Last August, Mitchell Bennett, CEO of Benezet Realty Partners, a real estate investment company focused on food logistics, storage and production solutions, was in Montrose, working with local producers on the Western Slope through a USDA grant.
Bennett was already a fan of the area and its proximity to other regional towns, as well as the growing community. While in Montrose, the Russell Stover manufacturing facility was up for sale.
The company hadn’t before come close to completing an acquisition of that size — purchasing a 278,400-square-foot facility. But as Bennett continued to work with local producers, his conversations with those same producers continued to resonate with him.
“One of the things you kept hearing was ‘Boy, if we had local processing, and we could store our product and figure out ways to preserve them more, it would be a bigger market, and a lot more revenue that we could generate,’ and not just for them, but the local economy,” Bennett said in an interview.
Bennett took the opportunity to walk through the plant. It didn’t take him long to see the facility’s year-round and long-term potential.
Although it would be a massive deal to finalize and complete, his decision became clear (he made a letter of intent to purchase the plant shortly after).
With a purchase of that size — it was reported the facility sold for $4.5 million — capital was needed. Bennett reached out locally first, gauging interest from potential investors.
He then reached out to long-time friend Tom Vukota, founder and CEO of VCM Global Asset Management, an investment firm that manages more than $800 million on behalf of high-net-worth individuals, advisors and institutions.
Bennett and Vukota had previously looked at around a dozen different products to team up on, but nothing ever finalized. The chance to purchase one of the largest facilities between Salt Lake City and Denver, though, was the right one (Vukota himself has built two cold storage facilities, one in Detroit and another in San Antonio).
“We see the value of having cold storage,” Bennett said of his and Vukota’s mission. “That’s one of the reasons we made this investment.”
The sale was finalized and announced last week. VCM and Benezet plan to upgrade the facility to provide processing, storage and distribution opportunities for locally produced food.
The facility — now dubbed the Western Slope Food and Innovation Center — expects to play an immense role in Colorado’s broader $7.4 billion food production value chain, and through the plant, producers, distributors, as well as pharmaceutical companies, can distribute directly across four states (Arizona, Utah, Colorado and New Mexico).
The plant is expected to contribute to food waste reduction while adding potentially hundreds of jobs.
Massive commercial freezer may play a pivotal role
Bennett and the Benezet team have big plans for their new acquisition. In addition to upgrading the facility for processing, storage and distribution, the chiller and boilers, both decades old, are expected to be replaced. And newer equipment and technology can help the freezer get down to -50 degrees, if needed, once implemented.
With help from the Montrose Economic Development Corporation (MEDC), they’ve already removed a pair of storage tanks, a 6,000 gallon underground tank, and performed full soil sample testing to ensure there was no contamination in the land.
There’s room for cooler storage, separate rooms that are temperature controlled, 25,000 square feet of dry storage, and perhaps the biggest asset of all, the freezer.
“There’s an opportunity to have a very, very large freezer in that four corners region for food preservation,” Bennett said. “You freeze food to keep it longer, and from a local economy standpoint, we’ve got a lot of producers that have a lot of material that doesn’t get into the market — it’s wasted because they can’t preserve it.”
Some examples Bennett provided were products like “Olathe Sweet” sweet corn or Palisade peaches and freezing them in the facility so they can be sold year-round. (It’s a considerable development, especially after the Palisade peach freeze of 2020 on the Western Slope wiped out what producers say was a significant portion of the state’s peach crop).
And the freezer is massive — it’s 43,000 square feet, a near acre’s worth of space to store local products.
Bennet added that, because the region is in severe drought, preservation is all the more important to mitigating food waste and potential impacts from the drought. The pandemic, too, has caused disruption to producers and distributors, so the facility, he said, has the potential to provide immediate value.
“The idea that we can have the capability of freezing food and keeping it for a year and selling it year-round is a big boost for a lot of people,” Bennett said.
That potential boost has already been acknowledged. Benezet has received immediate interest from companies to move into the property, so much so that Bennett and his team have already compiled a lengthy list.
The property was listed nationally this week.
With interest high, all options ‘are on the table’
With so much interest, Benezet is trying to figure out how to bring in multiple tenants into the property, rather than having just one company inside the facility, Bennett said, though all options are on the table. For example if a tenant wanted to use all the space, it is welcome to do so, but if it doesn’t need the entire space, there’s a second floor in the facility with its own commercial kitchen, cooler space and processing line, as well as an elevator to get product into the freezer, allowing another tenant some options for a potential move-in.
The companies can hire locally, use their own staff or hire some of the former Russell Stover manufacturing facility employees. As of last week, 72 former Russell Stover employees who worked in the facility are on a list for reference to any companies that move in, and many already have food safety experience, Bennett said, which could help ease the transition and have a company starting operations sooner rather than later.
Bennett isn’t certain yet as to the exact number of employees who will work in the space, since it’ll be up to the companies to make those personnel decisions, but he referenced Russell Stover’s employee numbers (300-400) as a potential figure.
Currently, Benezet is working through floor planning, to follow food safety, avoid cross contamination in the event multiple tenants occupy the space. It’s the start of a process for a facility that Bennett expects will become a “produced-focused supply network that connects to residents in surrounding communities.”
“Now the fun part starts where we can start bringing in some really high quality brands that say, ‘Hey, I want to make Montrose our new home, and we want to hire people and stimulate the economy,’” Bennett said. “It’s really exciting. We’ve had a lot of producers who have sent some congratulations and said ‘we’ve needed this for a long time.’”
Josue Perez is a staff writer for the Montrose Daily Press