Its headquarters building has gone on the market for sale or lease, but whether the former Pepsi Bottling Group will pull up stakes in Somers at the end of this year is still undecided, company officials said.
The bottler”™s recent merger with PepsiCo Inc., which paid $7.8 billion to acquire its two largest U.S. bottlers, has made it part of Purchase-based PepsiCo”™s newly formed operating unit, Pepsi Beverages Co.
Pepsi Bottling Group Chairman and CEO Eric J. Foss has been named CEO of the new PBC division, which represents 75 percent of PepsiCo”™s beverage business in North America and includes more than 70,000 employees, about 1,000 of whom work in Somers.
Completed in late February, the merger forced a shift in negotiations for the company”™s landlord in Somers, Murray Hill Properties L.L.C., after a year-and-a-half of talks to keep the bottler in northern Westchester and out of Connecticut, where state officials since 2008 reportedly have offered the company $30 billion in incentives to relocate.
With the bottler”™s headquarters lease due to expire as of Jan. 1, 2011, the company”™s New York City-based landlord recently placed an ad in the Business Journal for the sale or lease of the 540,000-square-foot building at One Pepsi Way, which sits on a 206-acre property. Cushman & Wakefield is exclusive leasing agent for the owner.
“We”™re still negotiating” with the current tenant, Norman Sturner, co-founder and managing member of Murray Hill Properties, said recently from his Manhattan office. With the real estate ad, “I”™m letting the world know that it may become available.
“It”™s been a very long negotiation,” Sturner said. He said negotiations with PBG began two years ago when reports surfaced that the company was being lured across the border by Connecticut officials.
About five months ago, “When PepsiCo bought Pepsi Bottling, it all went up in smoke,” Sturner said of the negotiations. “It”™s been a very long and arduous process.”
After another round of negotiations with Pepsi officials on March 30, Sturner said he had nothing new to report on its progress.
At the Somers headquarters, Pepsi Beverages Co. spokesman Jeff Dahncke said, “We continue to have negotiations with our current property owner, but we haven”™t arrived yet at a final decision.”
Dahncke said PepsiCo officials did not address physical consolidations of operations in the wake of the merger at a two-day investor meeting last month at Yankee Stadium.
Speaking to a Business Council of Westchester breakfast audience March 31 in Tarrytown, U.S. Sen. Charles Schumer said he is working to see that the Pepsi bottler stays in Somers. Schumer two years ago contacted PBG”™s Foss to counter Connecticut”™s reported effort to bring the company there.
Gov. David Paterson”™s budget proposal to levy an excise tax on sugared beverages this year “could chase out jobs” from the state and from Westchester, Schumer warned. “People don”™t like a soda tax. There are some health people that like a soda tax.”
In New York, “We have to look out for our specific companies and do what we can to help them,” Schumer said.
Erin A. Smith, a PepsiCo analyst at Argus Research in Manhattan, said the company has not shared any information on its plans to consolidate physical operations. “I definitely expect that they”™re going to look at their real estate holdings and see whether they want to keep Pepsi Bottling headquarters there” in Somers, she said.
As for PepsiCo”™s corporate headquarters in Purchase, “I think it”™s pretty unlikely that they”™ll move,” Smith said. “They could do some shocking thing, but I think that”™s very unexpected.”
