San Marcos Mercury | Local News from San Marcos and Hays County, Texas

September 17th, 2010
US Foodservice breaks ground near Buda

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An artist’s rendering of a US Foodservice facility for which ground broke Thursday. It is expected that the facility will be completed in October 2011. US Foodservice graphic.

STAFF REPORT

BUDA — Following a long battle of lawsuits and lawmaking, U.S. Foodservice broke ground Thursday on its $50 million regional distribution center east of Buda.

Representatives from U.S. Foodservice were joined by officials from Buda and Hays County for the ceremony.

“We are proud to become neighbors in this terrific community,” said John Fowler, the Austin Division President for U.S. Foodservice. “We are thrilled to turn the first shovels of dirt to begin site preparation for facilities that will allow us to better serve customers as far north as Killeen and south to the Texas-Mexico border.”

US Foodservice first proposed the site at CR 118 (Firecracker Drive) and Turnersville Road late in 2007, when it asked the county to set help finance road improvements in the area with a special taxing zone that would pay for itself out of the increased property values in the area.

The county agreed to loan Illinois-based US Foodservice $2,689,160. The company will pay the money back in 20 years or less at four percent interest. US Foodservice must repay some or all of a $700,000 Texas Capital Fund grant unless 51 percent of employees hired within the grant’s three-year term qualify as low or moderate income persons or families.

Former Buda Mayor Jim Hollis and Buda realtor Christopher Juusola sued the City of Buda in October 2009 on behalf of 788 residents who had signed a petition in favor of a special election to overturn or affirm a city council land use change. The land use change allowed light industrial uses on 95 acres of extraterritorial jurisdiction land, 40 acres of which is desired by US Foodservice for its proposed facility just east of Buda’s extraterritorial jurisdiction.

Last November, the state’s Third Court of Appeals ruled that changes in land use plans are not subject to referenda because Buda’s city charter only specifies “ordinances” as being eligible, and the land use change was a resolution. The justices also ruled that a land use change decision is not subject to a referendum because it is not “legislative in character,” which court precedent defines as policy-oriented and permanent in character.

In June, the Texas Supreme Court declined to hear the case, exhausting the legal options for opponents of the facility.

Since then, US Foodservice has moved quickly. In August, county commissioners approved the loan by a 4-1 vote, with only Hays County Judge Liz Sumter (D-Wimberley) in opposition. Earlier this month, US Foodservice completed the land purchase.

Completion of the new center is planned for October 2011. The company said its relocation from Austin will facilitate better management of its truck fleets, lower operating costs through improved energy efficiency, a reduction of the division’s carbon footprint, and allow the company to serve more customers. U.S. Foodservice said the facilities are expected to become the base for more than 400 personnel within the next 10 years.

Among the speakers at the groundbreaking ceremony were Buda Mayor Bobby Lane, Hays County Precinct 2 Commissioner Jeff Barton (D-Kyle), Buda Economic Development Corporation Executive Director Warren Ketteman, and U.S. Foodservice Southwest Region President Greg Schaffner, who initiated planning for the new facilities when he headed the company’s Austin Division.

Program speakers were joined in turning first dirt on the project by Buda City Manager Kenneth Williams, Buda Area Chamber of Commerce President Dick Schneider, and Texas Capital Grants Fund Administrator Karl Young.

“We are deeply appreciative of the efforts of everyone who has brought us to this day,” said Schaffner, who specifically credited Lane and the Buda City Council, Barton and the Hays County Commissioners Court, and support provided by the local business community.

“Buda and Hays County have joined together to help make this outstanding economic development project possible,” Barton said. “We will benefit immeasurably from the well-paying jobs with full benefits and the tax revenues and community support that US Foodservice will provide in the coming years.”

Earlier this month, the foodservice distributor completed the purchase of the 40.17-acre site in the Sunfield Municipal Utility District (MUD). The company will build 290,000 square feet of office and warehouse space at the location, which is in Buda’s extraterritorial jurisdiction (ETJ).

The site at the intersection of Turnersville Road and CR 118 (Firecracker Drive), could eventually be expanded with a second phase of 100,000 to 200,000 square feet of additional space, potentially bringing the total investment to as much as $85 million.

Hays County will upgrade the two roads adjoining the site with its $2.8 million expenditure and the loan from the Texas Capital Fund.

To begin, approximately 250 persons will work at the new facilities, which replace a distribution center dating back to the 1960s in east Austin. An additional 77 jobs are expected at the site within three years of completion of the facility. The company said a total of 157 additional positions might be created within 10 years.

The project is being designed and constructed by ESI Design Services of Wisconsin, which represents U.S. Foodservice nationally. Plans call for constructing facilities that will quality for Green Building Council LEED certification.

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