More than 300,000-square-feet of industrial space is emerging in south Petaluma, providing several local businesses with more elbow room in a market that’s squeezed for space while boosting the economy with an influx of new jobs.
The largest of three ongoing projects, the estimated $35 million development of the 267,840-square-foot Cader Corporate Center, is expected to be completed in the coming weeks. The three buildings at the 1480 Cader Lane complex have already been pre-leased to four Petaluma-based companies, according to leasing agency Cushman & Wakefield’s Managing Director Steven Leonard.
Wine-centric Scott Laboratories and dairy producer Clover-Stornetta Farms in late January signed 10-year leases for 58 percent of complex, and both companies are slated to move into the space in December, Leonard said. Organic cheese-maker Cowgirl Creamery and hydroponics supplier Hydrofarm also inked 10-year leases in recent months, and will move in after the first of the year, he said.
The city’s industrial real estate is nearly 95 percent occupied, according to 2016 data compiled by the Sonoma County Economic Development Board, and Leonard said that it’s no surprise that the center was fully booked ahead of its completion.
“It’s just indicative of how tight the market is - there’s no warehouse space up there,” he said. “The vacancy rate for industrial space is less than 5 percent – it’s just crazy. We’ve got big rents, the highest industrial rents ever in Petaluma’s history.”
For Clover Stornetta Farms, a century-old company with deep roots in Petaluma, the move into a 64,000-square foot Cader Lane warehouse will provide an opportunity to consolidate a number of outside storage facilities, giving the company room to focus on growth locally, according to chief operating officer Ken Gott.
“We’ve just really outpaced our capabilities of the facility we have. This really helps us to be much more efficient in our operations and keeps us from moving product back and forth from multiple locations,” he said.
The growing company currently employs a workforce of 255 and is planning for continued growth, though it’s not clear how many jobs will be added with the expansion, Gott said.
“We’re really focused on continuing to expand within this region and that will certainly fuel more jobs in the area as we continue to grow,” he said. “Without this facility, it would have been hard for us to grow.”
Scott Labs plans to consolidate its three Petaluma locations under one roof in a 94,000-square-foot building at the Cader Corporate Center, according to Executive Assistant Diane Krebs.
The company, which has locations in Healdsburg and Paso Robles, offers laboratory services and sells fermentation supplies, filtration media and packaging, such as bottle closures, to the wine, cider, beer and spirits industries. Krebs said the move will streamline operations, though it doesn’t necessary point to immediate growth to the 85 employee workforce.
“We will settle in and see where it takes us,” she said, adding that the company decided to remain in Petaluma because of already established ties with the community.
Cowgirl Creamery, which was recently purchased by Swiss dairy giant Emmi, plans to move into a 30,000-square-foot-space at the center, Leonard said. Representatives for the company could not be reached for comment about expansion plans, though Petaluma’s Economic Development Manager Ingrid Alverde said her conversations with representatives indicated the company plans to transition out of its current Petaluma production facility.
Hydrofarm, a nearly four-decade-old wholesaler and manufacturer of hydroponics equipment and grow lights with seven distribution centers nationwide, will move into an 89,000-square-foot space at the complex. Multiple calls and emails seeking comment from the company were not returned.
Meanwhile, Petaluma-based disposable laboratory equipment manufacturer Labcon was this week given the green light by the city’s planning commission for a 40,000-square-foot expansion project on a 10-acre lot at 3200 Lakeville Highway, adjacent to the Cader Lane development.
The 57-year-old company that moved to Petaluma in 2003 plans to start the estimated $4 million construction project in April, according to President Jim Happ. The new warehouse will accommodate distribution space for the growing business that’s headquartered in a 125,000-square-foot nearby facility at 3700 Lakeville Highway.
“In the long term this will allow us to grow. I can see us adding 20 to 30 more jobs in the next two to three years,” Happ said, adding that the company currently has 220 employees.
Nearby, Petaluma Poultry, a 47-year-old poultry processor, is also undergoing its own nearly 4,000-square-foot expansion project at the 2700 Lakeville Highway faculties. The addition of office space and parking comes as the company switches to operating on a 27-hour, seven day a week, schedule, and will allow for the addition of 53 new employees to its workforce of 249, according to a February 2015 city staff report.
Alverde said the growth of local companies within the city is a sign that Petaluma’s economy is “vibrant and growing.”
“It’s great example of why business retention and expansion is so important,” she said. “I think that it’s obviously good news for those companies that are doing well and expanding and adding employees. The fact that they are expanding square footage locally and not going elsewhere demonstrates that Petaluma has remained competitive and is a good location.”
Alverde said that the movement of companies, such as Scott Labs and Cowgirl Creamery, will open more space for other local businesses to expand locally or for new businesses to come into the city, allowing for further economic growth in city that doesn’t have much space for new industrial developments.
“There’s a trend of business growing and expanding and moving and other companies coming in from behind, and my expectation is that will continue,” she said.
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