A Fortune 100 food distribution company is relocating some of its local operations to Schertz, the city’s economic development director said this week.

Sysco Corporation, the Houston-based food service company, plans to build a 635,000 square-foot distribution center on Schwab Road off Interstate 35, consolidating its distribution operations in South and Central Texas. The new distribution center will be situated on 50 acres next to the Lack’s Furniture facility.

The company came one step closer to moving to Schertz after the Schertz Economic Development Corp. board and the Schertz City Council last week approved a development agreement with Sysco, in which the city agreed to spend $1.5 million in infrastructure improvements to assist the company in building its new distribution center. The infrastructure improvements include a water line, sewer line and two roads.

Since the new distribution center will be located in Comal County, within the Schertz city limits, Comal County Commissioners Court last week agreed to a tax abatement deal with the corporation, in which 54 percent of its county taxes on the property will be diverted during an eight-year period.

George Antuna, SEDC executive director, said the new distribution center, expected to be completed by the end of 2011, will employ 600 people, all full-time employees.

“This is a win-win-win situation for Schertz, Comal County and our region,” Antuna said.

Once the new distribution center is completed, Sysco will close its two distribution facilities in San Antonio and Round Rock, and relocate those operations to Schertz. The San Antonio and Round Rock distribution centers each employ 300 people.

Antuna said the 300 jobs currently at the San Antonio distribution center will stay in the area once they move to the new Schertz facility.

In a written statement, Mark Palmer, Sysco’s vice president of corporate communications, said the company had outgrown its San Antonio and Round Rock distribution locations and was looking for an expansion site. Palmer said it will take about 18 months to build the new Schertz distribution center and that the San Antonio and Round Rock sites would continue to operate until the new Schertz site is completed.

Antuna said the city will see a payback of $1.5 million in the infrastructure improvements in 14 months and benefits of nearly $13 million over 10 years. He said the new facility will provide a big tax base for Schertz.

“You will have a huge tax base,” he said. “This project is going to be equivalent to over 200 residences. It is almost like putting in a big subdivision. (Sysco) is going to be able to generate revenue basically the first year they are there.”

Antuna said he and SEDC staff had worked for the past 13 months to bring Sysco, which was dubbed as Project Mustang, to Schertz. An inquiry on a property site was made at the EDC office last year, but Sysco did not reveal its true identity until a couple of weeks ago.

Sysco looked at sites up and down the I-35 corridor before settling on Schertz because of the city’s location, which would allow the company to better serve its customers from Austin to the Rio Grande Valley, Antuna said.

“At the end of the day, it was (about) location, location and location,” he said.

Sysco is one of the largest food distribution companies in North America with 50,000 employees and sales of $37 billion in fiscal year 2008.

San Antonio, February 8, 2010 – San Antonio-based real estate developer SPV Ventures, LLC, announced today that it has closed its $2.5 Million construction loan with Schertz Bank & Trust in Schertz, Texas. The proceeds of the loan will allow SPV to immediately commence construction on the first phase of its planned approximately 56,000 square foot medical/professional office complex known as Schertz Parkway Professional Plaza located at 5000 Schertz Parkway and IH-35. This first phase, comprised of 18,000 SF in two adjacent buildings, will house medical offices, including the recently announced Schertz location of Northeast OB/GYN Associates of San Antonio. SPV is currently in negotiations with 4 other tenants for an additional total of 8,000 to 16,000 SF total, which will, at a minimum, fill the first phase and necessitate commencement of design and approval of Phase 2.

Jesse Hellums, President o f SPV Ventures and a resident of Schertz, said “We are extremely pleased to be part of this team of local participants, which of course includes Schertz Bank & Trust and the City, and to launch a project which will serve the residents of the Schertz/Cibolo/Selma area. This demonstrates that a local bank, local City managers, local business tenants, and a local developer can work together to create a much-needed project for citizens, even in these sometimes difficult business climates; localism in no longer limited to farmers’ markets.”

According to Mr. Hellums, The City of Schertz Economic Development Corp. was integral to SPV Ventures’ efforts to secure this construction financing with Schertz Bank & Trust for Phase 1, as well as SPV’s efforts to sign the lease with Northeast OB/GYN. Schertz EDC has participated in the financing package as well. Steve White, President of Schertz EDC, said “The closing of this construction loan is another indication of our commitment at The City of Schertz to provide quality services to our residents. Furthermore, this financing shows how a team of local businesses can partner together and create a project well suited, and needed, by the citizens in this area.”

Roy Richard, Chairman of Schertz Bank & Trust, added further, “Schertz Bank & Trust has been serving customers in the Schertz/Cibolo/Selma area since 1913, and we remain committed to working with local businesses and the City to serve the financial needs of Guadalupe County well into the future. Schertz Parkway Professional Plaza, once completed, will be a welcome addition to our area, and we are excited to be a part of it.”

SPV Ventures, LLC, is a privately owned limited liability company based in San Antonio and has its main offices at 16161 College Oak, S. 100, San Antonio, 78249. Contact Carey G. Birmingham, managing director, for more information at 210-262-8490 or coinvestments@satx.rr.com.