The heat is on: Bakery revival uncertain

| Tuesday, May 11, 2004

Equipment inside the former Nabisco bakery in East Liberty is sparkling clean and could begin turning out crackers again at the flick of a switch. But reopening as a bakery is far from a certainty as a Friday deadline nears for proposals at the local development agency that owns the building.

The Regional Industrial Development Corp. has received numerous inquiries regarding the building's reuse, including as warehouse space and for conversion into apartments or condominiums. The massive, seven-story building also could be divided into a mix of uses.

RIDC President Robert Stephenson said he is anxious for the building to be occupied, saying it has been a severe financial drag since the previous tenant, Oakbrook Terrace, Ill.-based Bake-Line Group, filed for Chapter 7 liquidation in January and shut down all seven of its plants.

The hometown favorite seems to be Rod Willcox's proposal for reopening the building as a bakery, as he did five years ago after Nabisco had itself shut the plant down.

But he first must outduel other private-label cracker makers like St. Louis-based Ralcorp Holdings Inc. that he said are trying to use bankrutpcy proceedings in Delaware to acquire and remove baking equipment from the plant in order to increase production volume at existing plants.

Willcox said progress is being made in four crucial areas that could lead to a June reopening: refinancing of the plant's equipment, assembling a group of investors, reaching a labor deal and preparing a business plan and financing proposal to submit to the bakery's landlord, RIDC.

Willcox, who spearheaded the effort to reopen the plant as Atlantic Baking in 1999, said tentative agreements are in place with GE Capital Corp. to refinance the equipment inside the building.

"GE Capital has been very helpful and wants to see this happen," he said.

A Ralcorp spokesman declined comment. GE Capital could not be reached for comment.

Willcox said a contract agreement is imminent with Operating Engineers Local 95, which previously served some Atlantic Baking Employees. Local 12 of the Tobacco, Confectionery and Bakery Workers union has been consolidated into a Cleveland unit, meaning former members of the Pittsburgh local would have to join the Operating Engineers.

Local 95 Business Manager William Cagney could not be reached for comment Monday.

"We will have something on the table," Willcox said of the RIDC deadline. "I'm the only game in town that will bring 300 good-paying jobs and pay off the debt on the building."

RIDC acquired the building as part of a complex $10 million deal to rescue the bakery in 1999. Willcox has meetings this week in Pittsburgh with his investors from the United Kingdom and Ireland while he puts the finishing touches on the business plan, after initially having difficulty obtaining financial information from the Delaware court. He reiterated his plan to have the bakery operating by June, just ahead of the busy cracker-baking season.

Willcox, the former Nabisco and Keebler executive, returns to Pittsburgh from Portland, Ore., where he has been in semi-retirement. He was pushed out of Atlantic Baking after an investment fund backed by billionaire George Soros installed a new management team from a former Keebler subsidiary. This group acquired additional plants and moved the renamed Bake-Line Group to suburban Chicago. The company expanded revenue, but failed to make a profit and ran out of cash in January. It filed for liquidation after failing to receive a life line from the Soros fund.

"The plant has been beautifully cleaned; the equipment has been debugged and the employees are trained," Willcox said. "We will be the lowest-cost producer in the industry."

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