipping, client services, administrative and leadership positions. Of those 80, about eight work in the warehouse.
Employees were shared the news last week and YA has also reached out to city officials and the school district with the developments.
“They are understanding, but there is also concern,” Fahey said of the reactions of employees, who live both in NYA and Edina and the surrounding area. “A lot of them would like to stay local.”
Even with the lack of need for the warehouse space, Fahey said there is a possibility of consolidating with the Edina group in another location.
“If we do have an interested individual or party to buy all of the facility, we would look to find a location for all of our employees,” Fahey said.
Understanding the potential economic impacts, NYA City Administrator Tom Simmons said the city is working with YA.
“We are doing anything we can to assist them and either get them to leave some jobs here or, if that’s not the case, looking for someone to buy the building and bring jobs in,” he said.
Simmons cautioned that the process could be lengthy, but said he does hear from outside business looking for space on occasion.
“There are a number of businesses that would buy an existing building rather than building new,” said Simmons. “Depending on the type of business, [existing space] could be attractive or not attractive.”
While NYA has both vacant land in the new industrial park and, maybe now an existing space, there is some concern if YA were to close their operations in NYA.
“We never want to lose jobs,” he said. “If those jobs can be replaced with other jobs, and more jobs, that would be great.”
YA started as Dile Corporation in 1972, comprising four employees, two clients and one 19,000-square-foot building that served as the combined corporate offices, warehouse and shipping facility, and has grown into one of the largest engagement marketing and fulfillment agencies in the country. For details, visit www.young-america.com.

Contact Adam Gruenewald at adam.gruenewald@ecm-inc.com.

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