Hershey sells Chocolate Avenue plant

4 Oct

Hershey Chocolate. Available to buy online from Moo-Lolly-Bar. To do just that click on this image.The Hershey Company’s founding plant no longer belongs to Hershey, but the company will continue to occupy much of the site even as it eyes expansion to the west.

The company sold the 19 E. Chocolate Ave. plant to Chocolate Realty, a Delaware statutory trust, for $50 million, according to published reports. The deed was transferred last week, stating that Chocolate Realty bought the entire 24-acre property.

Chocolate Realty is a company set up by Net Lease Capital Advisors, a New York-based real estate firm, the report states. Net Lease CFO David Blough did not say what plans, if any, the company has for the property beyond leasing part of it back to The Hershey Co. for at least 30 years.

As part of the sales agreement, Chocolate Realty must maintain the “Hershey Cocoa” bushes along Chocolate Avenue and the iconic twin smokestacks.

“This clears the way for The Hershey Co. to occupy a significant portion of the building as office space for our employees,” Kirk Saville, a spokesman for The Hershey Co., said on Friday afternoon. “This is a 30-year commitment.”

Saville said Friday that the company intends to work “to ensure that the property is developed in a way that complements downtown Hershey.”

The sale was made as The Hershey Co. continues its plans for expansion at the West Hershey plant, which Saville called “the world’s largest and most advanced chocolate factory right here in Derry Township.”

In 2010, the company launched a $250 million to $300 million capital-investment plan to modernize and expand its West Hershey facility and close the 106-year-old facility at 19 E. Chocolate Ave. that founder Milton S. Hershey built.

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Between 400 and 500 employees would be laid off as part of the move. Officials estimated these changes could save the company between $60 million and $80 million annually by the completion of the project.

Known as “Project Next Century,” the expansion is adding 340,000 square feet to the existing West Hershey factory. When complete, the plant will total about 700,000 square feet and will be the largest active production facility for the company. Hershey’s Kisses, Hershey bars, Rolos and Hershey’s syrup will be produced there.

The new facility is scheduled to be fully operational by this time next year, and then Hershey plans to stop production at the old factory.

The Chocolate Avenue facility is only one of several properties the company has indicated it is interested in selling.

The others – all on East Chocolate Avenue – include the former community building that houses The Hershey Co.’s marketing department and the nonprofit Hershey Theatre, as well as another small office building in the town’s square, according to the newspaper report.

One other property has already sold – a small tract across the street from the original factory that is home to Tender Years Child Development Center, according to the report. Tender Years recently bought the property for $1 million.

Article posted by Spencer Samaroo, Managing Director, Moo-Lolly-Bar
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Source and Photo: Lebanon Daily News

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