Pilgrim's Pride pushes back on planners

Pilgrim's Pride pushes back on planners

July 22nd, 2012 by Ellis Smith in Business Around the Region

A Pilgrim's Pride employee unloads a chicken truck at the chicken processing plant in downtown Chattanooga.

Photo by Dan Henry /Times Free Press.

Pilgrim's Pride won't be flying the coop anytime soon, company officials said, despite a new development plan that calls for the poultry plant's removal from Chattanooga's Southside.

The new 20-year proposal calls for the chickens to cross the road and not come back, though planners want to find a compromise solution to save the company's 1,370 Chattanooga workers.

Architect David Hudson called the plant "the biggest impediment to development in that area," because of the pungent bouquet that residents say can rival a rotten egg on bad days.

Local environmental officials acknowledged that there have been some ruffled feathers over the plant's fowl odor, but ultimately there's no legal limit for a nontoxic stench, said Amber Boles, a spokeswoman for the Chattanooga-Hamilton County Air Pollution Control Bureau.

The plant fully complies with all pollution regulations and has added extra measures to mitigate the smell in recent years, though it is not legally required to do so, Boles said.

"We get the most complaints when the chickens have gotten wet, kind of like the wet dog smell," Boles said. "Wind certainly makes it worse, and when it's wet and windy, it really carries that smell."

The planners' proposition calls for Pilgrim's Plaza, a hypothetical mixed-use development, to replace the Southside processing plant as part of a larger vision that could cost hundreds of millions of dollars over the next several decades.

A team of urban designers presented the project last week to a group of more than 200 government officials, developers and architects at an urban design challenge sponsored by River City Co.

But Pilgrim's Pride says the nonprofit's planners are counting their chickens before they hatch.

"Pilgrim's has no intention of moving our facility in Chattanooga," said Heath Loyd, the complex manager for Pilgrim's Pride Chattanooga. "We have been a part of the community for well over 50 years and hope to remain a positive contributor to the economic engine of Chattanooga for years to come."

In addition to being Chattanooga's 10th biggest employer, Pilgrim's two downtown plants also support about 170 rural chicken growers who sell nearly 230,000 birds each day.

Nearby Koch Foods employs more than 500 other workers at its Kerr Street poultry processing plant on the Southside and helps support other area chicken growers.

Tim Spires, president and CEO of the Chattanooga Regional Manufacturers Association, said the group supports Pilgrim's decision to remain downtown.

"As most of us are aware, manufacturing is the fundamental backbone to the economic stability of any area," Spires said. "Based upon our understanding, we perceive that this is a very preliminary proposal."

That's true, as Hudson acknowledged in his presentation last week.

But many of the city's downtown landmarks have been built on former manufacturing sites, including the Tennessee Aquarium, Big River Grille and Renaissance Park on the waterfront and Warehouse Row, Finley Stadium and the First Tennessee Pavillion on the Southside.

Then and now, the argument boils down to which comes first, the chicken or the egg?

In areas where shrinking industries have left vacant buildings, new tenants have moved in and repurposed old buildings with no problems.

But when developers want to move in while companies are still operating, planners have to be mindful of protecting the employment base upon which downtown is built.

The "live, work and play" concept for downtown doesn't work if there's no work, said J.Ed. Marston, vice president of marketing and communication for the Chattanooga Area Chamber of Commerce.

"It would be very devastating to this area were we to lose the 1,500 Pilgrim's Pride jobs," Marston said.

The key decision rests with the company, Marston said, which has owned the property and slaughterhouse for decades.

"On the one hand it's important to look for opportunities to progress, but on the other hand it's important to make sure progress doesn't roll over the little guy," Marston said. "We have had situations where for a variety of reasons we were able to broker with two companies, a rearrangement of some of their operations in order to accommodate an expansion. So there is a precedent if the company is willing."

Fred Hetzler, CEO of nearby Eureka Foundry, knows what it's like to be one of only a handful of manufacturers remaining in the area.

He also knows that relocating a viable manufacturer would be costly under most scenarios.

"For us, it would be very expensive for us to move to another location because of infrastructure we have in the plant -- the heavy cranes and equipment," Hetzler said.

He says that city leaders talked to him about relocating the foundry when the neighboring Finley Stadium was first planned.

But Hetzler said "we worked hard to fit in" instead. The foundry strictly controls its emissions, and helped create the signs for the stadium.

If things had gotten ugly and regulators had passed rules to limit his activities, "we'd have to produce less which would mean laying off people or find another place to do this," said Hetzler, who employs 75 full-time workers at the foundry. "It's a very, very complicated world, and there's no simple solution."

Chicken chase

Tom Kale, owner of real estate firm Commercial Associates, thought he had found a simple solution for Pilgrim's perfume in October 2010.

Kale, who works next door to Pilgrim's Pride, tried to get chicken officials interested in more than 300,000 square feet of refrigerated and freezer space near the Chattanooga airport that was sold this month by the former owners of Bi-Lo for about $5.2 million.

"I had an ulterior motive to get rid of the smell," Kale said. "But that said, I also don't like to offer a criticism and not a solution."

His idea was to consolidate both of Pilgrim's chicken facilities in one building, he said.

"If we've got to spend X amount of dollars to move the chicken plant to somewhere else within the city to save the jobs, then we will reap the benefits tenfold through the redevelopment of the rest of the Southside," Kale said.

He worked for more than a year to market the facility to Pilgrim's Pride through River City Co. and city officials, but got nowhere.

"There was a local person from the local plant that came out and looked at the facility, and that's as far as it went," he said.

He still hopes that company officials will consider a move.

"The world changes, things change, focus areas shift, plants move, and it just may be that the timing had finally caught up with that particular plant," he said.

Over easy

Though the chance to chase the chickens out to the airport may have been scrambled, planners aren't giving up yet, said Kim White, head of non-profit developer River City Co.

"We don't want to lose thousands of jobs and kick out an employer," White said. "But long-term as we look at development, we need to find a win-win."

Pilgrim's has made several moves to cut staff and invest in new equipment, moves that could signal that the company is open to change, White said.

"As a company, they've been looking at consoloidating efforts, so maybe there's an opportunity here for them to get into a bigger facility," she said.

The key lies in coordinating with Pilgrim's Pride itself and working to find new buildings that fit their long-term strategy, she said.

Such a plan would include municipalities, foundations, private individuals and even CARTA, which would need to ramp up its operations to transport the workforce to any new plant.

"It will take a concerted effort in working with them and working with transportation," White said. "Obviously, they're looking at their business differently all the time."

For the present, however, Pilgrim's Pride is happy right where it is, said a spokesman with the company's corporate parent, Brazil-based JBS USA.

"We employ about 1,370 employees in that area, and our payroll is over $40 million, including taxes and benefits," said the spokesman, who asked not to be identified. "We're one of the larger employers in that area, and we have no intentions to leave."