, Newburyport, MA

November 21, 2013

US Foods gets a conditional nod from Seabrook


---- — SEABROOK — If the $60 million expansion project gets the nod from its board of directors, national food distribution giant US Foods will be coming to Seabrook, buying and renovating the half-million square foot Poland Springs warehouse that sits on 88-acres off Ledge Road.

On Tuesday night, the Seabrook Planning Board gave a conditional green light to the project, that will bring hundreds of existing jobs to town, along with about 100 new positions. US Foods must still submit its engineering plans for the diesel fueling, light maintenance and truck washing facilities, and go through the plan’s normal site plan review process. Company officials also agreed they’d adhere to any improvements to their own safeguards, if required to do so after the board sends the plans out for independent review.

The Planning Board’s conditional approval Tuesday night was critical for US Foods to consider leaving its longtime, but too-small, location in Peabody for New Hampshire. According to US Foods Director of Corporate Real Estate Jeff Barnes, the company had only until Nov. 30 to get an OK from Seabrook, because of its deadline with the owner of the Poland Springs property, for an estimated $27 million.

Since it’s the same use of a conforming building, US Foods purchase and renovation of the Poland Springs warehouse would not have had to go before the Planning Board, if not for the company’s desire to add the fueling and truck washing components to the lot. Although in Seabrook’s industrial zone, the site is also in the town’s well recharge area, which required US Foods get a variance from the Zoning Board of Adjustment.

The company provided conceptual information on how it would build the fueling depot and washing facilities, offering multiple safeguards to ensure spills, if they occur, would not reach the groundwater and aquifer which feeds its public water supply.

At the previous meeting, US Foods said its plans include a double-walled, triple-layered 20,000-gallon diesel tank at the fueling depot that will sit in a “concrete bathtub,” large enough to hold more than its entire contents should it leak. The tank is built to sustain itself without failing if there is a fire raging around it for two hours, US Foods’ architect Tim Gibbons explained, and the entire area — including the three maintenance bays, washing facility and fueling depot — will be covered with a canopy to prevent storm water pollution.

In addition, it would take a spill of more than 100,000 gallons to exceed the edge of a concrete containment area that would also construction as a secondary safeguard, company officials said.

Last week, US Foods met with all town department heads, as well as Planning Board members at a technical review session on the conceptual design, according to Town Manager Bill Manzi. Although department heads suggested some additions of the design, US Foods representatives agreed to all of them, he said.

The only issue that gave the board pause this Tuesday was a letter from Salisbury Town Manager Neil Harrington that was hand-delivered that day. Since Salisbury’s wells share the same recharge area, he expressed his community’s concerns about the need for protection.

Initially, Planning Board chairman Don Hawkins wanted final approval conditioned upon addressing all of Salisbury’s issues. But US Foods balked.

The company intends to be “a good neighbor,” Barnes said, but Seabrook is the only entity with jurisdiction over the project. The company shouldn’t be expected to serve two masters, he said.

Seabrook Planner Tom Morgan agreed, advising the condition be removed. Manzi did as well, saying he’d had a good conversation with Harrington earlier in the day, assuring him Seabrook is mindful of the aquifer issue and taking all precautions. In addition, Manzi told Harrington he’d keep Salisbury apprised as the project moves along.

Speaking solely as a private citizen, attorney and former Seabrook fire chief Jeff Brown offered a warning about letting Salisbury dictate terms for a Seabrook development.

“I would be very cautious about granting the Commonwealth (of Massachusetts) a foot in the door here,” Brown said. “The Commonwealth has a vested interest in seeing this project doesn’t come to Seabrook.”

Brown was referring to the fact that US Foods current 188,000-square-foot facility in Peabody will close if and when the company moves to Seabrook. US Foods officials have said they’ve enjoyed their decades in Peabody, but that facility has been too small for years and can’t be expanded. Although Peabody officials said they’d reach out to try to keep the company in the city, due to US Foods size requirement, it isn’t possible.

In the end, the board removed its Salisbury-related condition for approval, but asked Manzi to take the lead in keeping Harrington in the loop.

Yesterday, Harrington was satisfied with that consideration, adding his letter was never intended to kill the project, just to protect the town’s water supply.

“We’re not opposed to this project going to Seabrook, I want to make that clear,” Harrington said. “It’s just that aquifers know no boundaries. I had a very good discussion with Seabrook’s Town Manager on Tuesday and he appreciates our concerns.”

With Seabrook’s conditional approval granted, Barnes’ next move is to present the project to US Foods Board of Directors for its go-ahead. A $62 million project — $27 million for the property and $35 million in renovations — is a considerable investment, Barnes said. The US Foods board must weight the potential risks and benefits to the company, then decide if it’s sound, he added.

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.