Plant plan springs leak
By Ellen G. Lahr, Berkshire Eagle Staff
Saturday, December 15
PITTSFIELD Ice River Springs, the Canadian spring water bottling company that paid $4.1 million last January for the former KB Toy warehouse on West Housatonic Street, is on the brink of abandoning its Berkshire expansion, citing prohibitive power costs.
The company was expected to begin production and distribution in September, with about 25 new jobs. Now, a "For Sale" sign now stands outside the 250,000-square-foot plant, which has not turned out a drop of water.
Ice River's chief financial officer, Michael Howe, said yesterday the company was stunned to learn that power prices quoted last December by Western Massachusetts Electric Co. did not reflect the 40 to 50 percent increases that hit the warehouse this year.
"We got sideswiped by costs that were nowhere what we were quoted," Howe said in a telephone interview from Ontario. "We'd like to make it work, it's a good location for us."
Efforts to reach WMECO officials yesterday were unsuccessful.
City officials who were involved last year in discussions over Ice River's energy costs were not available for comment.
Howe said it should have been incumbent on WMECO to alert the
company of pending rate hikes.
"It was a contentious issue in a meeting we had," he said.
Howe deferred specific financial questions to the company's president, Sandy Gott, but she could not be reached yesterday for comment.
In November, the warehouse property was placed on the market for $5.45 million, but Howe said city and business leaders are urging the company to find energy conservation measures that would help control costs. Already the company has explored installing a wind turbine, but the location is prohibitive, said Howe.
Solar panels are another option, as is joining up with the new energy collaborative being formed by the Berkshire Chamber of Commerce.
WMECO's commercial and industrial electric rates have been choking the bottom lines of energy-intensive businesses in the Berkshires this year, and the company's rate hikes are now under scrutiny by Attorney General Martha Coakley.
Meanwhile, WMECO's cyclical request for another rate adjustment is pending; any increase, if allowed, would go into effect in January.
Howe said Ice River invested millions of dollars to set up automated bottling and distribution systems at the plant, but has never begun production.
Howe said he's aware that Ice River Springs is not alone in its troubles; however, the company is in quite a different predicament than others.
The company made its $4.1 million purchase in January, based on a variety of business assumptions, and since power costs were so far off the mark, the company is holding an idle, unproductive building.
Howe said there's been little action on the marketing effort for the building, though the Hartford, Conn., real estate broker handling the property said there has indeed been interest.
Mark Duclos, the real estate broker, said the property is available for either sale or lease, with a lease cost of $3.50 per square foot.
He said the market for industrial and warehouse property is rather strong in the Northeast, particularly in the 100,000- to 300,000-square-foot size range.
"A good many that we've had are sold or leased," he said.
Howe said Ice River Springs has no complaints with the Pittsfield officials, who have been supportive and encouraging of the company's expansion here. What's disheartening, he said, was WMECO's rate hike, which was not properly disclosed.
"It was not much of a way to be introduced to the community," he said.
Ice River selected the Pittsfield location in order to be closer to its customers, who had been receiving the company's spring water through shipments from Ontario. The Pittsfield warehouse would ship out about 25 truckloads of water bottles per day.
The company's customers are grocers and convenience stores that place their own labels on Ice River's spring water.
To reach Ellen G. Lahr: firstname.lastname@example.org, (413) 496-6240.