Regional Produce Market, Sysco may have to leave Phila. to grow

The Philadelphia Regional Produce Market has been trying for six years to get growing room. Bill Tubb, the local chief executive of Sysco Corp., the big restaurant-supply firm, says he can top that.

His company has been working for nine years to get a larger site in Philadelphia, and is about ready to move to New Jersey if it cannot do so.

Both enterprises have identified South Philadelphia sites that would work, and both are at the mercy of warring political and business forces.

They employ a total of 1,600 people - 500 at Sysco and 1,100 at the produce market. If they were able to expand, they say they would hire several hundred more.

"We want to stay in Philadelphia," Tubb said, because his employees and customers are used to the South Philadelphia location. In May, it appeared that a new facility would be under construction by now, but a threatened lawsuit from maritime interests could cause a lengthy delay.

Tubb said his bosses in Houston were telling him that, if he could not get a deal soon, he should move to a site that would work in West Deptford, Gloucester County.

The 35-member produce market association, which considered an offer in 2004 to move to Camden, says several of its largest members are losing business because of capacity constraints. They are on the verge of leaving the market and also probably would wind up in New Jersey, market officials said.

This scramble for sites on which to expand has its roots in the 2000 decision by state and city political leaders to build the Phillies' new ballpark in the sports complex instead of Center City. Building what is now Citizens Bank Park required taking 85 acres from the 50-year-old Food Distribution Center.

Tubb said he and his Sysco predecessors "have worked with the PIDC, the PRPA - all the acronym agencies - and with real estate people.

"There's only one site in Philadelphia that will work," he said. That is the 50-acre Pier 98 Annex, across Columbus Boulevard from the Delaware River. "The company wants 50 acres. It can't build one of our modern centers on less than 45 acres," he said.

Port interests have told all the parties involved that they will file a lawsuit soon after Labor Day to block putting Sysco on the Pier 98 site, owned by the Philadelphia Regional Port Authority, a state agency. Although now used only occasionally, they say it is needed for future port expansion.

Sysco, with 47,500 employees at 170 locations in the United States and Canada, is a major player in the hospitality industry. It reported sales of $35 billion during the 12 months ended June 30.

Sysco's space constraints have stunted its growth in Philadelphia, Tubb said.

Its operation on Packer Avenue, near the sports complex, is a 30-acre hodgepodge of temporary structures and old buildings dating back 46 years. It handles 1,000 fewer items than the company's locations in other cities, and it is costly and inefficient to operate, Tubb said.

Sysco does for independent restaurants what big restaurant-chain distribution centers do for their eateries: provide timely deliveries of everything from soup to nuts, silverware, salt shakers and other supplies. Sysco also provides the independents with staff training, help with menu planning, and a test kitchen for food-service operations.

Last week, operators of school lunchrooms visited Sysco's cramped facility to see and taste items available this year, from star-shaped hash browns to crustless peanut butter and jelly sandwiches.

The produce market and Sysco deals are linked. After six years of being told by politicians to study first one site, then another - a total of four sites - the produce market learned in early June that the Pier 98 site it once studied was being offered to Sysco, as had been rumored for months.

Sysco is now just west of the produce market, at Seventh Street and Packer Avenue. Its pending move, market officials decided, could be a solution to their problem. So they have prepared a preliminary plan to expand their facility onto land Sysco would vacate and are working on detailed cost estimates.

To speed things up, Sonny DiCrecchio, general manager of the 35-member association that runs the market, said he would gladly share all the foundation tests and studies and other knowledge of the site with Sysco.

The produce market's latest plan has been presented to state Sen. Vincent J. Fumo (D., Philadelphia) and Gov. Rendell's staff. Fumo's press aide, Gary Tuma, said it would be premature to comment. He also declined to comment on Sysco's proposed move to the Pier 98 Annex site.

Tubb took over the local Sysco operation in March. Since then, he said, people from the port have called to "yell at me" for refusing to consider alternatives to the Pier 98 Annex site. Sysco has studied other sites, he said.

"I want to become a part of the port community, a voice for getting more of Sysco's business at the Port of Philadelphia. If the port grows, more people will be hired. That means more people eating at restaurants and more business for my company," Tubb said.

Sysco also is major food supplier to the military overseas and a food importer.

Brian J. Preski, chairman of the Philadelphia Regional Port Authority, said last week that the state agency's legal staff was still working toward a deal with Sysco. Preski said the work was progressing with the blessings of Rendell's staff.

A commitment that Sysco bring more business to the port likely would be part of any final agreement, he said.