AUBURN - No matter what the city economy has been like over the past five years, there is one industry thriving in Auburn and across the country.

Consider that for every major plant closure and layoff since 2002, a chain retail pharmacy store has opened its doors somewhere in the city. They've done it without tax breaks or incentives that typically accompany other types of development. Instead, an aging population with a growing need for prescriptions is fueling the boom.

Walgreens plans to open about 550 stores nationally in the next fiscal year. At that rate, the chain cuts red-tape on a location once every 18 hours.

Walgreens plans to open its second city location at Genesee and Columbus streets this July. Competitor Rite Aid won't be far behind.

“There are benefits to the tax base, there are benefits in terms of jobs,” said Steven Lynch, executive director of Cayuga County economic development.

The average Walgreens employs about 25 people, including higher-salaried pharmacists. The proliferation of chain drug stores across the county and in upstate New York has forged some favorable economic bonds for contractors and developers, as well.

The Buffalo-based Ellicott Development Co. has worked with Rite Aid for more than 20 years. The company is in the preliminary planning stages for a freestanding pharmacy near Genesee and Columbus streets that would replace a nearby plaza store in Auburn.

“They're certainly one of our most important customers,” Ellicott project manager Corey Stewart said.

For at least the past few years, Ellicott has kept a perpetual portfolio of projects going for Rite Aid. At any given time, there are between four and six projects in various stages of development.

The buildings, which are often relocations from plazas, cost between $2 and $3 million each to construct. Stewart said his company tries to work with local contractors in the New York and northern Pennsylvania region where it builds, though all the work is bid out.

The Auburn project is about two to three months away from city Planning Board approval, he said.

But some experts say there are drawbacks to chain pharmacy development, as well, at least in terms of economic impact.

“It's primarily circulating money that is already in the community, it's not really bringing any new money in,” said Lynch, who also pondered the life expectancy of pharmacy buildings and what can be done with them if a chain leaves the market.

The pharmacies are moving from shopping centers to standalone buildings based on complex profit per square foot formulas and a customer base that expects conveniences like drive-thrus. Since 2002, Kinney Drugs, Rite Aid and Walgreens have each added or plan to construct two stores each in Auburn, for a potential total of six buildings by the end of 2008.

The life-expectancy of a Walgreens building is 40 years or more, company spokeswoman Carol Hively said.

Cayuga Community College associate economics professor Bill Prosser believes the city is close to the

saturation point and the drug store research teams know exactly what that point is.

“It seems like there's too many, but that's really not the case,” Prosser said. “Even though we're not gaining population, the people that live here are using more prescriptions.”

Even if a chain miscalculates and fold a store within a decade or two, the corners they crowd are statistically too hot to stay vacant for long, Prosser said.

The continued success of the pharmaceutical industry suggests there's plenty of profit to go around. The chains often set up shop at the same corners.

A former Eckerd store built in 2004 at Grant Avenue and Standart Street was recently converted to a Rite Aid facing Walgreens, which was constructed in 2006. A similar scenario is shaping up at the corner of Genesee and Columbus streets at the west end of the city, where both chains have plans for 15,000-square-foot stores.

“Our preference is to be on the corner at a major intersection,” Hively said.

Likewise for Rite Aid, which plans to build between 800 and 1,000 stores nationally over the next five years.

“It's not a decision we take lightly when we decide to open or relocate a store,” Rite Aid spokeswoman Ashley Flower said. “We want to be convenient and accessible.”

That includes research of everything from traffic patterns to patron preferences. Hively added that proximity to medical treatment also factors into location decision.

While Rite Aid has focused on its expansive existing market, which covers most of the east coast, Walgreens has rotated its growth areas around the country. Walgreens strategy currently involves smaller, essentially untapped markets where chain pharmacies can thrive based on need alone.

From 1992 to 2002, the number of prescriptions per person has jumped by about 45 percent and the older the population grows, the more they use.

“The biggest reason for the growth is due to the aging of baby boomers,” Hively said. “As they continue to age and people live longer, that's increasing prescription drug sales.”

Sales that count for about 60 percent of Walgreens business and numbers are similar for competitors, according to federal filings.

Then there's the proliferation of lifestyle drugs consumers take to relieve less urgent medical symptoms. Major drug companies now research new problems to treat - sleeplessness, dry-eye and sexual impotency, to name a few - just as thoroughly as they create the drugs, Prosser said.

The markup on drugs that most people pay only a small percentage of through copayments is handsome - around 30 percent. Nationally, it's a multi-billion-dollar industry that shows no signs of slowing down, Prosser said.

Staff writer Shane Liebler can be reached at 253-5311 ext. 248 or shane.liebler@lee.net