PJ Foods, a subsidiary of Papa John’s Pizza, will shut down its plant in the Rotterdam Corporate Park in October, possibly laying off up to 50 workers employed at the facility.
Tish Muldoon, a spokeswoman with the Kentucky-based chain restaurant, said the logistics of moving goods out of the former state bakery and warehouse didn’t make sense because there are only a few Papa John’s locations nearby. She said the company will move the operation to an area in New Jersey, about 35 miles outside of Manhattan.
“We decided it would be in the best interest of our operations to close the facility,” she said Friday. “[The Rotterdam plant] is pretty far away from where our restaurants are.”
There are only three Papa John’s restaurants within a 50-mile radius of the Rotterdam plant. In contrast, there are more than 20 scattered within a 10-mile radius in the New York-New Jersey metropolitan region.
The chain has an agreement with the Albany-based KNC Holdings Inc. that will result in 12 new stores opening, but neither company has disclosed exactly where these restaurants will be located. Schenectady Metroplex Authority Chairman Ray Gillen said the announcement of the expansion gave initial hope the company would stay, but the number of stores apparently wasn’t enough to justify the expenses the company faced in its distribution model.
“They never had the market penetration they envisioned at one time,” he said.
Gillen said the company’s pending departure from the former state bakery was one of the reasons Metroplex moved swiftly to acquire the property. Last week, Metroplex purchased the 260,000-square-foot complex from the state Dormitory Authority for $1 million.
Metroplex will own the buildings for three years and then move to sell them to recoup the $1 million investment. Without the deal in place, Gillen said the space occupied by PJ Foods would have likely remained vacant because the Dormitory Authority prohibited Metroplex from marketing either of the buildings.
“Unless we had ownership, that facility would stay empty and that’s unacceptable,” he said.
PJ Foods occupies 44,600 square feet in Building 14 of the park. The company invested more than $2 million into modernizing the space, which was used to produce dough balls for pizza and for shipping pizza toppings.
Papa John’s came to Rotterdam in 1997, promising to bring more than 150 jobs with it. At the time, the move was seen as a coup for the Pataki administration, which was facing criticism for dismantling the state’s 200-worker Division of Supply Support in 1995.
“When we announced plans to privatize the state bakery, I promised to seek out private-sector tenants for the bakery complex,’’ Gov. George Pataki said during the company’s announcement. “Today, we make good on that promise by bringing 150 new private sector jobs to the Capitol Region, with potential for additional jobs in the near future.’’
Papa John’s had initially planned to use the facility to supply its expansion into New York. But the chain never took hold in the Capital Region, and a half-dozen of the restaurants here closed abruptly in 2002.
Gillen said the company’s departure will leave Metroplex with a state-of-the-art food facility to market. He said major freezing and cooling units, in addition to cold storage, should attract a new tenant in short order.
“It’s a very marketable space,” he said. “And we’ll have some time before they leave.”