Merced closes deal expected to yield 75 jobs

03/04/2014 6:58 PM

03/04/2014 10:59 PM

Most of the 75 jobs expected to accompany an almond processing plant in Merced could go to locals looking for work, according to officials involved in the transaction.

During Monday’s meeting, the Merced City Council unanimously voted to sell a former Pepsi bottling plant in the city for $1.14 million to Sun Valley Nut LLC.

Niniv Tamimi, a consultant and real estate agent for the Turlock-based company, said Sun Valley Nut will relocate its Bakersfield operation to Merced. He said it is “unlikely” that many of the employees will transfer with the blanching plant, so many of the jobs could go to people in and around Merced.

“(The relocation) should boost employment and improve the facility,” Tamimi said, adding that the West Avenue site likely has space for several years of growth.

Although he did not give the exact wages for plant workers, Tamimi called them “competitive” for the industry.

New jobs would be good news in Merced County where the unemployment rate in five of the six cities is more than 14 percent, according to the latest state labor figures. The city of Merced’s unemployment rate sits at 14.1 percent.

Sun Valley Nut plans to add $7 million worth of equipment to the plant, according to city records. Such additions would raise the value of the building when assessing property taxes.

Frank Quintero, Merced’s economic development director, said the city cannot make any requirements that new employees be Merced residents but did ask the company “to make their best efforts to hire as many locals as possible.”

Quintero said the city received other offers for the three buildings, covering 134,304 square feet, before picking Sun Valley Nut. The plant and two landscaped strips included in the sale sit on 15.05 acres.

A broker hired by the city estimated the site to be worth $2.6 million based on its size and location, Quintero said, but the facility has a number of drawbacks that make it worth less. About 7,200 square feet of office space on the site is unusable under the Americans with Disabilities Act.

Other factors that brought the price down, Quintero said, were that the buyer would have to make the flooring uniform inside the three buildings and replace as much as $500,000 in copper wiring stolen from the complex.

Though there were higher offers for the plant, Sun Valley will provide 10 times the number of jobs. “We did have other offers that were a bit higher – none crossed over $1.5 million – but they would generate between five and seven jobs,” Quintero said.

The contract for sale came before the council last month, but Sun Valley Nut asked to put the decision on hold until this week’s meeting while officials double-checked the city’s drought plans.

Michael Wegley, Merced director of water resources, said drought should not be a problem for businesses in Merced. Companies as well as residents use groundwater pumped from wells, he said, so the water supply is “adequate.”

Sun Valley Nut was established in 1989 in Stanislaus County. The company purchases, processes and sells millions of pounds of almonds each year, according to city records. Much of the almond crop comes from the San Joaquin Valley.

Sun Valley Nut’s sister company is Sunland Farming, an agricultural operation.

Pepsi Bottling Group, which left the building in 2010, had 42 employees.

Robert Morris, director of the county’s Workforce Investment department, said Worknet will be a source for finding workers for the Sun Nut once it opens.

Morris said the company will primarily look for sorters for the almond production line, as well as forklift and other machine operators. “Those are jobs that our people here can do,” he said, adding that Worknet offers forklift training.

The agency has not yet received the orders for jobs from Sun Valley Nut, Morris said, because the West Avenue site will undergo improvements.

Morris recommends visiting regularly for updates and information on when the jobs become available.

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