It's official: New Philadelphia market gets the green light
It's official: New Philadelphia market gets the green light
PHILADELPHIA -- After seven years of discussions, an agreement was finally reached that will make Philadelphia a pre-eminent produce hub by virtue of a new state-of-the-art produce terminal.
"The deal is done," Sonny DiCrecchio, general manager of the Philadelphia Regional Produce Market, told The Produce News after he faxed his signature to the proper parties to finally seal the agreement that paves the way to construct the world's most-modern wholesale fresh produce market here.
Mr. DiCrecchio said that he met with Philadelphia and Pennsylvania authorities Aug. 15 from the afternoon until late at night to hammer out the final details to clear the way for the new $217 million produce market.
Construction of the market will take about 23 months, which would place the opening in mid-2010. A formal groundbreaking with Pennsylvania Gov. Edward Rendell was scheduled to take place Aug. 27.
The market will be fully enclosed to preserve the cold chain. All plans for the market, as previously reported in The Produce News, remain unchanged, Mr. DiCrecchio said. A significant detail that still needs to be resolved is a best access to railroad freight service, but such efficient service will be nearby and available to the market.
Mr. DiCrecchio credited J. Brian O'Neill, owner of the real estate development company O'Neill Properties Group LP, of King in Prussia, PA, with acquiring "the only 50-acre parcel in Philadelphia that could be developed for us, which is a remediated brown field site. He wouldn't take no for an answer and worked with the state on whatever obstacles arose."
Mr. DiCrecchio also credited Vincent Fumo, who represents Philadelphia's first state senatorial district, for "going to bat for us to the very end" of the completed agreement.
"The state is providing the original grant of $100 million, which Senator Fumo secured over two years ago for us. That is a pure grant," Mr. DiCrecchio said. There is an additional $50 million provided by the state "that we will pay back. We have other city grants in there, too, so the stockholders are borrowing a total of $50 million" to build the new market.
"So, all and all, it's not a bad deal for us," he said. "[Stockholders] only had to go find their own $50 million."
Mr. DiCrecchio said that the Philadelphia Regional Port Authority will be the landlord on the 40-year agreement. At the end of 40 years, the stockholders can buy the market for one dollar.
This agreement "is more than anyone [on the produce market] ever expected," Mr. DiCrecchio said. "It increases the value of everyone's business as time goes by. In 10 years, if our stockholders want to sell to a 35-year old guy, he would be buying equity in the market. If we had had equity in this market, we would have a nice chunk of change to put down" on the new market. Instead, the city of Philadelphia built the current market, which was completed in 1959, and rented the facility to the industry for the last 49 years."
In addition to the 50-acre market site, there are an additional 15 acres available nearby for overflow parking, should the market need it.
Mr. DiCrecchio believes that the new Philadelphia "will play an important role for all the other markets." Other cities needing new terminal market facilities, such as New York, Baltimore and San Francisco, "will see how Philadelphia and Pennsylvania stepped up. They will see the food safety and all such important features that surround a terminal market. Peer pressure will impact the other states."
Mr. DiCrecchio continued, "Terminal markets are not going by the wayside anymore," because new markets are able to meet HACCP standards and provide produce traceability greatly expand the markets' potential customer list. Larger customers aren't yet tied to food-safety regulations, but "looking down the line somewhere along the line, they will be. I can see it now."
As for rail access for the new Philadelphia market, Mr. DiCrecchio said that working with the railroads, which are located "right around us," is next on the agenda. "We have to get a building and work out something with them. With fuel prices, rail is the thing of the future. I don't think you will ever see fuel prices really completely go back down again. Rail will become efficient. Everyone knows rail is now more geared to moving this product."
Jim Storey, president of the Philadelphia Fresh Food Terminal Corp., called the market agreement "huge."
"This is the greatest thing that ever happened," Mr. Storey told The Produce News Aug. 17. "I am excited. It is a big step. Our rent and expenses will go up, but we can't stay in the facility we're in. I think this will be a huge step for the stockholders."
The most recent Philadelphia stockholders' meeting was Aug. 12, and "all the stockholders seem excited," Mr. Storey said. "I'm excited after [seven] years and hundreds and hundreds of meetings when we took one step forward, then two back. This will be a huge asset to our business. We'll be moving to a state-of-the-art facility from one that was once state of the art."
