With $32.6 million in public aid, Tasty Baking Co. said yesterday that it would move in 2009 to a highly automated new bakery and distribution center at the Philadelphia Navy Yard.

The facility will replace a 1922 building on Hunting Park Avenue in the Nicetown section of Philadelphia.

Gov. Rendell, speaking at the announcement, said the public assistance was necessary to protect the Tastykake brand, a Philadelphia icon for 93 years, and preserve manufacturing jobs.

"We cannot ignore traditional manufacturing jobs where men and women can earn more than just a living wage," Rendell told reporters after the ceremony.

The public assistance includes about $2.4 million to clean up asbestos and other toxic material left by the Navy. The other aid includes a $1 million loan and Keystone Opportunity Improvement Zone tax breaks that extend through 2018.

In all, five buildings will be erected as part of the project at the former military base, which closed in 1996. The largest will be the 345,000-square-foot bakery and distribution center, on 25 acres next to the 26th Street entrance to the yard, site of the Navy's former brig.

Tasty's corporate headquarters will move into about one-third of a 90,000-square-foot building in the nearby Navy Yard Corporate Center, near the main South Broad Street entrance to the former base.

Tasty Baking will lease its space in both buildings, and the company said it would spend about $75 million on baking equipment and other project-related costs. Construction is to begin late in 2008.

In a statement, the company said the new bakery would allow the number of production lines to be cut from 15 at the Hunting Park Avenue plant to 7, resulting in a reduction of 215 jobs.

Three smaller buildings, totaling 169,000 square feet - so-called flex space, which will be leased for a mix of office and industrial uses - are planned for 15 acres next to the Tastykake manufacturing building.

This complex is in a corner of the base that, without this deal, might have remained vacant for a decade, said John Grady, senior vice president of the Philadelphia Industrial Development Corp., the agency responsible for redeveloping the base.

The developer and landlord for the whole project announced yesterday will be a partnership of Liberty Property Trust, of Malvern, and Synterra Limited Partnership, of Philadelphia.

Earlier, Liberty Property Trust built a new laboratory and manufacturing building next to the office park for AppTec Laboratories Services Inc., of Minnesota. The Tasty headquarters will be the third building in the corporate center.

Rendell said Pennsylvania was making progress in stabilizing its manufacturing base.

He said the state lost 5,000 manufacturing jobs a month in the 2001 recession. By providing funds for training and new technology, government is reducing the losses, protecting traditional manufacturing, and attracting high-tech industry, Rendell said.

Rendell predicted that, by the end of the decade, more people would be working at the Navy Yard than the 11,000 employed there when the Pentagon decided in 1991 to close the base.

Contact staff writer Henry J. Holcomb at 215-854-2614 or hholcomb@phillynews.com.