Incentives proved unfruitful in Del Monte project
NEWARK — Although the arrival of one of America’s largest food processors was touted as an early economic development win for the Carney administration, the Pencader Corporate Center project never saw a job created, according to officials.
Just three months into Gov. John Carney’s first term, he said in an April 2017 release that he was looking forward to the 160,000-square-foot plant “come alive again, bringing with it new jobs to our state.”
It appears the nearly $1 million in taxpayer-backed incentives weren’t enough to get Del Monte Fresh Produce to transform the space into a key food distribution point in North America though.
Nearly four years after Del Monte Fresh Produce bought the building on 300 Executive Drive for $6.5 million, it sold the building to ChristianaCare for $7.5 million. In all that time, the global fruit and vegetable distributor never invested the announced $22 million to remodel the building for production lines, fruit ripening rooms and refrigerated warehouse space.
No employees worked out of the potential distribution site, although Del Monte Fresh Produce was approved for incentives to create 27 full-time positions by the end of 2019, and had claimed it could employ hundreds more when the facility was fully in operation.
“We’re obviously disappointed that the plans didn’t come to fruition as we had hoped, but ultimately no taxpayer money was spent,” Jonathan Starkey, a spokesman for the governor, told Delaware Business Times this week.
Del Monte Fresh Produce spokeswoman Andrea Beron Hoyos referred to the Newark project as more conceptual than perhaps officials led on originally.
“Although we had a few conversations, the project to develop the facility was never formalized. Through our North America optimization effort, we improved the performance in other locations, and there was never a need to revisit developing the Delaware facility,” she said.
The prepared food company, based in Florida and sometimes called Fresh Del Monte Produce, was established in 1989 after the Del Monte Foods fresh fruit division was sold off to another company and eventually went through several ownership changes. It has gone public and continues to market pineapples, bananas, and other produce under a licensing agreement for the Del Monte label.
In February 2017, Del Monte Fresh Produce announced it would use the Pencader Corporate Center facility as a production plant for sandwiches, fresh-cut fruit and protein salads as well as warehouse space and business offices. At the time, the canned fruit giant promised to bring 300 to 500 jobs to Delaware after the facility opened by December 2019.
To lure the company to set roots here, the Delaware Council on Development Finance — the state’s appointed investment board — approved $916,000 in taxpayer-backed incentives. That included a $259,000 performance grant to hire 27 full-time employees and a match of 3% of Del Monte Fresh Produce’s capital expenses up to $654,000.
No funds were ever disbursed, however, as the company did not seek to draw on the grant, according to Delaware Division of Small Business Communication Manager Gary Haber.
“Delaware is not only an ideal location for our company to further develop our robust Northeastern operations, but will also give us the ability to provide jobs and growth to the surrounding community,” Del Monte Fresh Produce Senior Vice President Paul Rice said in a 2017 press announcement.
The company has instead invested elsewhere.
Months after Del Monte Fresh Produce closed on the Newark property, the company opened its 25th distribution center in Houston, which brought on 200 employees to process, repackage and distribute products. In 2018, the company finalized acquiring Mann Packing Co. Inc., a California-based food grower, processor and distribution. The $361 million deal brought Mann’s 600 employees at its three packing facilities in Salinas, Calif., into the Del Monte fold. Last August, Del Monte Fresh Produce opened its own packing facility in Michoacán, Mexico.
This is not the first time plans have been abandoned for 300 Executive Drive. In 2005, the Christina School District bought the building to turn it into an 800-student middle school. The district paid $12.8 million for the building and spent millions more renovating it. As enrollment dropped and financial issues mounted though, the dream was never realized, according to the Newark Post.
Before the school district bought it, the building was home to AstroPower, a solar electric power product manufacturer. After facing financial struggles, AstroPower filed for bankruptcy protection in 2004 and sold off some of its assets to survive.
ChristianaCare finalized the purchase of 300 Executive Drive on Nov. 25, and will reportedly invest $25.6 million to turn it into a distribution and warehouse center by 2022. The warehouse would more than quadruple ChristianaCare’s existing space in New Castle and would allow it to have a more streamlined and centralized supply chain to its hospitals.