McCormick eyes sites for new center

January 06, 1995|By Kevin L. McQuaid | Kevin L. McQuaid,Sun Staff Writer

McCormick & Co. Inc. acknowledged yesterday that it has initiated a search for a site for a potential $21 million distribution center in Maryland and Pennsylvania, a move which could touch off a bidding war between the two states.

The Hunt Valley-based spice manufacturer's potential 600,000-square-foot facility, which it hopes to have operational in December, would consolidate various distribution points into a single location to improve efficiency. Roughly 150 existing McCormick employees will be affected.

"We've simply outgrown our existing facilities in Hunt Valley with their capacity to distribute goods," said Alan D. Wilson, a McCormick vice president. "With a number of leased facilities, efficiency is difficult. The idea is to consolidate those operations."

The $1.6 billion spice maker's tight timetable stems from lease expirations and a larger corporate restructuring, which it announced in October.

Under that plan, McCormick will close its food service division's spice production operation in Hunt Valley, and shift those operations to its nearby consumer products plant, said Mac Barrett, a McCormick spokesman.

The company already has narrowed its search to six sites within a 50-mile radius of its headquarters, including two business parks in Harford County and land in both York and Shrewsbury, Pa.

That sites in Pennsylvania are being considered raises similarities between McCormick's proposal and that of Starbucks Corp. last year, when the Seattle-based coffee maker began searching for a site for a potential 1 million-square-foot distribution center, slated to create as many as 500 jobs.

Starbucks selected Pennsylvania after a publicly funded entity controlled by the commonwealth provided the company with $10 million in low-interest financing and other incentives.

"They're an extremely important corporation to Maryland, and our first priority is to keep Maryland-based businesses here," said James D. Fielder, assistant secretary of the state's Department of Economic and Employment Development. "It's a sensitive issue coming on the heels of Starbucks. But we're aware of Pennsylvania's capabilities, and we'll respond aggressively."

Mr. Fielder and other Maryland economic development officials conceded that a McCormick departure from Maryland would represent a huge symbolic loss to the state, despite the relatively small percentage of McCormick jobs involved.

"The approach we've taken with Maryland is that we'd like the same treatment as companies from out of state receive," Mr. Wilson said. He added Pennsylvania officials have expressed great interest in the project.

"They're not out to play one against another, it just so happens that Pennsylvania fits their geographic perimeters," said Andrew Georgelakos, a KLNB Inc. agent representing McCormick.

In addition to selecting preferred sites, McCormick and representatives from commercial real estate brokerage firm KLNB Inc. have dispatched requests for proposals to roughly a dozen developers, including Constellation Real Estate Group Inc., Kinsley Co. and Trammell Crow Co. Responses for the company's initial 40-acre, 370,000-square-foot requirement are due back later this month.

The company's proposal calls for a 10-year lease, which would be valued at roughly $15 million, with an option to purchase the completed facility.

McCormick would also consider owning the new distribution center, which could eventually be used for spice blending, packaging and light manufacturing.

Prior to the search, McCormick had been focusing on a 530,000-square-foot warehouse in Harford County owned by B. Green & Co. Inc., but the grocery wholesaler sold the facility to Supervalu Inc. in late November for $17 million.

The new distribution center isn't expected to have any effect on a 400,000-square-foot McCormick-owned warehouse in Hunt Valley, which it completed in 1975.

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