A perspective from Oregon’s mid-Willamette Valley

Gatorade land: Millions at stake

Written September 22nd, 2017 by Hasso Hering

This farm land along Ellingson Road is owned by SVC Manufacturing Inc, a PepsiCo subsidiary, and zoned for industrial development.

PepsiCo has been unable so far to sell the large tract at the south end of Albany it bought about 10 years ago for a Gatorade manufacturing and bottling plant that was never built. Now it will try again to sell the land, and the city council is willing to help.

Under the terms of the 2010 settlement with the city after PepsiCo canceled the Gatorade project, the company paid Albany $20 million right away and agreed to pay another $5 million when it sold the land. The company has been asking about $20 million for the property.

The property on the south side of Ellingson Road measures roughly 400 acres, with about 241 acres of the total usable for industrial development. The site has been zoned IP, or “industrial park,” but it remains in farm use.

The company recently asked the city if it would accept less than the $5 million if that would help sell the land, and the council discussed it at an executive session. I wasn’t there and asked about it afterward. Assistant City Manager Jorge Salinas replied: “During the Sept. 13 executive session, we obtained direction to let PepsiCo know that the city may have some flexibility if the right developer or company was interested. The flexibility for some or all of the proceeds could be used as an economic development incentive.”

PepsiCo had taken the property off the market, I’m told. Now, informed of the city council’s view, the company plans to relist the land with an agent experienced in the local market.

One hurdle to buying the land for a big industrial plant is the development cost, which includes providing access from US 99E (Pacific Boulevard). The Gatorade project would have required an eastward extension of 53rd Avenue, including a bridge across the Union Pacific tracks. At Ellingson Road, the tracks are considered too close to the highway to allow for all the truck movements a big industry would likely entail.

Albany had formed an urban renewal district to finance the new road and bridge when the Gatorade project was still alive. The city dissolved that district after the project died.

After the settlement left the city with $18.5 million in unexpected cash ($1.5 million had been paid to the law firm that negotiated the deal), then-City Attorney Jim Delapoer proposed using most of the windfall to build the road and bridge needed to make the Gatorade land usable for industry. The council considered it but eventually set the settlement money aside as a reserve. Most of the cash has been spent on other projects in the years since. (hh)








12 responses to “Gatorade land: Millions at stake”

  1. Gordon L. Shadle says:

    Albany (and its hired guns) negotiated a settlement that was $15 million above and beyond the original $10 million Pepsi offered. But, as the passage of time has shown, probably sacrificed future deals that may have exceeded the $25 million by a large amount. Why? Because corporate location teams all over the world clearly put a fat red “X” on Albany, Oregon, Nice job, Albany.

    And I was never a fan of Jim Delapoer, but the City Council screwed up big time by not following his advice. Instead, the $18.5 million was piddled away on pet projects. Again, nice job, Albany.

    My advice to SVC – Since the lawsuit, the City of Albany has done nothing to make your land attractive to corporate clients. And now the City wants to control who you sell the land to? (“the right developer or company”)
    Good luck with that.
    Run, don’t walk, away from anything the City of Albany offers or tells you. Given the series of stupid decisions they have made, the City has zero credibility on business matters. Simply put, the City of Albany can’t be trusted.

  2. Steve Reynolds says:

    “Most of the cash has been spent on other projects in the years since. (hh)”

    HH, you’re throwing us red meat. Your lures are better than a spinner during Coho season…

    If it wasn’t for the Pepsi money, they would probably be ripping out all the trees around Thornton Lake right about now. Looking at the list of what projects this was spent on; Ok, we can debate. Maybe we should get an update where we are since this was done almost 5 years ago, it would probably be good for everyone since it’s still such a raw issue.

    • $2,160,000 to reimburse city water and sewer capital funds and the city risk management fund for work on the Gatorade project.

    • $790,000 to pay off bonds issued to pay pension obligations.

    • $75,000 to OregonWetlands LLC, a wetlands mitigation bank that had set aside space for the Gatorade project that the city then had no use for.

    • $3,348,794 lent to the Timber Ridge Local Improvement District.

    • $1,000,000 to help buy the land for the East Thornton Lake Natural Area.

    • $46,516 for studies of new police and fire stations.

    • $30,000 for a new wetland delineation in case the city wants to extend 53rd Avenue eastward as planned for the Gatorade project. The state said the previous delineation had expired.

    • $840,000 to save customers from a sewer rate increase that otherwise would have been needed in 2011.

    • $68,600 to fund the Historic Albany Recovery Program, now concluded.

    • $20,000 to support the Albany Microenterprise Program conducted by the Linn-Benton Small Business Development Center.

    • $1,280,000 lent to the Oak Street Local Improvement District as interim financing.

    • $5,000 toward a study of Albany as a prime location for distribution centers.

    • $45,000 lent to Albany Steamworks, a proposed microbrewery on Water Avenue.

    Should we have subsidised the sewer rates for a year? Maybe/Maybe not, most people probably didn’t even notice the savings. PERS, that’s a tail waging the dog issue, the city is just trying to manage it the best they can. If I’m not mistaken wasn’t a large portion of this loans? Was it paid back? I know some was used for creating a new jobs program at LBCC, is it working?. Some of these other line items, I think city council needs to go back and revisit, check the metrics, a lessons learned if you will..

    I’m not sure if there’s a document out there that gives us the final narrative and maybe a grade on how we did as a community. It would be interesting reading.

  3. Eric says:

    I would be curious to know if there’s an accounting anywhere of what all the PepsiCo money has been spent on. I’m not looking to fault-find – just curious, is all.

  4. Ray Kopczynki says:

    There you go again Gordon. Flogging your dead-horse falsehoods. LOL

    100% BS #1:
    “Because corporate location teams all over the world clearly put a fat red “X” on Albany, Oregon” Show us a single[!] instance. You can’t because it’s just more of your never-ending whining and quite tiresome rumor-mongering…

    100% BS #2
    “the $18.5 million was piddled away on pet projects.”
    The city has used $$ reduce water bills, added to job-creation through the Pipeline project, etc. Gordon just doesn’t like the choices council made. Of course, he’s gone and has no skin in the game…

    100% BS #3
    “the City of Albany has done nothing to make your land attractive to corporate clients.” The city does not own the property — there is nothing it can do to change the property. Gordon knows that too.

    100% BS #4
    “the City has zero credibility on business matters.”
    LOL — The city is doing quite well Gordon. The financial reports we have prove that in spades.

    100% BS #5
    “the City of Albany can’t be trusted.”
    I’ll trust the city over your whining – any day. :-)

  5. Warren Beeson says:

    Now Ray, tell us what you really think. Don’t pull your punches. Lol!

  6. John Hartman says:

    I would advise Pepsi that it would do better by honoring it’s committments in the first place. Pepsi proved by its own dishonorable actions that corporate America is only truthful when truth is convenient or profitable. Businesses will lie, tell the truth, or simply BS until profitability returns. The Albany City Council should hold Pepsi’s feet to the fire for the full $5-million.

  7. Rhea Graham says:

    Let’s build a huge Cannabis and Hemp Industrial Park there.


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