Houston-based Sysco Corp., a global leader in the sale, marketing and distribution of food products, has closed on the purchase of 50 acres of land in the city of Schertz for a new distribution facility.

Plans call for a complex of 635,000 square feet along Interstate Highway 35 and Schwab Road, in this city just northeast of San Antonio. Schertz is part of the San Antonio MSA.

The facility is slated to be up and running by mid-2010, confirms Mark Palmer, vice president of corporate communications for Sysco.

Once construction is completed, Sysco will close two existing distribution centers — one in San Antonio, one in Round Rock — and consolidate those functions into the new center in Schertz, Palmer says.

Kit Corbin, of the local Grubb & Ellis Co. office, represented the seller.

The existing centers employ some 300 people each. The San Antonio facility is located at 5711 Seguin St., on the city’s East Side. The Round Rock distribution center is at 101 Chisholm Trail Road. The city is located 15 miles north of Austin, and 85 miles northeast of San Antonio.

The current plan calls for the lion’s share of the employees at the to-be-shuttered distribution centers to make the move to the new Schertz facility — thus creating an immediate job hub of roughly 600 people in the city, notes George Antuna, executive director of the Schertz Economic Development Corp.

As part of an incentive plan to land the Sysco distribution center, Schertz has committed to invest $1.4 million in public infrastructure improvements. Antuna adds that these infrastructure upgrades will not only benefit Sysco, but future businesses that will make their way to the I-35/Schwab area as well.

Meanwhile, Comal County Commissioners approved a tax abatement program for the Sysco project. The deal calls for the abatement of a portion of the property taxes that would be paid by Sysco on the improved property for up to eight years, according to County Judge Danny Scheel. Annually, on average, over that eight-year period, about 53 percent of the money that Sysco would have paid in property taxes will be diverted toward additional capital investments.

The package that Schertz and Comal County was able to bring to the table made the move to Schertz “a fairly easy decision for us,” adds Palmer.

“This is a tremendous asset for Comal County,” he says. “We live in the hot spot of Texas right now.”

Customer focus

As of the end of Sysco’s 2009 fiscal year (June 27, 2009), the company had sales of more than $36 billion. Currently, Sysco has 186 distribution facilities serving roughly 400,000 customers, which include restaurants, health care facilities and school districts.

The new Schertz facility will enable the food-service firm to better serve its customers in Central and South Texas — all the way down to the Rio Grande Valley, says Palmer.

The existing San Antonio and Round Rock centers have the ability to hold anywhere from 8,000 to 9,000 of the products that Sysco delivers to its customers.

The Schertz facility, however, would allow Sysco to warehouse up to 14,000 items under one roof, he adds.

That diversity is crucial, given the palette of restaurants that make up the San Antonio/Austin/Round Rock corridor.

“Between San Antonio and Austin, you have some of the most innovative, highly respected culinary communities in the country,” observes Palmer.

This diversity, he adds, has been a key impetus in the growth of Sysco’s Central/South Texas operations — and thus the need to create a new distribution center that can meet the growing requirements of its customers.

Palmer also points out that as San Antonio and Austin continue to merge into one larger metroplex, having one large distribution center that can cover the region is certainly more cost effective.

“This is really a regional growth opportunity that we’re seeing,” he adds. “We can’t wait to build a highly efficient, totally high-tech facility to meet that growth.”

Regional windfall

The new Sysco distribution center will be located just in front of a Lacks Distribution Center that opened for business in Schertz about two years ago, Antuna says. The Lacks center currently boasts about 300 employees.

So between the Sysco and Lacks facilities, that adds up to more than 800 people who will not only be working, but shopping in Schertz and the surrounding towns in Comal County, Antuna and Scheel say.

“This whole area is really going to boom now,” says Antuna, adding that these employment hubs will pave the way for other developments — including retail projects that will cater to these employees.

But both Scheel and Antuna also stress that it is not only Schertz and Comal County that are the winners in the Sysco deal. Other cities in the San Antonio MSA — including San Antonio itself — are also in a position to benefit from Sysco’s investment.

The two liken the Sysco deal to other recent successes for the area — including attracting the Caterpillar plant in Seguin and the Toyota Tundra facility in San Antonio.

“This is true regional economic development coming to fruition,” Antuna says. “It’s a domino effect.”

It is a relationship that also requires cities in the region to work together to not only bring in new businesses, but retain the ones that are already here, says Antuna.

“What happens in one city affects all of us,” he adds.