New buyer for Perdue facility?
When Perdue Farms vacates its chicken-processing plant in Bethel Township in mid-March, company and Lebanon County economic development officials will be faced with a daunting task — selling the building built in 1948 to a modern industry.
Muddying a possible deal could be Perdue's public reason for closing the plant: that it's too old and will cost too much for Perdue to modernize.
But company and county officials said what doesn't work for Perdue could still work for another company in the 62,000-square-foot facility on Route 22 in the Fredericksburg area.
"The facility still certainly is usable," said Larry Bowman, the outgoing president and CEO of the Lebanon Valley Chamber of Commerce. "I could see it being used for processing organic or kosher foods. The facility served a useful purpose, and there will be a buyer for it."
Perdue Farms announced plans earlier this month to close the Booth Creek Natural Chicken plant on or around March 14. The plant closure will leave about 620 people unemployed, according to the company. Perdue also will close a distribution facility in Lancaster County that will affect about 30 employees.
Perdue owns the plant, bought as part of its 2011 deal to acquire Coleman Natural Foods. Booth Creek Natural Chicken is a subsidiary of Coleman.
Julie DeYoung, spokeswoman for Perdue Farms, said the company plans to sell the building, which sits on 20 acres. It has not made a decision on "when or if" the property will be listed with a real estate agent or marketing company or whether Perdue will sell it on its own.
She said there already have been inquiries about the property but would not discuss specifics.
In explaining the closure in a company statement, Lester Gray, senior vice president of operations for Perdue Foods, said the facility would require "significant and costly upgrades, and even then, we would not overcome the age and physical limitations of the facility."
DeYoung said the upgrades would have cost the company "millions" and the building still wouldn't have met Perdue's long-term needs. Perdue also has underutilized capacity at other plants, she said.
"(S)o to make such an investment for a short-term fix simply does not make business sense," DeYoung said, although she said it could meet another company's needs.
Susan Eberly, president of the nonprofit Lebanon Valley Economic Development Corp., said the current focus for county business officials is to educate the employees who will be out of a job in March on what kinds of job-seeking resources are available for them, but the issue of selling the building to a new tenant will be addressed in the coming weeks.
Both Eberly and Bowman said they've heard whispers already of potential buyers for the building, but they would not go into detail.
"Any building would have its challenges," she said. "It just depends on the person interested. Issues for Perdue wouldn't be nearly as crucial to someone else trying to purchase the building."
Lancaster County also feels the pinch of Perdue’s exit
The 30 jobs that will be lost in Lancaster County because of Perdue Farms’ decision to end its Lebanon County operations are small compared to the 620 jobs that will be gone in the Fredericksburg area.
But a consortium of four Lancaster County municipalities still has to figure out what to do with the building in East Cocalico Township that Booth Creek Natural Chicken, owned by Perdue Farms, has used as a distribution center since 2008. As part of the plan to close its Lebanon County chicken-processing plant, it will also close the distribution facility.
The building is owned collectively by East Cocalico and West Cocalico townships and Adamstown and Denver boroughs, according to East Cocalico Township Manager Mark Hiester.
The four municipalities bought the 50,000-square-foot building in 2006 for $3.7 million with the intention of turning it into a community recreation center.
When those plans faltered, Perdue came in as a tenant and paid about $146,000 rent each year for the building at 75 N. Reading Road. Hiester said. The municipalities also get revenue at the site by renting out tractor-trailer parking spaces and billboard space, he said. For 2014, the Cocalico Region Community Park Authority anticipated $9,000 in truck parking rental and $500 from billboard rental, according to its budget.
Perdue informed the consortium it will let its lease run out at the end of April, Hiester said.
Now, the Lancaster County municipalities are looking for a tenant — or buyer — to avoid paying the full $250,000 per year owed on the building’s $3.3 million mortgage held by Ephrata National Bank, Hiester said.
The municipalities have been in contact with the Lancaster County Economic Development Co. about helping to market the building, and Hiester said initial discussions have been positive.
He said he’s hopeful there can be some kind of agreement on what to do with the building in the coming weeks.
“The sooner the better,” Hiester said. “We’re going to get an appraisal done soon. It seems the predominant thought is that we’d like to sell it and get a business in there.”