In all, Fingerhut had 4,700 employees in Minnesota, the bulk of its 6,000 total employees.
Federated bought Fingerhut in 1999 for $1.7 billion, largely because it appeared to be well positioned in the Internet retail business, given its huge distribution capabilities.
The St. Cloud distribution center was a subject of controversy in the mid-90s when the company insisted the state help the company build a $20-million, 500,000-sf expansion there. A deal was worked out in 1994 for a public subsidy adding up to $4.8 million,including a $1-million grant. The deal included a special measure that allowed the city of St. Cloud to set up a tax increment financing district for the project.
At the time, the company said it would expand in Kansas City if it did not get help from the state.
Minnesota Alliance for Progressive Action, a coalition of labor community and social groups that has been critical of public subsidies to corporations, criticized the Fingerhut deal, pointing out Fingerhut did not deliver the 400 jobs to which the $1-million grant was tied. The company was asked to repay the grant with interest, and it did, says Jay Novak, who was commissioner of the Trade and Economic Development office in 1997 when the subsidy came under attack.
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