(UPDATED COVERAGE, 6:45 p.m.) San Francisco Mayor Edwin Lee is supporting a new 60-year lease for the city’s Wholesale Produce Market, which would enable the market to pursue $100 million worth of expansion and renovations over the next decade.
The lease proposal is expected to be submitted to the city’s board of supervisors May 15. Lee and board member Malia Cohen announced the plan May 14 at the market.
“A new 60-year ground lease gives us the foundation to go out and make the expansion and improvements,” said Michael Janis, general manager of the San Francisco Wholesale Produce Market. “We’ll be financing it from a number of different sources.”
The first order of business is construction of an 80,000 square-foot building, expected to break ground in 2013 and take about nine months to complete.
“This will be a significant phased approach,” Janis said. “We’ll do that first, then over time we’ll make improvements to existing buildings or replace some with new construction.”
Long-term, the plan is to expand the market from about 300,000 to 500,000 square feet and bump sales from $475 million to $735 million, according to a city estimate. Full-time employees are expected to rise from 650 to 1,000.
The reinvestment initiative has been dubbed Growing Our Legacy.
“We’ve been working with the city for well over three years laying out a vision for the market and a lease is part of that,” Janis said. “The city has been supportive of job creation at our market. It recognizes that we play an instrumental role here. The food economy in San Francisco has a lot to do with its tourist economy. Food is an incredibly important part of what draws people to San Francisco.”
The market has been in the city’s Bayview Hunters Point section since 1963. Its 50-year lease is due to expire in 2013.
Distributor GreenLeaf, the market’s largest tenant with 12 stalls, needs more space, said Andy Powning, produce specialist.
“We’re bursting at the seams,” Powning said. “It means most importantly that GreenLeaf will be able to remain at the market and in San Francisco, which we want to do.”
GreenLeaf has more than 150 employees and runs about 36 trucks daily, mostly to foodservice clients. The company implemented its first HACCP food safety program about eight years ago; maintaining it would be easier in an upgraded facility, Powning said.
“To bring a semi-open, 50-year-old warehouse into compliance with a modern-day HACCP program is very challenging,” he said. “It’s a lot easier to maintain a food safety program and keep the chill chain intact in a new building. You’ll have refrigerated docks instead of taking product out of the cooler into the building’s open space where it may sit while orders are being filled. We had hoped it would not come to the point where we had to look at alternatives. We’re very happy for what Mayor Lee announced.”
Earl Herrick, owner of Earl’s Organic Produce, also welcomed the plan.
“It secures for this city the opportunity to get fresh produce through a sophisticated yet simple system of distribution,” he said. “Everyone who lives here enjoys all the farmers markets, but that’s only the tip of the iceberg when you talk about food culture. The backbone is the produce market. It locks that in for another 60 years.”
Beyond California, Earl’s Organic Produce – whose products include organic heirloom tomatoes, peaches and satsuma mandarins – distributes nationwide in such markets as Atlanta, Chicago and New England.
The market, a city-controlled entity, has been operated jointly by the San Francisco Market Corporation and San Francisco Produce Association.
“The San Francisco Wholesale Produce Market has been supplying our city and region with fresh, healthy produce for 137 years,” Lee said in a news release. “This new $100 million investment and expansion will ensure that small businesses, neighborhood grocers and anyone in the market for fresh produce for their business will continue to receive their goods from San Francisco.”
Lee visited GreenLeaf May 14 to make the announcement.