It was shaping up as a deep, long-lasting wound for Sacramento – a big, empty factory in a hardscrabble neighborhood, the loss of a signature employer at a time of sluggish economic growth.
On Wednesday, though, the recently shuttered Campbell Soup Co. plant in south Sacramento got a new owner and the promise of a new role: multi-use industrial park.
Five months after the last can of soup rolled off the assembly line, the 66-year-old factory has been sold to a partnership led by a Los Angeles real investment firm called Hackman Capital Partners. The firm said Wednesday it’s having discussions with possible tenants; likely uses include food processing, warehousing and other types of manufacturing.
Although some tenants could sign leases soon, the transformation won’t happen overnight, said Michael Hackman, the firm’s founder and chief executive.
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“We look at this maybe as a five-year time horizon,” he said. “We’re committed to making this thing work.”
Campbell’s closure, announced last year, was a jolt on multiple levels. It erased one of Sacramento’s signature employers and 700 high-wage, hard-to-replace blue-collar jobs. And because Campbell moved production to newer factories in other states, the decision triggered a brief political controversy, renewing the debate over the cost of doing business in California.
The arrival of a new owner brought optimism to elected officials and leaders of the struggling Franklin Boulevard neighborhood where the plant sits.
“This is certainly wonderful,” said Monsignor James Church of nearby St. Rose Catholic Church.
Barbara Hayes, president of the Sacramento Area Commerce and Trade Organization, compared the purchase to the re-use of McClellan and Mather Air Force bases, which became business parks after they were closed by the government.
“It’s a real asset for the region, as much as the military bases were in the 1980s and ’90s,” she said. “Yes, a much smaller scale, but the same kind of opportunities.
“We’re very excited to have the opportunity to work with Hackman,” Hayes added. “They’re a phenomenal company for what they do, which is acquisition of industrial properties and redevelopment.”
Hackman Capital bought the plant in partnership with Rabin Worldwide, a San Francisco auctioneer, and Capital Recovery Group, an asset specialist in Connecticut. Price wasn’t disclosed. The three firms have teamed up before on big industrial deals and control a portfolio of properties around the country.
The Campbell acquisition includes 1.6 million square feet of space spread over a complex of buildings, along with manufacturing equipment and 129 acres of land. The equipment will be auctioned off in mid-February.
Hackman said roughly 50 percent to 60 percent of the property “is highly usable” and could be leased quickly, with minimal upgrades. Much of that is warehouse and storage space.
“We already have people who are looking at it,” said Ryan Smith, vice president of asset management at Hackman Capital.
The remaining space would likely need to be substantially renovated or replaced altogether. But there also might be tenants interested in occupying those facilities as they stand.
Where Campbell saw an outdated facility, Hackman found a property with tremendous upside. The drawing cards include on-site water wells, inexpensive power, considerable sewer capacity and the ability to process 2 billion gallons of water a year. Those assets, along with the proximity to freeways, make the property viable for manufacturing, particularly food processing, according to area real estate experts.
“That is a substantial infrastructure that would be difficult if not impossible to replace,” Hackman said. “We can accommodate almost any industrial user.”
He added that a portion of the property could be converted into retail space, too.
Hackman has a head start of sorts: Silgan Holdings Inc., a maker of metal food containers that has rented space inside the factory for years, remained in operation after the Campbell shutdown and has agreed to a new multi-year lease. Silgan employs about 60 workers at the site, Hackman said.
He said Silgan’s continued presence will make it easier to recruit food processors to the location.
Besides serving as a beacon of economic hope in a tough neighborhood, the Campbell plant long represented Sacramento’s Big Tomato agribusiness heritage. Many of the region’s canneries and processing plants –Libby, Del Monte, Tri Valley Growers – have been torn down or converted into office parks or other uses.
It would make perfect sense to preserve at least a portion of the Campbell site as a food processing facility, said Rob Neenan, president of the California League of Food Processors.
“It has proximity to freeways and production ag,” Neenan said. “And there’s a lot of pluses in those facilities.”
Sacramento County Supervisor Jimmie Yee, who represents the district that encompasses the site, said the property has “huge” potential: “There’s so many different things they could do there – it’s a large property with so many amenities.”
Garrick Brown, research director at Cassidy Turley commercial real estate in Sacramento, said it makes more sense to carve up the property than to find a single tenant for such a massive space. “Finding small users, chopping it up, will be easier,” he said. Demand for warehouse space is particularly strong, he added.
Reports of a buyer for the property surfaced in October, but officials said the deal had not been completed and the prospective buyer’s identity was kept under wraps.