NORTHAMPTON — The Coca-Cola hot-fill facility on Industrial Drive — the largest industrial plant in Northampton — is set to close, a casualty of Coca-Cola’s recently announced deal with manufacturer Refresco.
“After careful consideration The Coca-Cola Company has decided to close our production facility in Northampton, Massachusetts,” the company said in a statement to The Republican on Thursday. “We did not make this decision lightly and are grateful to have had the opportunity to have been a part of the Northampton community.”
The plant will close in late spring 2023, the company stated. Workers are encouraged to seek out-of-state employment within the Coca Cola or Refresco companies.
Workers at the plant were informed of the decision today.
State and local officials contacted by The Republican were unaware of the plant’s impending closure.
Northampton Mayor David Narkewicz said he received a ”vague” email that came after business hours on Tuesday. He was unable to speak with Coca-Cola Wednesday but said a conference call has since been scheduled.
He said he’ll use the opportunity to advocate for the plant and for Coca-Cola to reconsider the decision. He noted that both the city and state governments spent money supporting Coca-Cola’s expansion in Northampton just 10 years ago.
“Obviously it’s disappointing,” Narkewicz said “They are a major employer, not just for Northampton but for the region.”
Beyond employment, he’s also concerned about the impact on Northampton’s industrial tax base and water revenue. Coca-Cola is a major customer for Northampton water.
Coca-Cola pays nearly $319,000 annually in property taxes, as well as $2.4 million in water bills, according to the city collector’s office.
The Coca-Cola property is assessed for tax year 2022 at $17.8 million, said Marc Dautreuil, principal assessor for the city. It’s the largest industrial plant in Northampton with L3 Harris, the former Kollmorgen Electro-Optical, on Prince Street, coming in a close second.
The plant is in year nine of a 10-year TIF, or tax increment financing, agreement, Dautreuil said.
At $17.8 million, Coca-Cola represents about 17% of the city’s industrial tax base of $109 million, Dautreuil said. The city has a smaller industrial base as compared to communities like Westfield, Holyoke and Agawam.
But even when it closes, taxes from the Coca Cola property won’t plummet to zero. For one thing, the plant stays on the tax rolls as of its status on Jan. 1 of each year. So if it closes in spring 2023, that gives Northampton some time.
Also, the plant would still have value even if it were empty and for sale, Dautreuil said.
Coca Cola USA, a division of the Coca Cola Co., bought the former Mid Atlantic Canners Association plant in 1995 for $5.2 million and produced beverages there like Fruitopia, Minute Maid Juices To Go, and Nestea Ice Teas.
A $50 million expansion project was completed by Coca Cola North America a decade ago. It resulted in the creation of 100 new jobs, boosting employment at the plant to more than 200.
In recent years, the 455,000-square-foot plant produced non-carbonated products, like Powerade, Gold Peak Tea and Vitamin Water.
Refresco, based in the Netherlands, will package Coca Cola products in the United States under an agreement announced on Wednesday. The company bought just three Coca Cola hot-fill plants — those in Truesdale, Missouri; Waco, Texas; and Paw Paw, Michigan.
As a result, the soft drink giant will shut down the Northampton plant at 45 Industrial Drive and another in American Canyon, California, Mark Rahiya, chief commercial and supply chain officer for Coca Cola, told Beverage Digest in an interview.
“The key goal of our asset right strategy is to build a network of scaled, capable, third-party co-packers who can help us drive growth, unlock value, and lead innovation for the long term,” said Rahiya of the Refresco agreement. “We know what we’re good at. We are great in brand marketing, we have strong customer partnerships, and we have a strong franchise system. And we’re good in our supply chain, too. But we also know there are others out there who have deeper expertise in particular areas than we do.”
(This is a developing story and will be updated.)
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