Fresh from buying Harrisburg distribution center, SuperValu plans sale
A month after announcing a return to Harrisburg to operate a distribution center, grocery giant SuperValu Inc. said Tuesday it plans to sell its recently acquired facility in the capital city along with seven other warehouses it owns.
The deal does not mean SuperValu has changed its mind about Harrisburg.
The Minnesota-based company plans to sell the distribution centers — a deal expected to fetch $445 million after taxes and closing costs — and then lease the facilities back for 20 years. The company will have five options for five-year renewals. The other seven centers are in California, Florida, Illinois and Wisconsin.
SuperValu spent nearly $37.1 million last year to buy the 750,000-square-foot distribution facility in Harrisburg, according to Dauphin County deed records. The company's total investment announced in March is $69 million, which includes the tab for renovations.
The buyer, CF Grocery Distribution Propco LLC, has agreed to cover an additional $20 million expansion at the Harrisburg facility, officials said.
SuperValu plans to hire at least 350 people over the next three years for the Harrisburg facility, which will serve customers in the Northeast. Some of those workers will come from Denver, Lancaster County, as the Dauphin County facility will assume the operations of the company's facility there, officials have said.
As part of the Harrisburg deal, SuperValu received funding from the state Department of Community and Economic Development, including grants totaling more than $900,000 for employee training, according to the state.
Mark Gross, the company's president and CEO, said in a statement that the deal allows SuperValu to pay down debt. Following the sale, SuperValu will continue to own more than 13 million square feet of real estate.
The company distributes groceries to more than 3,300 stores across the country, including more than 3,100 independent and franchise grocers. SuperValu also owns more than 100 retail grocery stores operating under three banners: Cub Foods, Hornbacher's and Shoppers.
Cub stores are in Illinois and Minnesota, while Hornbacher's is in Minnesota and North Dakota. Shoppers is a chain in Virginia and Maryland.
The company announced it is trying to sell another chain, Shop 'N Save and its related Shop 'N Save East stores. The Shop 'N Save stores are located in Illinois and Missouri, while the East stores are in West Virginia, Maryland, Pennsylvania and Virginia.
SuperValu already has agreed to sell most of its Farm Fresh stores, with plans to sell off the entire chain. Farm Fresh has stores in Virginia and North Carolina.