"The deal is done," Sonny DiCrecchio, general manager of the Philadelphia Regional Produce Market, told The Produce News after he faxed his signature to the proper parties to finally seal the agreement that paves the way to construct the world's most-modern wholesale fresh produce market here.
Mr. DiCrecchio said that he met with Philadelphia and Pennsylvania authorities Aug. 15 from the afternoon until late at night to hammer out the final details to clear the way for the new $217 million produce market.
Construction of the market will take about 23 months, which would place the opening in mid-2010. A formal groundbreaking with Pennsylvania Gov. Edward Rendell was scheduled to take place Aug. 27.
The market will be fully enclosed to preserve the cold chain. All plans for the market, as previously reported in The Produce News, remain unchanged, Mr. DiCrecchio said. A significant detail that still needs to be resolved is a best access to railroad freight service, but such efficient service will be nearby and available to the market.
Mr. DiCrecchio credited J. Brian O'Neill, owner of the real estate development company O'Neill Properties Group LP, of King in Prussia, PA, with acquiring "the only 50-acre parcel in Philadelphia that could be developed for us, which is a remediated brown field site. He wouldn't take no for an answer and worked with the state on whatever obstacles arose."
Mr. DiCrecchio also credited Vincent Fumo, who represents Philadelphia's first state senatorial district, for "going to bat for us to the very end" of the completed agreement.
"The state is providing the original grant of $100 million, which Senator Fumo secured over two years ago for us. That is a pure grant," Mr. DiCrecchio said. There is an additional $50 million provided by the state "that we will pay back. We have other city grants in there, too, so the stockholders are borrowing a total of $50 million" to build the new market.
"So, all and all, it's not a bad deal for us," he said. "[Stockholders] only had to go find their own $50 million."
Mr. DiCrecchio said that the Philadelphia Regional Port Authority will be the landlord on the 40-year agreement. At the end of 40 years, the stockholders can buy the market for one dollar.
This agreement "is more than anyone [on the produce market] ever expected," Mr. DiCrecchio said. "It increases the value of everyone's business as time goes by. In 10 years, if our stockholders want to sell to a 35-year old guy, he would be buying equity in the market. If we had had equity in this market, we would have a nice chunk of change to put down" on the new market. Instead, the city of Philadelphia built the current market, which was completed in 1959, and rented the facility to the industry for the last 49 years."
In addition to the 50-acre market site, there are an additional 15 acres available nearby for overflow parking, should the market need it.
Mr. DiCrecchio believes that the new Philadelphia "will play an important role for all the other markets." Other cities needing new terminal market facilities, such as New York, Baltimore and San Francisco, "will see how Philadelphia and Pennsylvania stepped up. They will see the food safety and all such important features that surround a terminal market. Peer pressure will impact the other states."
Mr. DiCrecchio continued, "Terminal markets are not going by the wayside anymore," because new markets are able to meet HACCP standards and provide produce traceability greatly expand the markets' potential customer list. Larger customers aren't yet tied to food-safety regulations, but "looking down the line somewhere along the line, they will be. I can see it now."
As for rail access for the new Philadelphia market, Mr. DiCrecchio said that working with the railroads, which are located "right around us," is next on the agenda. "We have to get a building and work out something with them. With fuel prices, rail is the thing of the future. I don't think you will ever see fuel prices really completely go back down again. Rail will become efficient. Everyone knows rail is now more geared to moving this product."
Jim Storey, president of the Philadelphia Fresh Food Terminal Corp., called the market agreement "huge."
"This is the greatest thing that ever happened," Mr. Storey told The Produce News Aug. 17. "I am excited. It is a big step. Our rent and expenses will go up, but we can't stay in the facility we're in. I think this will be a huge step for the stockholders."
The most recent Philadelphia stockholders' meeting was Aug. 12, and "all the stockholders seem excited," Mr. Storey said. "I'm excited after [seven] years and hundreds and hundreds of meetings when we took one step forward, then two back. This will be a huge asset to our business. We'll be moving to a state-of-the-art facility from one that was once state of the art."
