With so many buildings and real estate available, should bakers and snack manufacturers go green or brown? What color is best for you?
Steve O’Donnell knows the pros and cons of building a “greenfield” bakery from the ground up vs. converting an existing, or “brownfield,” facility into a food safe operation. When Hill Country Bakery started up in San Antonio, the sweet goods manufacturer selected a residential neighborhood where many of its employees lived or could easily walk or take a bus to work.
“There weren’t 10 acres of land sitting there for a greenfield project,” noted Mr. O’Donnell, managing partner of the 17-year-old company. “We had to take older buildings and bring them up to code. The challenges involved getting the right permitting and upgrading utilities.”
Hill Country had to remove asbestos, lay new floors and install new plumbing, electrical and heating, ventilation and air-conditioning (HVAC) systems on its original 12,500-square-foot bakery and its subsequent 28,000-square-foot one in 2005. In all, it spent $9 million on the two projects.
Its newest expansion, completed in 2011, was a 40% greenfield project. Unlike the older buildings, Mr. O’Donnell noted the newer addition to the facility has 30-foot high ceilings allowing it to install spiral coolers and freezing systems.
“In the end, I believe it’s cheaper to greenfield than it is to brownfield,” he said.However, such investments can be ameliorated by government subsidies. Hill Country eventually received about $400,000 from the San Antonio Brownfields Program, which began in the fall of 2011 with the goal of assisting property owners and developers transform vacant eyesores into attractive properties and community assets.