Ocean Spray building second plant

Grace Leong and Richard N. Velotta

Wednesday, July 21, 1999 | 11:10 a.m.

Ocean Spray Cranberries Inc. plans to build a 300,000-square-foot distribution center in Henderson.

The company, which already operates a 200,000-square-foot manufacturing plant in Henderson's Gibson Industrial Park, plans to break ground within two weeks and complete the distribution facility by January.

"Henderson is the best place to expand our distribution system, because the base of our manufacturing operations is already there, and also because it has great logistics to provide customer service," Chuck Huff, logistics manager, said.

The new Henderson plant is expected to service 11 western states.

Staffing plans are uncertain for the new plant.

Officials said that under one option, some 30 employees at the existing distribution facility -- located at American Pacific Drive and Gibson Road -- will be relocated to the new distribution center in Henderson.

The project was announced Tuesday by representatives of Colliers International, which brokered the $13.5 million deal.

The announcement was made in conjunction with the issuance of Colliers' second-quarter real estate market report.

Ocean Spray's planned Western Region distribution center will be located on 15 acres in the Black Mountain Industrial Park at U.S. 95, north of Warm Springs Road. Ocean Spray is signing a 10-year lease on the property, which is being developed by Western Realco.

The building, termed by Colliers officials as one of the largest build-to-suit projects ever in the state, is expected to have a high profile on U.S. 95, across the freeway from the Valley Auto Mall complex.

The center will be about a mile from Ocean Spray's existing plant, which opened in August 1994. The $50 million manufacturing plant, which employs about 200, produces juice products.

The addition of the Ocean Spray facility takes some of the sting out of the departure of the 300,000-square-foot Big O Tire regional distribution center in Henderson. The facility, which opened in early 1995, is scheduled to close in October as Big O changes its distribution strategy.

Colliers industrial real estate expert Thomas van Betten said the Henderson market also saw a rise in the industrial vacancy rate to 10.8 percent when Levi-Strauss closed 250,000 square feet in the quarter. The company built a larger plant before the closure.

Van Betten said the Big O closure would be reflected in third-quarter statistics.

Colliers' overall assessment of the real estate market is similar to its forecast in the previous quarter, with property in the southwest part of the valley remaining in the spotlight. The reason: Phases of the Las Vegas Beltway will continue to be completed, opening up new land for development.

In addition, 5,000 acres of federal land west of McCarran International Airport and under airport control may be released to developers in the next year. The Clark County Commission is continuing to debate how the land will be disposed of.

Dave Sundaram of Colliers' Land Division said another factor influencing development of the southwest valley is the pending sale of some land tracks within the Rhodes Ranch development.

A spokeswoman for Rhodes Ranch said Desert Oak Homes has acquired about 30 acres for the development of single-family homes in Rhodes Ranch, and U.S. Homes has acquired about 110 lots in the area.

Rhodes also is in the process of selling several parcels identified for commercial development in the Rhodes Ranch master plan.

Terms of the Desert Oak and U.S. Homes acquisition were not announced.

Other trends Colliers experts observed in their second-quarter report:

* The office real estate market is expected to tighten in the next 12 to 18 months as vacancy rates decline below the 10 percent level and rents continue to rise. Colliers' Thomas Stilley said the downtown market is expected to remain static, even with reports flying that the city is attempting to rejuvenate downtown with a proposed sports arena.

* The industrial sector slowed as predicted but is expected to pick up again in the last two quarters of the year, a common cycle. The additional vacancy resulting from the Levi Strauss closure was countered by the sale of the H&O Foods Cold Storage facility to Lear Entertainment, which is turning the building into a studio and sound stage. Closures of Big O and a Rite-Aid distribution facility in North Las Vegas should be balanced by the anticipated absorption in the southwest valley.

* Housing prices are continuing to rise faster than income levels, and higher land prices are putting a squeeze on small private builders. Builders are continuing to see rising costs and shrinking margins, but apartment development is expected to continue at a near-record pace for the rest of the year.

* Demand continues to be high for retail space on the Las Vegas Strip. The market is expected to continue to stay hot, said Colliers' George Connor, even with the addition of stores at the Venetian, the Aladdin and the Paris hotel-casinos and expansions at the Fashion Show and Forum Shops at Caesars.