BENTONVILLE — Area officials want to find a tenant for the Kraft Foods plant when it closes later this year.
The plant initially was scheduled to close sometime in the company’s second fiscal quarter that runs from April 1 to June 30. A company spokeswoman confirmed last week the plant will remain open through October.
At A Glance
Kraft Plant
A listing for the Kraft Foods plant offers the following selling points:
• 54,000-square-foot building
• 6.59 acres
• 4,500 square feet of cooler storage
• Milk receiving terminal with four drive-through bays
• On-site weight station
• Office space with a conference room and laboratory
Source: Portfolio Luxury Real Estate
The 54,000 square-foot facility employs about 60 people who will lose their jobs in phases during May, August and September, said Joyce Hodel, associate director of corporate affairs for Kraft.
“We are managing the phase-down of production at Bentonville to align with when we can get the needed supply of ingredients elsewhere,” Hodel said.
Tom Ginn, vice president of economic development at the Bentonville/Bella Vista Chamber of Commerce, said the plant is gradually winding down production. The chamber is working to find a tenant for the industrial building in the meantime.
The property at 507 S.E. E St. is listed with Portfolio Luxury Real Estate for $1.89 million. The listing says the manufacturing facility sits on 6.59 acres and includes production areas, office space and a laboratory. The plant, some parts of which were built in the 1940s, is in “pristine condition,” according to the listing.
“We’re trying to see what kind of tenant can go in there,” Ginn said. “The building is in gorgeous condition. It’s been very well taken care of.”
The plant is a unique property that could appeal to a specific tenant, according to Michael Harvey, chief operating officer of the Northwest Arkansas Council.
“It is unique in that it was food production facility,” Harvey said. “When you do have a food production consultant pop up, they are looking for those nicer buildings.”
Plants such as Kraft’s have been built to meet U.S. Food and Drug Administration regulations, and that could give the property an edge, he said.
The downside is an economy that has slowed the last six to nine months. While local businesses are booming, the area isn’t attracting a lot of outside investment, Harvey said.
“The investment environment is one of caution right now,” he said. “It was brisk for the first half of 2012, but really slowed down in the second half. That has continued into this year.”
Patience is key in finding the right tenant, he said. Another option is for the city to repurpose the building for another use, he said.
The city will be faced with significant loss of water and wastewater revenue when the plant closes. The plant paid about $600,000 a year in wastewater fees, roughly 5 percent of the Wastewater Department’s overall revenue, according to Gary Wilson, billing and collection manager for the city. The plant provided about $250,000 in revenue to the Water Department.
“Kraft is a significant user,” Mike Bender, director of Public Works for the city, told the City Council during a rate study last year. “There’s not a lot of industrial users here.”
The plant closing figured into a wastewater rate increase approved by the council last year and enacted in March.
One of the largest impacts to the economy will be the loss of jobs, Ginn said. The state’s Dislocated Worker Task Force met with plant employees in October to help them transition to other jobs, he said.
Much of the staff at the Kraft plant has been employed there for upwards of 10 years, leaving some in need of training, Ginn said. Hodel said several employees will transition to other Kraft sites, but she was unsure of how many last week.