State deal lets Phillips grow in city

West Baltimore distribution center to be purchased

Move to Locust Point

Larger facility could easily create 200 more jobs

January 22, 2002|By Michael Dresser | Michael Dresser,SUN STAFF

In a deal that would keep about 300 jobs in Baltimore, the state has agreed to purchase the Phillips Foods Inc. distribution center in West Baltimore for $5 million more than its appraised value to help the company expand operations in the city.

The proposed agreement, which is to be presented to the Board of Public Works tomorrow, calls for Phillips to keep its headquarters in Baltimore for at least seven years, spend $15 million on new facilities and maintain its current level of operations.

David S. Iannucci, secretary of business and economic development, said yesterday that Phillips' expansion could easily add another 200 jobs in the city.

Phillips plans to relocate its headquarters, manufacturing plant and distribution center to a former Coca-Cola bottling plant in Locust Point.

Phillips Foods is a Baltimore-based affiliate of the Phillips Seafood restaurant chain founded by Brice and Shirley Phillips in Ocean City. The food company now makes a variety of seafood products at its manufacturing plant in the 100 block of S. Warwick Ave. and distributes them from its distribution center at 1430 and 1650 S. Monroe St.

The contract calls for the Maryland Transit Administration to spend $6.8 billion to purchase the Monroe Street property. The property was appraised at $1.8 million.

Iannucci said the deal forestalls a possible move to another state. He said company officials never threatened to move, but he added that the department had received information that Phillips was scouting locations in Delaware and elsewhere.

The company had planned to expand on Monroe Street, but the Maryland Department of Transportation (MDOT) identified the 11.45-acre parcel as the ideal location to consolidate its Maryland Commuter Rail Service (MARC) train maintenance facility.

Mark Sneed, president of Phillips Foods, said the new 270,000-square-foot site, now being redeveloped by Struever Bros., Eccles & Rouse, will give Phillips the room it needs to accommodate its fast-growing business. He said the company's growth has been limited by the 80,000 square feet of its current facilities.

In its new home, Sneed said, the company will be able to expand its current product line. Phillips' products include such prepared foods as frozen crab cakes made from the crabmeat Phillips imports from several Asian countries.

Sneed said the company started in 1996 with 11 workers. He said employment now ranges between 250 and 310, depending on seasonal factors. He offered no predictions of how many jobs would be added, but said the company will be adding sales and administrative workers as well as production employees.

The Phillips executive said the company recently received the 2001 Emerging Growth award from the Association for Corporate Growth.

Sneed said city officials had been very helpful in showing the company at least 10 possible choices of relocation sites. He said Baltimore also is kicking in a $600,000 loan to help close the deal.

Iannucci said the deal was important for Baltimore because it retains mid-level and entry-level manufacturing jobs in a part of the city heavily populated by minorities - who make up much of Phillips' work force.

"We knew this was a priority of Governor [Parris N.] Glendening because these were city jobs," Iannucci said.

Baltimore also will gain an unspecified number of jobs at the MARC maintenance shop that will replace Phillips on Monroe Street.

Jack Cahalan, a spokesman for MDOT, said the department wants to centralize its repair facilities there because it's close to both Amtrak's Penn line and CSX's Camden line.

He said much of that work is now done by Amtrak under contract at its New York Avenue railroad yard in Washington.

Iannucci said the deal will provide multiple benefits.

"Riders of commuter rail service will get improved service," he said. "The state is able to assist in the retention of a historic Maryland company in Baltimore City."

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