News Article | 3/13/2004

Stater Bros. Keeps Feet On Inland Ground With Operations Base

Riverside Press Enterprise03/13/04

STATER BROS. KEEPS FEET ON INLAND GROUND WITH OPERATIONS BASE Grocer CEO spurns many suitors in consolidating at former Norton site

By PHIL PITCHFORD / The Press-EnterpriseIt will take more than a pair of nice cowboy boots to get Jack Brown away from his roots.Brown, a San Bernardino native and the president of Stater Bros. Markets, would have been welcome anywhere in the Southwest as he looked to build a $200 million distribution facility and corporate headquarters. One suitor from Arizona even sent him a pair of shiny boots stamped with Brown’s initials.”That was really nice of them,” Brown said. “But I don’t think so – adios.” Brown, who sought a site less than 30 minutes from Colton for the convenience of his workers and the proximity to his stores, confirmed Friday that he intends to move just seven miles to the former Norton Air Force Base in San Bernardino. He told more than 100 community leaders at the former base that he has an agreement in principle with the Inland Valley Development Agency, which controls the former base.Although details will not be ironed out until later this month, Brown was ebullient as he promised community leaders, including several boyhood friends turned elected officials, that Stater Bros. will lead the way in replacing jobs lost when the base closed in 1994.”Is it a great day in San Bernardino or what?” Brown exclaimed after being introduced to a standing ovation. He said he attracted great interest from other cities, counties and states – hence, the new footwear.Plan in place The company will acquire and develop about 160 acres once it completes negotiations with the development agency and Hillwood, the Dallas-based master developer transforming the former base into an industrial park called AllianceCalifornia.The distribution center initially will have 1,734,500 square feet of space, increasing eventually to 2,178,250 square feet – adequate space to store enough nonperishable groceries to stock all 157 markets for three weeks.A two-year construction process, expected to employ more than 500 workers, will start by demolishing existing buildings this summer, with construction under way later this year, company officials said. The facility will house 1,600 employees now working at eight facilities around Colton and Redlands, with employment rising to 2,000 within 18 months and eventually to 2,500, Brown said. Annual payroll is expected to be $130 million.While Brown and the development agency do not have signed agreements, both sides said they have agreement on all major points.”Jack Brown had a number of communities that desperately wanted this,” Congressman Jerry Lewis, R-Redlands, said. “There is no doubt that Jack is committed to his hometown.” Lewis, who graduated two years ahead of Brown at San Bernardino High School, referred to his former classmate as “our own Horatio Alger.” Another high school classmate, San Bernardino Mayor Judith Valles, said: “Jack is a homeboy, and I say that with a great deal of affection. I thank Jack for never forgetting his roots.”Valles said the project will attract more development to the city, which is bouncing back after the mid-1990s closure of Norton eliminated 10,000 jobs and sparked a deep recession and plummeting real estate values. “It’s a big day, a defining moment for us,” Valles said.Reshaping a base and its areaCounty Supervisor Dennis Hansberger, who grew up in Redlands, said the move will return the former base to economic prominence in the area. “Today we stand with a lot of hometown folks to launch the latest step in Stater Bros.’ adventure in the grocery business,” Hansberger said. “It’s not just somebody from somewhere else.”Chain still growing The company was founded in 1936 in Yucaipa by twin brothers Leo and Cleo Stater and has grown into the largest privately owned supermarket chain in Southern California.Although Brown jokes the company is thrifty enough to have a corporate hang glider instead of a jet, Stater Bros. has annual sales of about $3 billion this year, up from $2.75 billion in 2003.As Brown answered questions after his announcement, San Bernardino construction executive Martin Matich approached him and said, “You’re the best thing that ever happened to our town.”Brown himself poked fun at how many of the East Valley’s political and business leaders had come to the announcement. Many shared an anecdote about Brown, and vice versa.”There are two families from Ninth and Mount Vernon that we haven’t introduced yet,” Brown joked shortly before wrapping things up. “But everyone else is here.” Don Rogers, interim executive director of the development agency negotiating with Stater Bros. on the project, said local officials had hoped the base would make a faster transition to private use. Instead, the lack of even a limited military presence meant a lack of operating money to work with.Brown could have built on clean dirt just a few miles away in Redlands without dealing with the former base, which like many former military facilities can be a challenge, given past concerns over toxic soil contamination and other issues.”Today clearly marks the most significant economic impact since the base conversion,” Rogers said. “Jack could have taken an easier way out – he did not.”Development hurdle Friday’s announcement left at least one business owner unsure of what the next few months will bring. Chester Marcell, owner of Coast Paper Box Co., a box manufacturer located on the land slated for the Stater Bros. development, said he doesn’t want to relocate his company and its 60 employees. Marcell, who has refurbished a 73,000-square-foot building from the former base, owns four acres that Brown said are necessary for the center. Rogers said the development agency will try to buy out Coast Paper Box and three other privately owned parcels totaling less than 15 acres. Failing that, the agency will pursue eminent domain to gain control of the properties, Rogers said. Marcell, who attended the announcement, said he is not interested in selling. “We have seven years here,” he said. “We’ve been through some tough times, and now we’re starting to come back pretty good. I poured a lot of money into the building, and we’re not going to go without some fight.” In the meantime, the neighborhood is scheduled to become a demolition zone. Rogers said crews would begin taking down unoccupied buildings whether or not the entire property had been cobbled together. Stater Bros. is the third high-profile company, behind Kohl’s and Mattel, to build at AllianceCalifornia. At 160 acres, however, the Stater Bros ‘ project dwarfs Mattel’s 40-acre warehouse site and Kohl’s 59-acre distribution center.