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PHILADELPHIA-A new food distribution center aggregating 960,000 sf is planned for an 85-acre parcel at the east end of the Philadelphia Naval Shipyard. Construction is expected to cost $100 million. Groundbreaking is scheduled to take place before the end of this year, and completion is anticipated approximately two years later.

The project has been five years in the making, during which terminal merchants threatened to relocate to New Jersey. The approximately 41 merchants currently operate from a facility on 30 acres at Packer Avenue near Galloway, which was built for them in 1959 and is over-crowded and deemed antiquated in respect to food safety as well as efficiency.

The new center will consist of an 800,000-sf building for produce, and a 160,000-sf structure for seafood. “Due partly to more stringent federal regulations regarding food handling, the vendors faced the prospect of a large capital investment to upgrade their current location,” says State Sen. Vincent Fumo. “Additionally, the size of their facility was not suitable to meet the needs of that upgrade.” Sonny DiCrecchio, executive director of the Philadelphia Regional Produce Terminal, worked with Fumo in efforts to obtain state funding.

The state is providing $50 million, which will be matched by the 41 merchants in the form of bonds backed by payments from a long-term lease agreement between them and the Philadelphia Regional Port Authority. PRPA will assume control of the site from the Philadelphia Industrial Development Corp., which through an affiliate, owns the Naval Yard.

Peter Longstreth, president of PIDC, tells GlobeSt.com, “the property will be conveyed for some consideration,” but says the price is still under negotiation. PIDC will resume control of the 30-acre site on which the food distribution center now operates, which it also owns. “We will probably demolish the buildings and sell the land to the highest and best use, which presumably will be food-distribution related,” he says. Terms of the lease agreement between the merchants and PRPA are undisclosed, and calls to the port authority were not returned by deadline.

According to Fumo, the center generates more than $1.5 billion in annual sales. It currently employs 1,500 people. Refrigeration capacity in the new facility will increase from its present 650,000 packages to 2.8 million packages, and employment at the center will increase by an estimated 25%, he says in a statement.

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