The Day They Came to Town.
I received a phone call from Paul Martini,
the District Manager of Pepsi North America Concentrate Division
in Valhalla, NY. He was looking for between 150,000–500,000
SF of warehouse space in the Harrisburg, PA, or Newark, NJ, or Philadelphia,
PA areas. Not only did Pepsi require an ample amount of space to
start, they also needed room for expansion in case they started a
bottling operation. The facility would need a walk-in cooler and
a flammable room. The target date to occupy the space was September
or October, 2001.
The property needed to be further defined,
but at this point we knew it was a minimum of 150,000 SF with
at least 15 docks. It also needed to have the ability to expand,
at a minimum, by 125,000 SF.
The need to help them understand the
market and current conditions, such as rates and supply, became
a significant part of my role in this transaction. The need
for market information was intense.
April 25, 2001:
I met with Paul and his supervisor,
Lazlo “Latzi” Molnar to tour properties within
the targeted Harrisburg region, which became the front-runner
over Philadelphia and Newark.
May 21, 2001:
Southpoint, in Carlisle, a First Industrial Realty Trust property, was
shaping up nicely as this 182,500 SF became the building of choice.
There would also be a larger building
(approximately 300,000 SF) to be built at a later date (by First Industrial)
into which Pepsi would be relocated (about 0.5 miles away) if bottling
operations became necessary.
Until that decision was made, the 182,500
SF would suffice as their distribution center.
July 3, 2001:
A major environmental situation developed.
An environmentally contaminated site over two miles away was
troubling Pepsi’s Risk Management.
Even though the Pepsi building had sewer
and public water, any future inferences of contamination (perhaps by a
competitor), especially for a bottling operation, in such close proximity
to the contaminated site could be a public relations nightmare.
After a lot of work and in-depth analysis
of the situation, the site was abandoned.
At the same time this setback occurred,
Pepsi was purchasing Quaker Oats. Now it made more sense to wait and see
what the distribution needs for Gatorade and other Quaker items were, in
addition to the Pepsi products.
This was unfortunate for all of us as
we had invested so much time and energy, but they had to do what was best
for the business and it appeared that the time to revisit this project
would be in the fall.
September 28, 2001:
The site search resumed, after the summer
pause. For a period of about three weeks the requirement was
directed toward Allentown and away from the Harrisburg area.
Unfortunately, for me, Pepsi already had a broker relationship
in the Allentown market. I wished Paul well and told him I
was still available if it came back to Harrisburg. For those
three (3) weeks I was uninvolved in the process. Then I received
a call–it was coming back to Harrisburg. A great call
October 27, 2001:
We toured Harrisburg again, updating
our past information and quickly narrowing the search to two
buildings–one in the Upper Allen Industrial Park on the
West Shore, the other on I-81 north of Harrisburg, at Route
By all accounts, the West Shore building
should have worked the best and it was the one on which we focused the
As things progressed we ran unto some
issues, which made me think we didn’t want to have all our “eggs
in one basket” again.
I called the second choice building owners
(at Route 39 & I-81) and asked if they would like to run a “parallel
path” to the first choice building.
They agreed that Pepsi was a tenant for
whom they were willing to do this.
November 16, 2001:
The conversation on both buildings continued,
one openly and actively and the other quietly being pursued
as the alternative choice. There was a definite intensity by
the “second place” owners. So much so that we opted
to have conference calls two to three times a week (even on
Saturdays) to keep the parallel path moving.
As it turned out, our first choice required
additional sprinkler protection due to the flammable room. All of a sudden,
due to that cost, our second choice was pushed into first place. The hard
work everyone invested paid off. Pepsi didn’t have to go through
the agony of another lost building with no alternative. The switch was
made and Pepsi was able to move their project along with no delay.
January 14, 2002:
The lease was signed and I was now gathering
more information on labor rates and employment statistics.
I even went to a Saturday morning job fair sponsored by the
distribution tenant in the adjacent building, to gather the
latest information on labor rates and to get a general sense
for the availability of different classes of employees: fork
lift operators, general
warehouse workers, and managers.
March 8, 2002:
The walk through took place and the
punch list was developed. Pepsi moved in shortly after and
their overall company distribution plan was starting to fall
into place. I was still actively talking with Paul every 2-3
Until all the questions were answered,
the level of service never decreased. Paul was an excellent individual
with whom to work, Pepsi was a great client to service, and we developed
an excellent relationship that continues to this day.