Andrew Souza, president and CEO of Community Food Bank, shows how crowded the organization’s tiny warehouse is in South Fresno.

published on January 19, 2018 - 1:37 PM
Written by David Castellon

Back in 2007, when Community Food Bank began leasing office and warehouse space in a south Fresno industrial park, workers and volunteers had all the room they needed at the time to collect and disperse food to organizations helping people in need.

But in the years that followed, that number of people going hungry in its five-county service area has grown, and the nonprofit that distributed the equivalent of 6-6.5 million meals to people just over a decade ago increased that volume year after year, to just under 34 million meals in 2017.

Staff and volunteers have done this from the same 41,000-square-foot warehouse.

That will change in the coming months, as the nonprofit quietly signed an agreement last month to purchase for an undisclosed sum Valley Wide Beverage’s warehouse and office about 2.5 miles northwest of the Food Bank’s current locale.

Valley Wide is in the process of building a new, larger office and distribution center for beer and other spirits at another south Fresno location, alongside the new Ulta Beauty and Amazon distribution centers.

In an interview last month, Valley Wide’s founder and CEO Lou Amendola told The Business Journal that instead of putting his company’s current 140,000-square-foot facility up for sale on the open market, he was negotiating a deal for the Food Bank to purchase it at a price considerably lower than market rate to make it its new headquarters.

Not long after that, Amendola and the Food Bank quietly signed the purchase deal, said Andrew Souza, president and CEO of the food bank.

“It’s perfect for us,” he said, adding that he hopes for the Food Bank to move in by the end of July, after Valley Wide moves into its new, 300,000-square-foot facility.

That move can’t come soon enough, Souza said, noting that in terms of space within the Food Bank’s 40,000-square-foot warehouse on East Central Avenue, “Right now, this is a size-eight shoe, and we’ve grown to a size 10-foot.”

As he gave a tour of the facility earlier this week, he noted the high shelves packed almost to the ceiling with boxes and creates of food, while some of the aisles between them were lined with large boxes packed with donated canned goods.

One of the refrigeration units was packed to capacity with food that needs to stay cold, and Souza noted that during the summer months, usually from May to October, the Food Bank has to rent space in off-site refrigeration units because some vegetables and fruit would go bad in the hot warehouse, which isn’t insulated and has no cooling or heating system.

Souza noted an area where volunteers should be sorting food, but that can’t happen that morning because the area needs to be kept clear for safety because workers on forklifts need to run newly-delivered pallets of food through it.

“We don’t have enough room, meaning it’s hard to move around, hard to sort things, hard to separate the good [food] from the bad,” said Jesse Armstrong as he stocked boxes of food onto pallets.

Souza said the space also causes efficiency problems, as items frequently have to be shifted around by hand or on forklifts to access other areas of the warehouse.

Such situations shouldn’t be a problem at the new warehouse, as it will have more than three times the space — considerably more than what the Food Bank needs now or in the foreseeable future, Souza said.

“This is the building that we will be in certainly through the end of my lifetime.”

In addition, Amendola said he plans to leave his cold-storage units behind, as he plans to install new ones at the new Valley Wide facility.

As such, “We’re going to have almost 40,000 square feet of freezer and cold storage in the new facility,” literally 40 times more space than the Food Bank now has.

Amendola also plans to leave behind equipment for loading and moving heavy pallets of items, shelving and even the furniture in the offices, all of which the Food Bank intends to use.

The larger office space will come in handy, as the Food Bank has a portable office in its parking lot because its current 4,000-square-foot office can’t accommodate all the nonprofits administrative staff and volunteers.

Souza said the added space also includes conference rooms that will be used for personnel and volunteer training and public education classes. He added it possibly may be made available to other nonprofits for meetings and gatherings.

As for how this all came about, Souza described it as a “perfect storm of events” — Amendola made a contribution to the Food Bank last year, during which he heard about the organization’s space problems, and the businessman suggested selling the organization his facility once his business vacates the site.

For his part, Amendola told The Business Journal last month that he needed more room for his business and was considering expansion, but circumstances changed when construction began on a leg of the California high-speed rail line over his warehouse. Support pylons for the elevated train built on the property are costing him 100 parking spaces, along with restricting the movement of some delivery trucks.

The Food Bank doesn’t have nearly the 300 workers Valley Wide has, so the organization can work with the 100 fewer parking spaces, Souza said.

“Hey, in business, if you can make lemonade out of lemons, that’s great, and that’s what we did,” Amendola said of the sale, which currently is in escrow.

As for the cost to purchase the Valley Wide facility, both he and Souza declined to specify the amount. Amendola said last month that he probably would sell the property for $5 million, several million below market value, but it’s not clear if that was the final price negotiated.

As for how the Food Bank will pay for its new home, Souza said a six-month fundraising campaign is being developed to cover at least part of the purchase price — which he said is in the millions of dollars — and his organization is looking at tax-exempt borrowing and a new market tax credit project as possible options to borrow the rest.

The latter option is a federal program in which qualified applicants, which can include nonprofits, apply for tax credits from the U.S. Treasury Department. Those credits can then be turned over to private investors, which in turn loan the applicants the money they need, usually at better interest rates and conditions than standard loans.

Souza didn’t disclose what fundraisers are planned to raise the money.

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