NEW FOOD DISTRIBUTION CENTER COMING TO SOUTH PHILADELPHIA

     PHILADELPHIA, September 4, 2008 – With state assistance, a private developer will build a new Food Distribution Center in South Philadelphia, containing retail and wholesale operations that sell fresh produce throughout the mid-Atlantic region, state Senator Vince Fumo announced today.

     The $218.5 million dollar project will include a 667,000 square-foot, state-of-the-art facility occupying a 48.6 acre parcel of land at 6700 Essington Avenue, with another 15 acre parcel nearby that will be used as a parking/staging area. It will retain 1,468 current jobs, and create an estimated 375 more.

     Essington Avenue Partners II will develop the new Philadelphia Regional Produce Market. The state will provide a $100 million grant, with additional state and federal loan financing, through the Philadelphia Regional Port Authority. The PRPA will be the landlord under a 40-year lease.

     “This has been a long time coming, with numerous obstacles and detours over the past seven years. But many people were determined not to give up, and now we are going to have the kind of modern, world-class facility that we need to serve our population in the 21st century,” said Fumo, a Democrat who represents the first Senatorial District, home of the current Food Distribution Center facility on Galloway Street in South Philadelphia.

     The first floor space will have 68 merchant units, a main walking and retail concourse, and a dock area, along with rest rooms, utility rooms, a restaurant and USDA accommodations. A second floor will contain office space for the merchants, tenants and market associations.

     The developer plans to break ground in September. The facility should be ready for occupancy by fall of 2010. Under the agreement, the developer is to complete the project within the two-year period, on budget, and will be responsible for cost overruns.

     “The state is making a big investment, but Pennsylvanians will receive an even bigger return,” Fumo said. He noted an analysis by EConsult that estimates the direct and indirect economic benefit to the City of Philadelphia and the state at $270 million per year, or $10.8 billion over the 40-year life of the lease. Seafood distributors, who currently operate a facility adjacent to the current produce market, will not move to Essington Ave. Work will continue on efforts to provide a new facility for them.

     The Food Distribution Center has been housed in an antiquated facility built in 1959. Due in part to more stringent federal regulations regarding food handling, the vendors faced the prospect of a large capital investment to upgrade their current location. Additionally, the size of the current facility was not suitable to meet the needs of that upgrade.

     Bio-terrorism concerns after September 11, 2001 resulted in additional federal rules and increased the urgency to modernize. Fumo had already been doing preliminary work with produce and seafood vendors as early as 2000, but when New Jersey offered to find a new location for the Food center, Fumo took the lead in intensifying Pennsylvania efforts to keep the facility in Philadelphia.

     This is the second attempt to replace the current home of the food wholesaler operation. In September of 2005, Fumo, Rendell and others announced plans to construct a new center for both produce and seafood vendors in the former Philadelphia Naval Shipyard. Various problems subsequently arose regarding that site, however, and efforts began anew to find a new location and create a new financing plan.

     Essington Avenue Partners II is a development affiliate of O’Neill Properties, headed by Brian O’BNeill. O’Neill Properties is a national real estate and development company headquartered in King of Prussia, Pa.,
The Philadelphia Regional Produce market is the oldest in the United States and currently ranks second in revenue to the Hunts Point Market in New York City. It serves institutions such as hospitals, schools, military bases, correctional facilities, supermarkets, restaurants, specialty shops and convenience stores.
   

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