Gateway at Whiteland, shown in 2023, is located at Graham and Whiteland roads and was developed by Westfield-based Patch Development. Daily Journal file photo
A packaging and distribution company plans to invest approximately $40 million in Whiteland.
The Whiteland Town Council granted a five-year personal property tax abatement to Sugar Foods LLC on Wednesday. The company plans to establish a food manufacturing and distribution facility in the first building in the Gateway at Whiteland building at 822 Gateway Drive in Whiteland.
The company is expected to invest approximately $25 million in logistics and distribution machinery and equipment and $500,000 in information technology equipment installed on the real estate, while providing $15 million in tenant improvements. The tax break would only be for $25 million of the investment.
The new distribution center would employ 105 full-time production and warehouse positions with an estimated average salary of $63,000. The direct impact of the new positions would be $8.2 million, including benefits, according to town documents. Additionally, Sugar Foods would donate $10,000 to the fire department each year of the abatement.
On Wednesday, council president Richard Hill asked whether the company would consider making a similar donation to the police department. He said the two public safety departments often work together for the town.
Mike Harrison, chief operating officer of Sugar Foods, offered to pay a one-time $10,000 donation for the police department, but explained that the fire department donation recognizes the development’s impact on the fire department.
Sugar Foods was founded in 1948 as a bulk sugar distributor in New York. Now, the company processes and packages salad toppings like croutons, fried vegetables, fruits and nuts, sugar packets, lime juice, tortilla strips, syrups and sauces, and more, Harrison previously said. The company has locations throughout the United States and in Mexico.
Specifically, Sugar Foods intends to process crispy vegetables at the Whiteland facility, Harrison previously said. In the future, the company wants to add more production lines and do more distribution, he said Wednesday.
A similar project was proposed in Hancock County, but the tax abatement resolution was pulled from the agenda prior to a vote at the council. At the time, Harrison told Hancock County officials the facility would possibly relocate there from Mexico.
The Daily Journal reached out to Sugar Foods in October to ask whether Whiteland and Hancock County were competing for the same project, but the company declined to comment at the time.
When Sugar Foods approached Whiteland in October, the company originally asked the council for a seven-year abatement. The request would’ve been the largest personal property tax abatement the town has ever approved, according to town officials.
Since only Goedeker and council members Tim Brown and Joe Sayler were present for the October meeting, they continued the request to the November meeting so more of the council could weigh in.
In the meantime, Sugar Foods re-evaluated its request and reduced the proposed tax abatement length at Wednesday’s meeting.
“I appreciate you all coming back and not putting us in an uncomfortable position with an out-of-the-norm ask,” Goedeker said on Wednesday.
Council vice president Deb Hendrickson appreciated Sugar Foods for considering Whiteland as a place to open a new location. Other council members thought the company would positively benefit the town.
“Based off the analysis that Adam [Stone] did for us, it scored very, very highly …,” Sayler said. “The building with this particular occupant is vastly, vastly more than that building sitting empty and also significantly more than if that building was leased or bought by a straight logistics or distribution operation.”
Hill asked whether the location could handle increased road traffic since Sugar Foods intends to become a distribution hub in the future. The project agreement includes roadway improvements, said Carmen Young, town manager.
Young explained that tax abatements allow town officials to control what type of business goes into the building.
“In one of the buildings out there, we didn’t give any sort of personal property abatement, and they did bring 1,500 employees, so they brought what we necessarily didn’t want …” Young said. “The folks that kind of go out of their way, yes, to ask for something … also, that allows us, this body, to control what type of business comes to town and wants to be a partner.”
Over 10 years, Sugar Foods will still pay $1.2 million in taxes while abating $711,302 in taxes. Without the tax abatement, the company would’ve paid $1.9 million in taxes over 10 years, according to town documents.
Although town officials considered a process that enables them to capture personal property taxes since the development would be in the Patch Phase One Allocation Area, the multi-step process to do that didn’t seem feasible and practical for this situation, said Stephen Watson, the council’s attorney.
The tax break would be in addition to a 10-year real property abatement given in 2022 for the first building of the mixed-use development by Westfield-based Patch Development.
Gateway at Whiteland’s first phase includes a 617,316-square-foot light industrial building at the back of the property, which Sugar Foods intends to outfit with this abatement. Plans for the entire 159-acre Gateway at Whiteland development include apartments, restaurant and retail spaces, and commercial flex-space buildings.
Patch officials told the town they would invest over $34 million into the land and improvements for the shell building. The tax abatement saves Patch $3.5 million in taxes, with the company still paying $3.65 million in real property taxes to the town.
Sugar Foods expects to start work outfitting the building around Dec. 1. The company plans to start warehousing and distribution operations in the fourth quarter of 2025 and first quarter of 2026, with manufacturing operations anticipated to start in late 2026, according to town documents.
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