Plans for CFM warehouse back on track

Spring may finally bring a new warehouse facility for CFM Food Distributors Inc. in the Jefferson County Corporate Park.

The food distribution company reached a legal settlement with its original contractor on the project, who had liens on the property. A grant and loan package with the Jefferson County Industrial Development Agency should close by Monday.

The package and sale of land in the corporate park were approved Thursday morning by JCIDA's board.

CFM told JCIDA's loan review committee that it will downsize the project from about 80,000 square feet to about 50,000 square feet. That would reduce the cost from about $10 million to $6 million.

"It's a better approach and there will be lots of opportunity to expand further," JCIDA Chief Executive Officer Donald C. Alexander said.

The package includes a $375,000 loan and $200,000 grant approved in April, plus an additional $110,000 grant that will convert to a loan if employment falls below 150 people. The food distributor has more than 80 employees, a number which could nearly double in the new facility.

Similar grant packages were approved in 2006 and 2007, as well as in April and November.

JCIDA will sell the 16.13 acres to the company for $282,000.

In asking for the latest package approval, CFM officials showed that the project would improve efficiency for the company and that the company has a working relationship with developer Lunco Corp., West Carthage.

"We should've been where we are now three years ago," CFM Vice President Peter J. Levos said.

The Watertown-based company was founded in 1924 and is in the third generation of family owners. CFM, formerly known as California Fruit Markets Inc., has more than 2,000 customers in 19 states and Puerto Rico, according to company literature.

In November 2007, Whiting-Turner Contracting Co., Baltimore, Md., filed suit against CFM and Mr. Levos. The lawsuit, for $2.6 million, alleged the company stopped a proposed expansion project after work already had started at Little Trees Drive. The contractor also placed liens on the property, which still was owned by JCIDA.

"We've got the settlement signed and in place for a few months," Mr. Levos said. "It's far less than the original dispute."

As part of the settlement, the grant package must close by Monday.

"The guys have been so busy with the day-to-day operation that they didn't have much time to devote to the project," Lunco owner Michael E. Lundy said. "Part of our agreement going forward is that I will actually be helping them develop their business plan and working with their accountant."

Mr. Lundy also is helping CFM secure commercial lending for the project.

In other business, JCIDA approved a microenterprise loan for Allen M. Gonya. He and his wife will start The Korean Grill out of their house at 525 W. Main St. They will offer Korean barbecue takeout and delivery.

"The taste is different from other Asian food," Mr. Gonya told the agency's loan review committee. "It's not as sweet. It's a more marinated style."

JCIDA's loan totals $15,000 of the $29,250 project and will last five years with 4 percent interest.