SalemNews.com, Salem, MA

September 19, 2013

US Foods to move to NH

Distribution company would add 100 new jobs after relocating

BY ANGELJEAN CHIARAMIDA and Alan Burke, STAFF WRITERs
The Salem News

---- — PEABODY — US Foods, a nationwide food distribution giant, wants to move from its current facility in Peabody to Seabrook, N.H., bringing millions of dollars in construction investments and more than 300 jobs to that town.

With no expansion possible at its property in Peabody, the company has spent four years looking at relocation sites, Jeffrey Barnes, director of corporate real estate for US Foods said at a Planning Board meeting Tuesday night in Seabrook. When company officials found the Poland Springs’ building in Seabrook, they felt that its already existing, huge storage warehouse presents an “exciting and unique opportunity” to relocate from its “older, tired, inefficient” 188,000-square-foot warehouse, Barnes said.

News of the move was an unpleasant surprise for some Peabody officials. It will have multiple ill effects, noted City Councilor Dave Gravel, including the loss of tax revenue, the possible loss of jobs and the possible perception by some that the city’s Centennial Park is not the best location.

“People will ask, ‘Why are they leaving?’” he said. “It hurts to lose people like that. Our efforts have been to grow the park.”

Strengthening Centennial Park has been one of Mayor Ted Bettencourt’s major goals. He could not be reached for comment yesterday.

“Disappointing,” said Councilor Barry Osborne of the proposed move. His ward includes the US Foods warehouse. “We want to maintain our strong commercial tax base.”

Osborne said he hadn’t heard of the departure before and wasn’t sure if anyone in the city had. He said, “We definitely need to talk to them. We should ask them straight out — ‘What’s it going to take to keep you here?’”

“It’s not good news,” said Council President Tom Gould. “It hurts to lose employees.” He quickly ended the phone call, explaining that he needed to find out more.

Representatives from the company briefly described their hopes to Seabrook Planning Board members Tuesday night. They want to buy the 505,000-square-foot Poland Springs warehouse on Ledge Road, spend close to $40 million in renovations and improvements, bring their 270 Peabody-based employees to run it, then hire as many as 100 new staff members, they said.

Barnes and John Glynn, president of US Foods Boston division were at the Planning Board to announce their intent and to seek the board’s advice before officially filing for site plan review. Given the “tight window” they have to acquire the Poland Springs building and 80-acre site, and the need to complete extensive improvements before its lease runs out in Peabody, US Foods needs an organized planning process that moves swiftly, they said.

“We intend to do everything on our end to keep the project moving,” Barnes said.

Since it is within quick reach of Interstate 95, the Seabrook building would be an ideal place from which to distributes its tens of thousands of products to restaurants, hospitals, schools and government operation throughout eastern Massachusetts, New Hampshire and Maine, Glynn said.

One of the country’s largest food service distributors, US Foods has 24,000 employees nationwide, with 60 distribution centers in 37 states. With annual revenues of $21 billion, it is among the largest privately held corporations in the country, according to published reports.

With headquarters in Illinois, the company is owned and run by Clayton, Dubilier & Rice Inc. and Kohlberg Kravis Roberts & Co., two large private equity firms that acquired the company in 2007 for $7.1 billion.