Friday, April 09, 1999

City loses last of produce industry


Cincinnati can't find land to relocate firms

BY LUCY MAY
The Cincinnati Enquirer

        A deal designed to keep four produce companies within the city of Cincinnati has fallen apart, and the companies are left to find new homes on their own.

        The companies — and more than a half dozen others that operated side by side on Cincinnati's riverfront for a century — moved a year ago to make way for the new Bengals stadium. Now the firms that were determined to stick together likely will go their separate ways.

        “I think the produce industry as we know it today is about over in the city of Cincinnati,” said Don Goetz, president of Fries Bros. Fruits and Vegetables. “So be it.”

        Cincinnati City Councilman Phil Heimlich thinks the problems with the produce industry show the city needs to find another way to keep existing businesses and attract others.

        But Economic Development Director Andi Udris argues the problem is that Cincinnati doesn't have the undeveloped land and trouble-free, wide-open “greenfield” spaces the suburbs can offer.

        Either way, the produce companies are the latest example of the city's seemingly chronic problem with keeping companies — and jobs.

        “It's kind of like baseball. You can give all the reasons in the world for why you're not winning. But the bottom line is, how many runs are you putting up on the scoreboard?” Mr. Heimlich said.

        Mr. Udris said his department does have a problem: a lack of space to relocate companies that are growing. He can't really work to attract industrial firms, he said, because the city doesn't have space for the businesses it has now.

        “We cannot make dirt,” he said. “The city of Cincinnati is landlocked. We do not have land that is developable. We do not have any farms left in the city of Cincinnati.”

        Indeed, the lack of space is the top reason that many industrial firms leave Cincinnati, or St. Bernard, Lockland, Woodlawn and Norwood, the other communities in the industrial corridor, said Joseph Kramer, vice president for economic development at the Greater Cincinnati Chamber of Commerce.

        “More than tax issues or bureaucracy or any other issues, it's a space challenge,”

        he said.

        The city is even limited by its “brownfields,” or formerly industrialized areas, said David K. Main, president of the Hamilton County Development Co., which operates the county's economic development department.

        “The city does not have the large acres of so-called brownfields that are unutilized,” he said.

        “They might be underutilized,” he added, but they're not completely empty, which makes it easier to redevelop the sites.

        There are roughly 500 acres and 5 million square feet of “obsolete or abandoned or otherwise problem facilities” in the industrial corridor, Mr. Kramer said, adding, “The barriers are daunting.”

        Mr. Kramer argues that every time an industry moves farther from the region's core, it adds to traffic congestion, smog problems and creates “reverse commute” headaches for getting welfare recipients to jobs at the more distant facilities.

        In an effort to deal with the industrial corridor's land problems, Cincinnati and HamiltonCounty created the Port Authority for Brownfield Redevelopment.

        The group's challenge is to assemble smaller, privately owned brownfields into larger parcels that are usable for industry, said Executive Director Lisa Lange, who has been on the job since early last year.

        That process is time-consuming, and the port authority's funding runs out at the end of this year. So now Ms. Lange is scrambling to find the money to continue the group's work.

        “It's a big task,” she said. “You don't undo 150 years of industrialization overnight.”

        In the case of Cincinnati's produce industry, city officials had a feeling early on that the city would lose some of the industry's nearly 600 jobs, although Mr. Udris argues he fought hard to keep them.

        In a 1997 report to city council, Mr. Udris noted that the produce industry provided the city with $300,000 annually in local income tax earnings. He expected an entire industry relocation within the city to add an additional 75 jobs, which would have meant an additional $39,000 in local income tax earnings for the city.

        Those figures didn't even include Crosset Co., which didn't have to move for the stadium but later moved for the reconfiguration of Fort Washington Way.

        Now, most of the industry's jobs — and the tax revenues they bring — have left the city limits. Castellini Co., the industry leader, announced in late 1997 that it would move its operations and nearly 300 jobs to Wilder in Northern Kentucky.

        Caruso Inc., another of the bigger firms, temporarily moved its operations and 80 jobs to a facility near Tri-County Mall in Butler County in early 1998.

        Caruso continued negotiations with the city for a while, but the firm quickly dismissed the Este Avenue site the city was offering, said Jim Caruso, the firm's president.

        “We felt that having a fresh produce distribution operation right near an old garbage dump was not a good idea,” Mr. Caruso said.

        The company is no longer talking with the city and continues to look for a permanent location on its own.

        Mr. Caruso mourns the breakup of the industry. Two of the smaller firms — Sanzone-Palmosano and Degaro — went out of business, he pointed out. Battaglia merged with Caruso.

        Crosset Co., a subsidiary of Castellini, was the last produce company to move off the riverfront. In December, the company took its operations and 150 employees to the former Sears warehouse on Creek Road in Blue Ash temporarily. It will build a new, permanent facility in a location yet to be announced.

        But it seemed as if four firms — Gentile Bros. Co, Flatow-Riley Inc., Iles Produce and Fries Bros. — were determined to stick together and stay in Cincinnati.

        Just last May, it looked as if the four companies were destined to move their operations and nearly 200 jobs to the Ridgewood Industrial Park on Este Avenue.

        Since then, however, some of the same environmental problems that worried Caruso have caused concern for the other companies.

        Underground fuel storage tanks already have been removed from the site, Mr. Udris said. But some of the firms have stopped working with the city on a relocation plan.

        Executives at Gentile Bros. did not want to comment on the status of their talks with the city. A Flatow-Riley executive would say only that his company's plans were in flux. Iles didn't return phone calls.

        But Mr. Goetz of Fries Bros., which has 16 employees, said negotiations between his company and the city have “pretty much fallen apart.”

        Mr. Goetz said he got nervous about the Este Avenue site when environmental officials told him to spend $40,000 to put a liner under his new building to protect his business from any residual ground contamination.

        In a March 31 letter to Glenn Bryant of Gentile Bros., Cincinnati City Manager John Shirey wrote he was “quite disappointed” that the company was no longer considering the Ridgewood Industrial Park.

        “Let me assure you that the city has taken great care in evaluating the environmental condition of this property. To prepare the site for development, we have spent more than half a million dollars trenching and sampling soils, installing ground water monitoring wells, removing production wells, removing underground storage tanks, and installing a remediation system.”

        Mr. Goetz said city officials keep trying to assure him that they'll take care of any problems once he moves, but he doesn't want to bank on a promise like that.

        “I'm going to stay in Cincinnati if I can,” he said. “I have nothing against the city. I think we should have been thrown off the riverfront.”

        Still, Mr. Caruso thinks the city could have done more. He argues the produce companies were moved to make way for a business — the Bengals. He wonders whether the city could have moved other firms to create a big enough site for the entire produce industry.

        “It's just amazing that this 100-year-old industry with such a heritage in the city has split up,” he said.

        But he agrees that the city has problems when it comes to finding a large site for a business.

        “Most of the only land the city has is contaminated or in the flood plain,” Mr. Goetz said. “I don't know what they could have done differently. It was a bad situation for everybody.”

       



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