Work could begin soon on a $700-million, food-industry development on the site of Ford’s St. Thomas plant, creating more than 1,500 jobs by the time it’s built, sources close to the talks say.
Ford of Canada and a local business group, including Blue Forest Environmental Development, have reached a deal in principle on the sale of the 253-hectare site and it’s “now in the hands of lawyers,” said one official.
“This has dragged on and both sides want to get it done. They expect to make an announcement shortly. I know they are working hard . . . to get it done.”
The prospective owners are in talks with several businesses in the food sector which, after the development is built over five to 10 years, could employ more than 1,500, according to a KPMG report commissioned by the new ownership group.
If the sale proceeds, look for much of the sprawling site’s 60 hectares of parking lots to be torn up and 22 hectares of building to come down.
The redevelopment could take 18 to 24 months to complete, but some business could be on site before then because it could be built in stages.
For a region trying to do more to leverage its location in the nation’s richest farm belt, the project could become an important catalyst.
“It is outstanding news,” said Gerry Macartney, chief executive of the London Chamber of Commerce. “This could add to our growing food cluster, from seed to end processing.”
He envisions the London area becoming a “beacon” for agriculture industries and said the development could be its centrepiece, attracting more industry.
“Other agricultural processors could locate here because of the capacity. It would be a great focal point — we are the heartland of the agricultural sector.”
Ford was asking nearly $23 million for the site. It’s not known what the selling price is, “but both sides are happy,” said the official.
The project would have special meaning for Gord Campbell, the acting St. Thomas mayor and a retired Ford worker who spent 30 years at the plant.
“I will sure as heck be there, I can you tell that,” he said of any deal announcement.
“What I would look for from this is jobs, jobs, jobs — and this whole area needs it. Employment here is grim. The food-processing industry is growing and 1,500 jobs in this economy is great news.”
St. Thomas is part of the London metro area, now running the nation’s highest big-city jobless rate at 9.9%
Macartney pointed to Labatt, Casco, Nielsen, Cargill, (which bought Cuddy Foods’ poultry division) and newcomers Cakerie and Dr. Oetker, as examples of the area food cluster redevelopment of the Ford site could add to.
“This could be a great example of conversion. We have this huge, dormant plant and it is a great example of making lemonade out of lemons,” he said.
There’s also real economic opportunity in the food sector, a $30-billion-a-year industry now employing 100,000, said Steve Peters, a former Ontario agriculture minister and director of the Cambridge-based Alliance of Ontario Food Processors.
“Any investment in food is positive, there is real potential for growth,” said Peters. “There is tremendous opportunity.”
Southwold Township, where the plant is located, also hopes the development is a go, to replace much-needed revenue and jobs.
The township lost 18% of its tax revenue with the Ford plant’s closing — about $300,000 a year.
Elgin County lost about $600,000 and the province about $1.2 million for the area public school board, for a total of more than $2 million in lost tax revenue a year.
No manufacturing business is slated for the area, but the proposed ownership group is open to hearing pitches from businesses on any development.
“They have envisioned a theme for the site and agriculture is a very good fit there,” said the official.
Early reports were a deal might have been done by the end of 2012, with a green energy focus, “but those plans evolved” to more of a food focus.
The reason for the delay is that Ford’s environmental quality office, independent of the automaker’s other divisions, has been poring over the site to ensure it’s “spotless” because the company doesn’t want liability, the source said.
FORD ST. THOMAS PLANT
— Opened Dec. 18, 1967
— Last car off line: Sept. 15, 2011
— Products: Various, including Crown Victoria widely used as a police cruiser
— Size: 2.2-million-sq.-ft plant.; 253 hectares
— Lost jobs: More than 1,000 workers lost their jobs.
— Asking price: $22.75 million
New uses in proposed $700-million project could include:
— Greenhouse operation: Organic foods would be grown and trucked to North American markets. Fuelled by biomass or bio-oil, would run on green energy.
— Food processing: Businesses that would sell and distribute regional foods.
— Food packaging,
— Cold storage business: Freezing foods on site.
— Logistics, trucking business.
WHAT OTHERS SAY
“It would be wonderful if they can close the deal and bring a large volume of business to the site and develop it. It would be better for all communities, not just Southwold, but London as well.”
— Suzanna Dieleman, Southwold Township treasurer
“It seems exciting. The more times we can strengthen food capabilities, the better for us. Developing food opportunities is great for London and the region.”
— Peter White, chief executive, London Economic Development Corp.