In Bordentown City, known for its popular cranberry festival, the decision by Ocean Spray Cranberries Inc. to move its plant to Pennsylvania, far from the bogs, has left a bitter aftertaste.
"I don't know what we're going to call the festival now - the 'apple pie'?" Mayor Jim Lynch said sarcastically, following the farm cooperative's recent announcement that it would relocate its juice processing and bottling operation to the Lehigh Valley.
Nearly $40 million in tax breaks, grants, and low-interest loans were offered by state and local agencies to get Ocean Spray to stay, say government officials.
Though 26 Ocean Spray cranberry growers will continue to harvest in New Jersey, the loss of the facility is a blow to the state, which under the Christie administration has promoted itself as business-friendly, say officials in Trenton and Bordentown. The company's flight has sparked a rallying cry among some New Jersey legislators who say that high energy taxes are behind Ocean Spray's decision, though the company has not cited those taxes as a reason for leaving.
"At a time when New Jersey's economy is struggling to rebound, especially in the manufacturing sector, we must improve our business climate," Assemblyman Domenick DiCicco Jr. (R., Gloucester) said Monday.
For 68 years, Ocean Spray has been a major presence in Bordentown. The processing plant produces about 30 million cases of cranberry juice a year, about a third of Ocean Spray's output.
By September 2013, the 500,000 square-foot-brick plant on the outskirts of the quaint downtown will close. A task force is being created to attract new business to the area, Lynch said.
The facility - not up for sale at this time - employs 250 people, a company spokesman said. Ocean Spray sponsors a festival that attracts as many as 15,000 people each October, donates juice for various local fund-raising events, and until now has kept up relations with the town of 4,000 residents.
Ocean Spray shocked workers when it revealed with little notice that it planned to build a $120 million operation at an unspecified location near Allentown. The Bordentown plant was a symbol of one of the state's leading agricultural industries and a major employer in the region.
Though the company says it will offer workers jobs in Pennsylvania, the new facility is expected to require 150 employees to operate, a work-force reduction made possible through technology improvements. Ocean Spray has called Bordentown the oldest and most costly to operate of its eight plants.
Stephen Lee 3d, the only New Jersey cranberry grower on Ocean Spray's 15-member board of directors, supports the relocation by the company, which grosses $2 billion a year.
"We have roots in New Jersey and would like the processing to remain in the state, but it's not as economically possible to remain in the state," said Lee, whose family has owned bogs in Chatsworth since 1868.
"Energy, transportation, and logistics - they're all significant," he said, ticking off reasons for the move.
New Jersey is the nation's third-largest producer of cranberries, behind Wisconsin and Massachusetts. Many of the bogs are in the federally protected Pinelands. But proximity to the processing plant is no longer a factor.
"It's been 25 years since the berries went directly to Bordentown," Lee said.
After they are dropped off at a Chatsworth receiving station, the berries are washed, sorted, and shipped to Vineland, N.J., and other locations to be frozen, or to Massachusetts to be made into concentrate, Lee said. Some of the fruit is later delivered to Bordentown, while other batches go to processing plants in Texas and elsewhere.
State, county, and local officials had worked since September to persuade Ocean Spray to stay, said Assemblyman Joseph R. Malone 3d (R., Burlington), whose 24-year tenure as Bordentown's mayor ended in 1997.
Instead of negotiating or telling them the company's decision was final, Ocean Spray wasted officials' time, Malone said. The company offered no plausible explanation for the relocation, he said. On the contrary, he said, it told them that a renovation of the old facility would cost $90 million compared with $120 million to built a new plant.
"In all of my career, I was never dealt with in a more duplicitous, insincere fashion," Malone said.
The offices of Lt. Gov. Kim Guadagno, the state's liaison for business, and Gov. Christie were joined by the County Economic Development Office and other agencies in proposing an array of grants, tax credits, low-interest loans, and solar credits to Ocean Spray, Malone said. The Board of Public Utilities offered credits and options to reduce energy costs, Malone said.
"New Jersey officials worked hard to keep Ocean Spray in Burlington County, beginning with a number of meetings last fall," said Fred Snowflack, a spokesman for Guadagno.
Lynch, the current mayor, also accused Ocean Spray of a lack of candor and loyalty. The town agreed to forgive some taxes on an upgraded facility if Ocean Spray stayed, and after conducting a $10,000 study, it agreed to handle all of the facility's industrial sewerage treatment.
Ocean Spray "carefully considered the options [New Jersey] officials brought to us," company spokesman John Isaf said in an e-mail statement. After much debate, he said, the board based its decision on a projected $15 million-a-year savings Ocean Spray would realize by moving.
The company took into account "a variety of factors," he said, including lower energy costs, transportation and distribution logistics, proximity to supply chain partners and customers, labor costs, and other "utility cost advantages," and "a more efficient and modern infrastructure and facility."
Expansion in Bordentown is constrained by a road, railroad tracks, and residential neighborhoods, Isaf said.
State Sen. Diane Allen (R., Burlington) has said publicly that a member of the Ocean Spray board of directors told her that taxes imposed on utility companies, which she said were passed on to businesses, were partly to blame. Allen supports a move to repeal the taxes, imposed under the Regional Greenhouse Gas Initiative as a way to reduce pollution.
Allen later identified the member as Bill Haines, a cranberry grower, who no longer is on the board. Haines did not return calls for comment.
Assemblyman DiCicco also supports a repeal of the taxes as a way to help "prevent more Ocean Sprays." Pennsylvania has "a leg up" on New Jersey because it does not have such a tax, he said in a statement.
Bordentown residents say they fear Ocean Spray's exit will bring hardship.
Many of the workers who stop by Torp's Deli are "scared and depressed about losing their jobs," said Gerri Heller, a cashier there who lives in town. They're worried about what the loss will mean to the city's budget and downt
Ocean Spray pays about $400,000 a year in property taxes, revenue the small town will struggle without, Lynch said. "We'll also see our sewer and water rates go up," he predicted.