Affton food plant expansion a delicious prospect

From The South County Journal. Wednesday, August 27, 2008

Willy Wonka doesn’t live there anymore, but delicious things still continue to come from his former factory in Affton.

Kerry Inc., a global producer of food flavorings based in Ireland, is expanding its manufacturing plant in the 8000-8100 blocks of New Hampshire Avenue. The site is the former home of Nestle USA, which produced Willy Wonka, Sweet Tarts and other candies.

Nestle closed the plant in 2003 which resulted in more than 300 employees losing their jobs.

Kerry manufactures flavoring components for such companies as Dreyer’s Ice Cream, Kelloggs and Nestle.

Kerry purchased the site and originally proposed a $10 million investment, which would mean about 40 new jobs.

In 2007, the St. Louis County Council approved issuing $18 million in industrial development revenue bonds to help the Irish company purchase the former Willy Wonka building. The deal included a 50 percent abatement on real estate and personal property for 10 years. The company also gets a sales tax exemption on building materials for the project.

The company is now carrying out equipment retro-fitting operations in the existing building and also constructing a 55,000 square-foot refrigerated storage and dry storage facility, Tim Martin, human resources lead at Kerry, said.

Passers-by along Heege Road and New Hampshire Avenue are seeing a combination of work to install the footings for the new building and sewer and stormwater work required by the Metropolitan Sewer District, Martin said.

Martin said the facility will see $55 million in facility upgrades and new equipment purchases, which will also bring the creation of just over 200 new warehousing and food manufacturing jobs.

St. Louis County Economic Council President and Chief Executive Officer Denny Coleman, said “it’s been a great project for the Affton community from the very beginning.”

“And it just continues to get better,” Coleman said. “We’ve gone from an initial plan to invest $10 million in the site to now nearly $55 million, and from 40 jobs to 200 jobs. Kerry feels very good about this site and the location and their ability to grow here, and that’s great for the whole county in addition to the Affton community.”

The Economic Council estimates Kerry’s expansion and investment, along with the additional new jobs, will generate a total economic impact of $230 million to the St. Louis County area.

According to the incentive plan from the county, revenues from the bond sales help finance the costs of purchasing, constructing and equipping the plant. The bonds would be payable solely from payments, revenues and receipts from the leasing the facility from St. Louis County to Kerry, Coleman said.

Under the Chapter 100 regulations, the county owns the facility in name only and Kerry leases it from them; the bonds sold and the interest on them are not a debt of the county or the state, and neither will be financially liable for them, Coleman said.

“They have complete control and complete responsibility,” Coleman said. “There is no fiscal responsibility on the part of the county. It’s de facto controlled by the company, but the way the Chapter 100 incentives are provided is by county ownership.”

Kerry makes payments in lieu of taxes (PILOTS) equal to 50 percent of the property assessed value for 10 years. The Affton School District and the Affton Fire Protection District will continue to receive tax revenues during the 10 year period, Coleman said.

“That’s the beauty of the 50 percent,” Coleman said. “Obviously the company is getting 50 percent benefit, but so are the local taxing jurisdictions. So, when you turn a facility like this from a vacant facility into a very productive facility everybody benefits. That’s a nice increase over what just a vacant building would bring.”