Dreyer's poised to expand

Ice cream maker to launch $210 million project this week

October 15, 2006|BY A SUN REPORTER

One of the largest business expansions in Howard County's history and a key component of the revitalization efforts of the U.S. 1 corridor will be formally christened this week.

Dreyer's Grand Ice Cream Holdings Inc. will celebrate Thursday the completion of a $210 million expansion of its North Laurel manufacturing plant in a ribbon-cutting ceremony to be attended by dignitaries and top executives of the Oakland, Calif.-based company.

The project was announced almost two years ago but only after months of negotiations that included threats to relocate the facility, millions of dollars in taxpayer incentives and, in effect, the forced sale of adjacent property to accommodate the expansion.

Dreyer's executives declined to be interviewed for this article. But the expansion enables the plant to produce 58 million gallons of ice cream and 370 million dozen frozen snacks annually, the company said in a statement.

In addition to the Dreyer's brand, the company, which is owned by Nestle S.A., markets ice cream under the names Haagen-Dazs, Edy's and Nestle, among others.

The company has said the plant's expansion will add 700 jobs, but county officials say that figure might rise.

"The investment in this expansion is over $200 million," said Richard W. Story, chief executive officer of the Howard County Economic Development Authority and a principal in the talks that resulted in a lucrative incentive package to prevent Dreyer's from leaving the county. "That's a significant number. The jobs are also significant. All that motion in the county's economy is impressive."

Retaining Dreyer's was a "huge victory for the county," said County Councilman Guy Guzzone, whose district includes the plant. "It's important from the county's standpoint and an environmental standpoint. What a great thing it was to keep the business here and let them expand."

The company announced the project Nov. 8, 2004. It expanded the plant from 110,000 square feet to roughly 750,000 square feet, and tripled the amount of ice cream that can be produced at the facility.

Officials at the time said at least 300 jobs would be created, more than doubling the plant's work force. But Guzzone said that figure already is obsolete.

"They've got 700 now," he said, "and they are already talking about maybe 1,000 jobs. ... They've already exceeded our expectations."

There was a considerable taxpayer ante involved in keeping Dreyer's. Story said at the time the expansion was announced that the county would defer about $1 million in property taxes over four years. The county also accelerated plans for roughly $1 million in road and sewer improvements for the project.

The state also provided economic incentives; officials declined to specify them but said they would be "substantial." Story also said the county and state would provide grants and at least $400,000 in job training funds. The state loans would be forgiven if Dreyer's met its hiring goals.

Combined, Story said at the time, the financial package was the largest the county had approved for a business expansion.

The sizable county-state incentives were provoked, in part, by the company's threat to build a plant elsewhere. Company executives said they were considering sites in Pennsylvania, Virginia and two other counties in Maryland, Story said.

Guzzone said Dreyer's was eyeing particularly a large parcel of undeveloped land in Pennsylvania. Retaining the company here, he said, thus helped protect "green fields" elsewhere.

But the retention of Dreyer's also included a calculated effort by the county to help free up property adjacent to the plant.

The land was zoned for light manufacturing, but for more than a half-century the Pfister's Mobile Home Park had existed there, with about 70 families. The owners sought rezoning to allow the construction of townhouses on the property, but the County Council refused to grant the request, knowing that Dreyer's needed the land for expansion.

Guzzone said there was an "enormous exchange for many, many weeks" but that he "ultimately worked with my colleagues to assure that [the property] stayed" zoned for light manufacturing.

The Pfister family finally sold the property to Dreyer's, and the residents of the mobile home park were provided with economic incentives to help them relocate. The Pfisters, Dreyer's and the county cooperated on the incentive package, he said.

The county's position toward the Pfisters was curious because it has not only approved but encouraged residential development on property along U.S. 1 that was zoned for other purposes.

Dreyer's, which describes itself as the world's largest premium ice cream manufacturer, had humble beginnings. William Dreyer made his first frozen desert in 1906 to celebrate his arrival in the United States from Germany, according to a company history. He formed a partnership with candy-maker Joseph Edy in 1928 after moving to Oakland.

The two dissolved the partnership in 1947, with Dreyer retiring and Edy returning to manufacture candy. Dreyer's son ran the business until 1963, when he sold the firm to key company officers.

The company was sold again in 1977, to T. Gary Rogers, chairman, and William F. Cronk, president.

The pair "expanded it ... from a small regional ice cream operation to the largest company in its industry," with sales growing from $6 million to $2.4 billion annually, according to Shorenstein Properties LLC, a San Francisco-based real estate and investment firm.

Dreyer's became a public company in 1981. Nestle S.A., the huge Switzerland-based firm, acquired it in January.

Retaining Dreyer's county operations, Guzzone said, is "huge." And he said it has proven itself a "good corporate citizen."

Thursday's ceremonies are scheduled to begin at 1 p.m. and will include tours of the new plant.

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