Possible tenants could bring 155 jobs to shuttered Birds Eye plant

San Jose Mercury News

WATSONVILLE — A cavernous old Birds Eye processing plant, that has been on and off the market for several years, is in escrow again, this time with a group of local investors who say they’ve got lease commitments for about half the building space that will translate to about 155 jobs.

The 206,250-square-foot building with a leaking roof dates back to 1985. It sits atop a weedy 20-acre lot cornered by Highway 129 and Harvest Drive. Since Birds Eye laid off 550 employees in 2006 and shuttered its doors, the building has remained vacant.

“There’s a lot of potential here,” said Kristen Macken, a Santa Cruz commercial real estate broker heading up the interested investors. “It’s just a clean slate.” Macken declined to state the final offer on the property which is listed by Colliers International at $9.1 million. The deal entered a 60-day escrow period on June 23.

“I think we have a fair deal,” she said. It is, however, a short period for due diligence on such a large property, said Macken, who described back-to-back meetings with contractors, bankers and prospective tenants.

The property is in a state enterprise zone and city redevelopment area. It also has an on-site 65,000-volt electrical substation and a long-term tenant, Americold, which has a long-term lease on a building at the southwest end of the property, generates more than $300,000 annually in payments.

If the deal goes through as planned, with federal stimulus money

covering part of the commercial loan and some purchase and rehabilitation costs, one tenant will be an unidentified Santa Cruz-based company with about 125 employees that will fill about 90,000 square feet of space. A second tenant, committed to fill another 5,000 to 10,000 square feet, will be a Taiwan-based startup that designs and engineers prototypes of environmentally green products. That company could grow to 30 employees in a year, Macken said.

David Zulim and Lorri Kershner will be involved in building design, which will focus on reducing the carbon footprint of the building, said Macken, who co-founded M Commercial Inc. in 1993 and currently serves as its chief executive officer. Macken is also in talks with another local company interested in filling a large portion of the space by February.

“It’s been, for me, very exciting,” Macken said. “We’ve done a lot of work to get to this point.” John B. Kovaleski, a senior vice president at Colliers, declined to comment on the pending deal.

“It’s a really positive sign,” said Kurt Overmeyer, economic development manager for the city of Watsonville. “The hope it there will be quite a few manufacturing jobs.” Judging by the numbers of recent inquiries, there are indicators that the local economy is picking up, Overmeyer said.

“Ever since we started our full-fledged economic development plan, rehabilitating older industrial spaces that are vacant has been high on our list of priorities,” Overmeyer said. “We’re actively looking for businesses that would fit well.”

This article was first published here.

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