Pa. company seeks to buy Parks plant But Dietz & Watson say deal hinges on receiving state aid

A promise to employ 150

2 lawmakers request more details, city firm would still end

Food processing

December 16, 1998|By JoAnna Daemmrich and William Patalon III | JoAnna Daemmrich and William Patalon III,SUN STAFF

Philadelphia-based deli-meats maker Dietz & Watson Inc. confirmed yesterday that it wants to buy the Parks Sausage Co. building in a deal it says would create 150 jobs.

However, the Dietz & Watson deal hit a key snag yesterday when Maryland lawmakers delayed making a decision on $750,000 in economic development money the Philadelphia company is seeking.

The money, a low-interest loan, is a central piece of a financial package the city and state have put together, Dietz & Watson said.

"If we're not approved for this 'Sunny Day' funding, this deal doesn't make sense," said Cindy Yingling, a vice president for Dietz & Watson, a privately held company with more than $100 million in annual revenue. "Every state in the nation makes many types of deals available for manufacturing companies -- some even say: 'We'll build a factory for you' -- but [Parks] is an attractive facility and we wanted to stay close to home."

Dietz & Watson already is a big supplier of hot dogs, deli meats and other products to Baltimore-area supermarket chains such as Giant Food Inc. and Super Fresh Co. But demand has FTC outstripped their manufacturing capacity and they need more space -- even though they're expanding their Philadelphia factory.

Dietz & Watson is promising to employ as many as 150 people and to modernize the Baltimore plant in return for the loan from the state's Sunny Day Fund. But several city lawmakers objected that the plans -- and the request for state aid -- came as a surprise.

"I want to know why this company will be successful while others have failed," said Sen. Barbara A. Hoffman, a Baltimore Democrat.

State economic development officials warned that the loan was critical to keep the Parks Sausage factory humming. The Legislative Policy Committee tabled the request, however, and asked for more details. The loan will be reconsidered within the next few weeks.

Robert C. Brennan, assistant secretary of the state Department of Business and Economic Development, said he would do everything possible to persuade Hoffman and Del. Howard P. Rawlings, another Baltimore Democrat who raised objections, to approve the deal.

Brennan said that "it's really important that I get them on board with this transaction. We want to keep the company on track so that they close this transaction."

Rawlings expressed concern that Philadelphia workers might be hired instead of those from Baltimore. But Brennan said he expected Dietz & Watson to move only a handful of employees to Baltimore -- and to rehire many laid-off Parks workers.

Indeed, Dietz & Watson said for the first time yesterday that it is not buying the Parks business, opting instead to make its own products out of the Park Heights factory.

"Parks is closing -- we're only buying the building," Dietz & Watson's Yingling said.

Parks' owners -- former Penn State University football teammates and National Football League stars Franco Harris and Lydell Mitchell -- recently told union workers they would shut the business down early next year if it were not sold. However, the Parks name may live on: Harris and Mitchell already have outsourced production of some of the company's products to other firms and could conceivably do so with any remaining products that still have good sales.

Mitchell, in charge of the day-to-day operations of Parks, confirmed last night that negotiations were under way with Dietz & Watson. But, citing the sensitive nature of the talks, Mitchell said he had "really nothing to report at this time." He did say, however, that the Parks name would not disappear from the marketplace.

Parks employs about 50 union workers right now, and an official said last week that he was negotiating with Harris and Mitchell for a severance package for his people should the deal go through. The official also said that his workers would be enthusiastic about joining the new owners of the Parks Sausage plant.

Pub Date: 12/16/98

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