Del Monte Fresh Produce Co. will pay $6.5 million to Christina School District for a former Glasgow office building that taxpayers spent $22 million to buy and renovate for a middle school that never opened.
Florida-based Del Monte, which plans to close the deal May 20, will use the 195,000-square-foot steel-and-glass structure at Pencader Industrial Park as a distribution center. It was originally built as an office and warehouse for the solar energy company AstroPower, which went bankrupt in 2004.
Del Monte will have 30 employees this year and up to 500 by 2019, company officials told The News Journal in February. Del Monte will use the site to pack fresh-cut fruit, make sandwiches and protein salads, ripen bananas and avocados, store products, and for office space, state officials said.
The deal has been public knowledge for about two months, but Monday the Delaware Economic Development Office released details about nearly $900,000 in state incentives to Del Monte and Tuesday the district announced that it’s 12-year, money-burning saga is coming to an end.
District officials did not mention the $15.5 million loss on the property in its news release but in an interview spokeswoman Wendy Lapham acknowledged the figure was accurate. Christina can only use the $6.5 million to pay off debt on the Glasgow property and other properties. The money cannot be used for operating expenses, she said.
In 2005, at the direction of then-Superintendent Joseph Wise, the district paid $12.8 million for the three-year-old building at 300 Executive Drive — about 1½ miles from the district’s Glasgow High School. The district paid 60 percent of the cost; the state paid 40 percent.
Wise and other district leaders envisioned the building as a state-of-the-art middle school for up to 1,200 students. So, using the same 60-40 split, the district and state spent another $9 million reconfiguring the building and buying chairs, desks and other equipment.
But those plans were waylaid by a court order to reconfigure the district. That meant the district didn’t have enough students for a new middle school.
The district put the 17-acre site up for sale in 2009, with the state setting the price at $14.9 million. No state agencies, which have the first option to purchase school district properties offered sale, wanted to buy the site. Neither did New Castle County, which has the second option.
The building was offered to the public for sale in 2011. The price kept dropping and this year, Del Monte agreed to pay $6.5 million.
The state is giving Del Monte two grants from the Delaware Strategic Fund, development office spokeswoman Christina Dirksen said.
One is a performance grant of $259,000 to bring 30 jobs — nearly $10,000 per position. Del Monte can apply for additional performance money for any other new jobs it creates, Dirksen said.
The second grant is for $654,000, which would be a 3 percent match for $22 million Del Monte has pledged to invest in capital improvements, Dirksen said.
The property has been exempt from county and school district taxes but now it will be subject to both, as well as generate income and other taxes for the state.
Gov. John Carney issued a statement that welcomed Del Monte’s impending arrival but did not mention the debacle involving Christina and state taxpayer dollars.
“We’re very much looking forward to seeing the former site of AstroPower re-purposed and come alive again, bringing with it new jobs to our state.” Carney said.
Paul Rice, a Del Monte senior vice president, said the company is eager to “tap into the workforce of the most populous county in the state with close proximity to the University of Delaware.