Wednesday, Feb. 24, 2010

Bakery to bring 84 jobs

Northeast Foods, which supplies buns to McDonald's, plans to create 84 jobs and invest $25.4 million to build a bakery in Clayton.

The company, which is based in Baltimore, could get more than $3 million in financial incentives. Northeast will likely receive a $350,000 grant from the One North Carolina Fund through the N.C. Department of Commerce, Gov. Beverly Perdue's office announced Monday.

Johnston County Commissioners on March 1 will consider a proposal to offer the company $1 million in tax breaks over several years, said County Manager Rick Hester. Clayton is considering offering the company $800,000 in tax breaks over eight years, said Town Manager Steve Biggs. The town could also apply for a state grant for Northeast for as much as $750,000, he said.

Northeast plans to create the jobs over the next two years. The average annual salary will be $41,815, which is higher than Johnston County's average salary of $31,408, according to the governor's office.

The company chose Clayton partly because of its proximity to the new Golden State Foods warehouse in Garner, said Michael Tsakalos, a Northeast accountant who served on the company's site-selection committee. Golden State Foods, which opened in Garner last year, ships supplies to McDonald's restaurants in several states. Another Golden State Foods site is in Lexington, S.C.

"We wanted to be further south to serve the market in this part of the country," Tsakalos said. "It's part of McDonald's supply-chain strategy."

Although Northeast has other customers, the 80,000-square-foot bakery off of U.S. 70 Business in Clayton will bake buns only for McDonald's, Tsakalos said. The bakery will be able to make up to 72,000 buns an hour, according to the company.

The company considered other sites for a new bakery, including Wake and Harnett counties. It also considered Lee and Dillon counties in South Carolina, Tsakalos said.

He said financial incentives played a part in the company's decision to move to Clayton. The proximity to Interstate 95 was also a factor, he said, as was Clayton's recent ranking in Business Week magazine as one of the country's most affordable places to live with good schools.

"We thought that it provided the best business opportunity for our company," Tsakalos said.

Northeast Foods, which has supplied McDonald's restaurants since 1965, has five sites across the country and employs more than 600 people, Tsakalos said. Construction of the Clayton bakery is set to start this summer, and the site is set to open in the spring of 2011.

As for incentives, County Commissioners Chairman Wade Stewart said it's important for local leaders to help when jobs are at stake. "It's always been important, but it's especially important now, I'd say," he said.