Hershey opts to build plant in Va., not Md.


Hershey Foods Corp. announced yesterday that it will build a $60 million state-of-the-art pasta plant in Frederick County, Va., forsaking Frederick County, Md., the other finalist in the economic development duel.

Hershey's decision represents the second time this year that Maryland has bowed to Virginia in a battle to attract new business to the state. Last month, St. Louis-based General Dynamics Corp. decided to move its headquarters operation to Northern Virginia, despite substantial efforts by Maryland officials, including Gov. William Donald Schaefer.

The pasta plant, to be located in an industrial park just south of Winchester, Va., will produce some of Hershey's Pasta Group brands, which include Delmonico, San Giorgio, Ronzoni and others. The company will begin to build right away and expects the plant will employ about 100 people when it opens for business in the third quarter of 1993, Hershey said.

"We were impressed with the infrastructure and support systems available to us in the Commonwealth of Virginia and the cooperation and support of the folks in Frederick County, Va.," said C. Mickey Skinner, president of the Hershey Pasta Group, which also has locations in Lebanon, Pa.; Long Island City, N.Y.; Omaha, Neb.; Louisville, Ky.; Kansas City, Kan. and Fresno, Calif.

Ray Richeson, an account manager with Virginia's economic development department, said his office offered no financial incentives to lure Hershey. "We don't have a lot of inducements for companies coming in, so we can keep the taxes low for the companies that are here," he said.

One factor that may have made a difference was Virginia's labor climate, according to June Wilmot, director of the Winchester/Frederick County Economic Development Commission. She said Hershey specifically asked about Virginia's status as a "right-to-work" state, under which workers are not required to join unions.

But Ronald L. Sundergill, president of the Frederick County, Md., commissioners, dismissed the labor factor. He said his county has very little union activity and the topic never came up in discussions with Hershey.

Instead, the Hershey, Pa.-based company told Maryland that the Virginia site met its future needs better, Mr. Sundergill said. "They called us and said that the flexibility for expansion wasn't as good in Maryland as Virginia," he said.

Apparently that factor was more important to Hershey than the $1.25 million in loans that Mr. Sundergill said Maryland officials offered to make to Frederick County for water, sewer and road improvements to the site just south of the city of Frederick. At the 11th hour, Maryland's Department of Economic and Employment Development also offered a low-interest loan of $400,000 to eliminate the price difference between the two properties in the two Fredericks, Mr. Sundergill said.

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