More good things out of Philly

Jeff Schlegel has an article in The New York Times about a local success story:

Tastykake butterscotch Krimpets, fruit pies, and other baked goods are as much a part of this city’s culinary tradition as cheese steaks and soft pretzels. So when the company that makes them, Tasty Baking, outgrew its long-existing plant in north Philadelphia several years ago, there was little question that a new bakery would be inside the city limits.
Tasty Baking joined with economic development officials, the city, and the governor to relocate to a neglected corner of the redeveloping Philadelphia Navy Yard, and in May of 2010 opened a 345,000-square-foot bakery, packaging, and distribution center. The company calls the plant the largest “green” bakery in the world, because of its efficient water and energy systems, its use of recycled building materials, and other environmentally friendly attributes.
For the company, whose regional distribution ranges from Ohio to Connecticut to Florida, the move was about increasing both efficiency and production. “You drive efficiency and then reinvest it into the brand,” said Tasty Baking’s president and chief executive, Charles P. Pizzi. He added that along with another plant in southeastern Pennsylvania, “We’ll have the capacity to go beyond our current distribution.”
The roughly 1,200-acre Navy Yard took shape in the 1870s at the confluence of the Delaware River and the Schuylkill in south Philadelphia. Its zenith came in World War Two, when more than 40,000 people built ships there. When the Cold War ended and the military downsized operations, the site was shut down in the mid-1990s as part of a wave of base closings.
But the tract has been transformed in subsequent years, and today it is a bustling, mixed-use economic zone with tenants that include old-school industrial plants, a research center, ship building and repair operations and corporate headquarters like those of Urban Outfitters.
Tastykake’s new plant occupies 25 acres of a fifty-acre parcel on the west end of the yard. That area, also referred to as 'the back end', was once so off the beaten path— both physically and conceptually— that it was not included in a development plan prepared by the Philadelphia Industrial Development Corporation, the city’s nonprofit economic development arm that took over the site in 2000.
One recent day on the steps leading up to the visitor’s mezzanine overlooking Tastykake’s production floor, Mr. Pizzi pointed to a large mural of the former plant, a 550,000-square-foot, six-floor building constructed in 1922. “That’s a pretty old building to run a business out of,” he said. “Our challenge was moving out of that facility and into this one, which I equate with going from a Ford pickup truck into a Maserati.”
Tastykake’s former plant had grown inefficient, Mr. Pizzi said, and was limiting the company’s ability to grow. The new plant occupies one giant floor where the product lines run in a continuous flow from raw goods to packaging, enabling the company to increase or decrease production more easily.
From the mezzanine, which eventually will host public tours, Mr. Pizzi surveyed the seven production lines where battleship-gray machinery cranks out some four million food items a day. A seemingly endless march of bakery products rolled out of ovens and were injected with jelly, smeared with peanut butter and lathered in chocolate icing before heading toward other machines that wrapped them, boxed them and loaded them onto skids to be carted off to the warehouse.
“You can imagine how much more efficient this is than a six-story building,” Mr. Pizzi said. Mr. Pizzi, who became Tastykake’s chief executive in late 2002, said he realized early on that the company needed a new plant. He reached out to the development corporation, the city, and Governor Edward Rendell of Pennsylvania to see what kind of deal they could work out to build a modern plant that would keep several hundred manufacturing jobs in the city.
Tastykake chose the Navy Yard and selected Liberty Property Trust of Malvern, Pennsylvania to build the plant. Liberty and a minority partner, Synterra Partners of Philadelphia, are developing a 70-acre section of the yard called the Navy Yard Corporate Center. Tastykake moved its corporate headquarters there in 2009, and is the anchor tenant of a four-story, 95,000-square-foot building that bears its name.
Liberty and Synterra built the plant for $50 million, and Tastykake is leasing the building. To pay for $78 million in equipment, Tastykake received $31 million in public financing in the form of loans from the development corporation, the city and the state. A group of four banks, led by Citizens Bank, picked up the balance. A group of local, state and federal infrastructure funds provided roughly $20 million for new roads and infrastructure on the Navy Yard’s west end, which should bring even more development. Liberty plans to develop a 200,000-square-foot industrial building near the Tastykake plant, said John Grady, executive vice president of the Philadelphia Industrial Development Corporation.
But all is not sunshine and cupcakes for Tastykake’s new plant, where production problems prevented the company from filling some $1.3 million in orders in the second quarter. “Getting all of the new equipment in rhythm is going to take time,” Mr. Pizzi said.
That said, initial returns on the plant, at least from the industrial development corporation’s perspective, are positive. “By far, the back end where Tastykake is has gone through the greatest transformation at the Navy Yard,” said Mark Seltzer, the corporation’s director of leasing and development.