Ahold packaging facility to shift meat cutting out of stores

Lower Allen: Highway fixes bring more industry to twp.

September 07. 2012 3:00AM

Jim T. Ryan

An aerial photo of the site along Lisburn Road (top) in Lower Allen Township, Cumberland County, shows preparation under way for Ahold USA’s meat-packaging facility, which is set to open in 2013 and create more than 800 jobs. The facility will prepare beef and pork for sale in the company’s Pennsylvania and Maryland Giant Food Stores. Photo/Submitted

Yetter Court. It's a short stub road in Cumberland County off St. Johns Road.

For years, the 38 acres in Lower Allen Township sat vacant even with other businesses nearby, including a terminal for New Jersey-based trucking company NEMF less than half a mile away.

Today, construction workers are installing the infrastructure that will support a new meat-packaging facility for Ahold USA and Kansas-based Vantage Foods US.

In May, Lower Allen's commissioners approved the construction of the 163,650-square-foot facility. Last week, Middlesex Township-based Ahold said it would open the facility in 2013, creating more than 800 jobs preparing and packaging beef and pork for its Giant Food Stores in Pennsylvania and Maryland. The Maryland stores are operated under the Ahold's Giant Landover division.

Changing grocery industry

Ahold's decision to locate its meat-packaging facility in Lower Allen Township was part of a four-year project to move most of its beef and pork cutting out of the stores, so that staff there can focus on customer service, company spokeswoman Tracy Pawelski said. It's also a good way for the company to improve its business model as it grows.

"By obtaining fresh beef and pork products from this facility for the Giant Carlisle and Giant Landover divisions, we can control the supply chain, help to reduce waste, enable the stores to focus on delivering best-in-class customer service and improve performance of meat departments," she said.

Ahold's Giant stores continue to grow their business and expand regionally. Giant has acquired 40 stores through two acquisitions worth $146 million since 2009, including the purchase of 15 Genuardi's Family Markets in the Philadelphia area this year. The stores were fully converted to the Giant brand by July, and the company hired more than 1,000 people to support the expanded hours and product offering, Pawelski said.

Today, Ahold has 198 Giant and Martin's stores in Pennsylvania, Maryland, Virginia and West Virginia. It has 43 locations in the midstate. Giant's Carlisle division alone employs more than 30,000 people in 2012, according to Business Journal records.

"We are very fortunate that our divisions continue to grow sales and market share in a very competitive environment where customers have scores of choices for their food shopping," Pawelski said.

The reduced amount of in-store cutting and preparation will not mean the end of the meat counter, she said. Many stores will continue cutting for special requests and offers. Responsibilities and roles will change, but it won't happen anytime soon, she said.

"Across the industry, many products in the meat department have moved from in-store production to packaged, fresh options, beginning more than 20 years ago with poultry," she said.

Destination: Lower Allen

Lower Allen Township is becoming a destination for development.

Arkansas-based Wal-Mart Stores Inc. is seeking to put a store on the site of a former car dealership on Hartzdale Drive near the Capital City Mall. It has preliminary plan approval but must get the township's final nod before construction can begin.

A 284-apartment residential complex, known as Meridian on the West Shore, is under way on Lisburn Road. That's just the first of three phases, but the township hasn't seen final plans for the rest, said H. Edward Black, president of the Lower Allen Township commissioners

Much of the West Shore has seen increased development this year.

"The community at large is a good community, a welcoming community, and I think people are starting to realize that it's not only a good place to live, but a good place to do business, too," said George Book Jr., the interim president of the West Shore Chamber of Commerce.

Improvements to highways and interchanges over the years have only helped bolster business on the West Shore, he said.

One of the largest projects since 2007 was the reconstruction of the interchanges and exits on routes 15 and 581 in Camp Hill. With that work completed, companies and residents have easier access to the center of Lower Allen, the same area Ahold chose for its facility, Black said.

"I hope that we do see some quality industrial development," he said. "Industry brings jobs, which brings economic development and income."

Rare tax-abatement request

Middlesex Township-based Ahold is seeking 10-year tax abatement from Lower Allen Township, Cumberland County and West Shore School District under Local Economic Revitalization Tax Assistance laws, or LERTA, for the facility at 2628 Lisburn Road, which is next to the Camp Hill state prison.

LERTA reduces a company's taxes for development, then increases them gradually over duration of the agreement until it's paying the full rate.

Ahold's application is the only official LERTA request the township has ever received, Manager Thomas Vernau said. But the subject has been discussed at least two other times in the past 16 years.

California-based Panattoni Development entertained the idea of LERTA with the township commissioners to build on the same lot as the meat-packaging facility, said H. Edward Black, president of the Lower Allen Township commissioners and president of engineering firm H. Edward Black and Associates.

Prior to that, you have to go back to 1996-97, when a company wanted to buy residential properties to build a warehouse, Vernau said. When the developer couldn't acquire all the properties, the proposal crumbled, he said.

Black said he favors giving the tax abatement to Ahold but is unsure about the 10-year time frame.

"I'd like to see the LERTA have the shortest impact as possible on us," he said.

Through the years, Black said, he's warmed to the idea of using LERTA as a tool to expand the local economy — particularly if the township has properties that could be developed but have not because of their location or perceived deficiencies, he said.

"We have a site next to a prison that's somewhat disabled because of the proximity to the prison," Black said. "I think seeing that developed is important, and we should consider it."

Ahold is willing to negotiate the timeframe for the LERTA and said it would even be comfortable with four or five years, according to its LERTA request letter to the township. The company plans to invest about $70 million into the site.

The township commissioners voted last week to schedule a hearing on the matter for Oct. 8. Commissioner Peddrick Young was the lone dissenting vote. He did not immediately respond to requests for comment.

Commissioner John Titzel said he's waiting until the hearing and wants to learn more about LERTA and its impact on the township before he decides on whether he supports it.