Greeley cuts cheese deal

GREELEY – Northern Colorado dairies and the city of Greeley cheered in June when Denver-based Leprino Foods Co. announced it had selected the city as the site of its newest cheese and whey production facility.

The announcement ended a waiting game that had been going on for at least six months, as company officials negotiated with the city on incentives for razing the former Great Western Sugar site in east Greeley and building a new facility that could encompass 870,000 square feet and employ up to 500.

Leprino picked Greeley over another potential location in Garden City, Kan., after the Greeley city council set up a tax increment district for the former sugar beet-processing site and agreed to supply Leprino with water for its water-intensive business at about one-third of the cost it would have had to pay on the open market.

“We are excited about the potential of welcoming Leprino Foods to Greeley as the anchor tenant of the new Western Sugar Tax Increment District,´ said Greeley Mayor Ed Clark at the time. “I cannot think of a better business to launch the district.”

Greeley was able to supply the water through an industrial development water bank it created in 1999. The jobs and economic spinoffs of the cheese factory will more than repay city residents who purchased most of the bank’s water rights in the early 1990s, said Jon Monson, Greeley’s water department director.

Big cheese

Denver’s Leprino is one of the nation’s biggest mozzarella makers, with clients that include Pizza Hut, Domino’s Pizza and Papa John’s and annual sales of about $1.7 billion. The company has nine plants in the United States – including one in Fort Morgan – and two in the United Kingdom.

The former Western Sugar site has been razed of the deteriorating sugar beet-processing buildings and smokestack that stood for more than 100 years. Mike Reidy, Leprino Foods vice president, said groundwork is well under way for the new facility.

“We’re still in the process of crushing and recycling as much of the concrete and brick from the site as we can,” Reidy said Dec. 9. “We hope to begin very shortly the process of building the pad for the site, which will involve a very substantial amount of earthwork.”

Reidy said work at the site will continue throughout the winter and everything is on schedule for opening the facility. “We’re still shooting for the summer of 2011,” he said.

Reidy said tax and water incentives offered by the city of Greeley were “critically important” to the company choosing to build in the city. He also noted the region’s strong dairy industry as another vital component to the decision.

“That was extremely critical,” he said. “It was probably the most critical factor in siting the plant in northeast Colorado as opposed to someplace else.”

Huge opportunity

Local dairy producers – particularly those who are members of the Dairy Farmers of America, which has the contract to supply milk to Leprino – are overjoyed by the prospect of shipping their milk to the Greeley plant, according to Les Hardesty, owner of Cozy Cow Dairy near Windsor and immediate past president of the National Dairy Board.

“I think Leprino coming into Greeley was just huge,” he said. “Just being able to process our milk locally and the environmental impact of not shipping it to other states is huge.”

Hardesty noted that having a local customer like Leprino will go a long way in ensuring that dairy farming in the region continues far into the future.

“The opportunity for dairy families to bring in a new generation to dairying is just wonderful,” he said. “They need milk the day they open and we need a market, so it’s a win-win for everyone.”

Locals first

Hardesty said the DFA already has a contract to serve Leprino’s Fort Morgan facility and one to serve the Greeley plant when it opens. He said local DFA members will be at the head of the line when it comes to delivering their milk to Leprino.

“We are giving our existing producers the opportunity to fill Leprino’s needs first,” he said. “Why not give the people who have been here a long time the opportunity to meet the new demand?”

Hardesty said Leprino’s presence may draw in new dairies to the area and encourage some out-of-state operations to relocate to Northern Colorado, but that will likely not happen immediately. He said when the Leprino plant goes to full capacity – expected within a few years after its initial opening in 2011 – there is more of a likelihood that new dairies will get a chance to provide milk to the cheese plant.

“If we don’t get enough milk locally, we’d open it up to producers in other areas to come in but I think most of the (dairy) growth will be internal from existing facilities,” he said.

Leprino Foods expects to process 4 million pounds of milk a day when it first opens and 7 million pounds a day at full capacity.

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