Monday, June 14, 2021

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It’s official: Gov. confirms that Chick-fil-A will build distribution center in Mebane

Gov. Roy Cooper has announced Tuesday that Chick-fil-A has selected Mebane for the location of a major distribution center, one estimated to represent a $52 million investment by the company and add 160 jobs.

The company plans to build a distribution center with 182,625 square feet of floor space and employ at least 160 people ranging from warehouse workers and truck drivers to administrative staff. The company expects the average salary of these employees to be slightly in excess of $63,000. [The state announcement put the average salaries at a slightly lower level, $62,429, than the one the company presented to Alamance County’s commissioners and to Mebane’s city council.] In either case, however, the expected salaries will be well above the average Alamance County wage of $41,611.

“North Carolina attracts the nation’s most well-known brands because of our strong workforce and steady leadership, even in a crisis,” said Gov. Cooper. “Alamance County is the right location with the right infrastructure to make Chick-Fil-A’s new approach to the restaurant’s supply chain a success.”

“Alamance County is the right location with the right infrastructure to make

Chick-Fil-A’s new approach to the restaurant’s supply chain a success.”

– N.C. Gov. Roy Cooper

Alamance County commissioners agreed last month to pay out $390,000 in five annual installments of $78,000 apiece. These grants are comparable to a series of payments that Mebane’s city council also authorized in November, although the council has also agreed to sweeten the pot by waiving another $150,000 or so in planning and inspection fees, for a total, cumulative local incentives package of $930,000.

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The state added its incentives grant for the Chick-fil-A project earlier today, prior to the governor’s announcement. Over the course of the 12-year term of a Job Development Investment Grant (JDIG), the project is estimated to grow the state’s economy by nearly $389 million. Using a formula that takes into account the new tax revenues generated by the new jobs, the JDIG agreement authorizes the potential reimbursement to the company of up to $1,562,400, spread over 12 years.

State payments only occur following performance verification by the departments of Commerce and Revenue that the company has met its incremental job creation and investment targets. JDIG projects result in positive net tax revenue to the state treasury, even after taking into consideration the grant’s reimbursement payments to a given company, according to the state commerce department.

Chick-fil-A Supply’s JDIG agreement also could move as much as $173,600 into the state’s Industrial Development Fund – Utility Account for use by rural communities elsewhere in the state, according to the state commerce department. The Utility Account helps finance necessary infrastructure upgrades in more economically challenged areas of the state to attract future business to those locations.

 

Background on Chick-fil-A’s need for additional distribution capacity

David Fader, the senior director for corporate financial services at Chick-fil-A, told the commissioners last month that, with some 2,600 locations in 47 states, Chick-fil-A is in desperate need of a new distribution center to augment one that it recently set up in its home state of Georgia.

Fader noted that the chain has traditionally relied on third party distribution centers, but has increasingly found it necessary to set up its own warehouses due to its runaway growth.

“We are the fastest growing chicken restaurant at the moment,” he told the commissioners. “That’s putting constraints on our distribution network.”

The distribution center that Chick-fil-A has on the drawing board in Mebane would occupy roughly 78 acres within the North Carolina Industrial Center, a corporate park that the Samet Corporation of Greensboro has been developing off of Third Street.

Story continues below map.

This is the location, 78.85 acres at the end of Park Center Drive in the North Carolina Industrial Center off South Third Street in Mebane. The location is at the end (a cul-de-sac) of the current Park Center Drive, near the Ford distribution center on one side and the Universal Preserv-A-Chem building (formerly a Southern Season distribution center) on the other.

Under an incentives agreement with Alamance County, Chick-fil-A’s warehouse must have an assessed tax value of at least $52 million – $22 million of which would derive from equipment and other movable property.

In a brief interview in November after appearing before the county’s commissioners, Fader told The Alamance News that his company has also been eyeing some out-of-state sites for its new distribution center – including one potential location in Ohio.

Company representatives told Mebane’s city council last month that they hope to break ground on the new facility during the first quarter of 2021 and be operational a year or so later — in the first or second quarter of 2022.

Story continues below photo.

Chick-fil-A Supply Distribution Center in Cartersville, Georgia.

Chick-fil-A’s optimism about growth

“Building Chick-fil-A Supply’s next distribution center in North Carolina allows us to support the incredible growth of the area,” said Josh Grote, senior director, Chick-fil-A Supply, when the announcement was made today. “Specifically, Mebane provides great access to talent and is in close proximity to major transit routes, enabling us to best serve our customers: Chick-fil-A franchised operators, licensees, and their teams.”

In 2019, the company launched a new approach to distribute ingredients and products to its restaurants, creating Chick-fil-A Supply, LLC, its own distribution company. The Mebane distribution center will be the company’s second.

“North Carolina offers the top business climate in the United States,” said North Carolina Commerce Secretary Anthony M. Copeland. “Chick-fil-A Supply’s decision to locate this important new operations center in our state demonstrates that corporations recognize the many advantages of doing business here.”

The chain, founded in 1967, is known for its original chicken sandwich and serves customers freshly prepared food in more than 2,600 restaurants in 47 states, Washington, D.C. and Canada.

While enjoying strong continuing growth, the company has also faced an increasingly complex logistics challenge to keep up with demand. In 2019, the company launched a new approach to distribute ingredients and products to its restaurants, creating Chick-fil-A Supply, LLC, its own distribution company.

A wholly owned subsidiary of Chick-fil-A, Inc., Chick-fil-A Supply helps address Chick-fil-A restaurants’ unique needs, such as frequent, high-volume deliveries in challenging delivery environments. The company’s facility in Mebane will be its second permanent, full-scale distribution center, joining the first full-scale facility near the company’s headquarters in Georgia.

 

 

 

 

 

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