From: Greg Stiles, Mail Tribune, Medford, Ore.
Published November 17, 2004 12:00 AM

Rogue Valley of Oregon tops Organic Food Manufacturer's Expansion Wish List

Nov. 17—It appears the Rogue Valley has won the tug-of-war for the expansion of Amy's Kitchen, a rapidly growing Santa Rosa, Calif., organic food manufacturer with $200 million in sales.





Owners Andy and Rachel Berliner apparently have chosen Jackson County as the spot to expand their frozen entrée and soup production, ending a two-year search after two recent visits here.





Scott Reed, Amy's Kitchen chief operations officer, said the firm explored more than 20 locations in 10 states. Although an earnest money check for a White City site was proffered early this month, Reed said there are unspecified due diligence matters to investigate and discuss.





"All I can really tell you, out of respect for the process, is that it's pretty complicated," Reed said. "We said we'd announce our intentions in November and here we are at Nov. 16."





Amy's Kitchen became the poster child for companies leaving California because of the high cost of doing business. The reasons range from hefty worker's compensation and energy rates to land prices.





The spotlight hit Amy's Kitchen last March when California Gov. Arnold Schwarzenegger promised to deliver economic relief after Oregon Gov. Ted Kulongoski and his economic development team began intensively wooing the owners.





If all goes as currently planned, Amy's Kitchen will build a three-phase production center west of Table Rock Road in the vicinity of Antelope Road.





Economic development officials and other sources declined to name a specific site, citing confidentiality clauses.





The first two phases will be 120,000 square feet each, followed by a third phase that will bring the overall project to 400,000 square feet.





"The building has to be designed to accommodate phase two without interruption," said Jim Roos, who has been involved with the project for more than a year, working with Rogue Southern Association Development company.





How many jobs Amy's Kitchen will create and what products it will produce are not yet known.





"When we make a decision, we will talk about it, but it only serves to make people anxious around here," Reed said.





He said premature reports circulating in Salt Lake City and Boise have caused angst among employees.





"It's also cost us time because we have to explain the stories aren't accurate," he said.





In addition, the San Francisco Chronicle ran a story last week suggesting the company's plans hinge on a California Public Utility Commission decision to allow Pacific Gas & Electric to charge lower electricity rates. Reed denies any connection between the commission's vote, scheduled for mid-December, and a formal announcement of Amy's expansion site.





"We just hope we can get through the final week of the process so we can do right by the process and the people who work for Amy's," Reed said.





The White City site's appeal reportedly surpassed others, both here and elsewhere, because it more closely met the company's criteria. Other sites in the Rogue Valley included the old Croman Corp. property in Ashland, the former Medco land near the Rogue Valley Mall and a newly designated shovel-ready parcel near the Medford airport off Hamrick Road.





While one developer considered $300,000 per acre a fair price for the Croman property in Ashland, the entire approximately 50-acre parcel selected by Amy 's Kitchen figures to go for less than half a million dollars.





Likewise, Amy's had little desire to be in a retail area or next-door to smokestack industries.





Its Santa Rosa location is adjacent to residential property, sparking complaints similar to those aimed at Medford food processor Sabroso Inc.





"We probably meet them odor for odor," Reed conceded.





As a result, any land near neighborhoods was bypassed.





Much of White City west of Highway 62 is industrialized, processing wood products, other natural resources or chemicals. Rail spurs crisscross the relatively empty area west of Table Rock Road, a plus for Amy's Kitchen, which currently lacks direct rail access.





"We use a mixture of truck and intermodal (switching to rail) service here," Reed said.





Direct access to Central Oregon & Pacific Railroad tracks will reduce some shipping costs.





Food producers require an enormous amount of water and energy and produce a large amount of wastewater. But Curt Johnson, who compiles annual figures for the Society of Industrial and Office Realtors, says those are not concerns here.





"I'm confident our community could accommodate Amy's Kitchen, mainly because we have adequate water supply and sewage facilities," says Johnson. "Plus, our fiber-optics infrastructure is in pretty good shape. But we still worry about roads and air quality."





From the beginning, state and regional economic development representatives pitched Southern Oregon's labor force — whose demographics matched those of the manufacturer — and energy prices that will save Amy's Kitchen millions of dollars.





This likely won't be the last stop in Amy's Kitchen's expansion. While the recent search has been centered in the West, the manufacturer's long-term goals include the Atlantic seaboard. The processor's organic soup is now among the top-seven selling brands in part because of its heavy East Coast sales.





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© 2004, Mail Tribune, Medford, Ore. Distributed by Knight Ridder/Tribune Business News.


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