A Spain-based fish-canning company that had planned to spend $21 million to convert a newly constructed building off Chestnut Road into its U.S. base has had a change of heart after seeing the realities of construction costs.
“Frinsa informed us a few months ago that they have decided not to expand in the U.S. at this time,” Steve Scruggs, president of the Lakeland Economic Development Council, said in an emailed statement to LkldNow. “They cited the significant increase in construction costs to build out the new facility as the primary reason.”
The City Commission in November approved giving Frinsa a $400,000 incentive to help mitigate its impact fees, but LEDC senior vice president Katie Worthington Decker said they had not yet received the funds.
The plant near Kathleen High School would have employed up to 115 people, with an average salary of $54,206. Frinsa officials said they had planned to open in October or November of this year.
“We are very grateful to have helped Frinsa consider Lakeland as a potential manufacturing site,” Lakeland Mayor Bill Mutz said Friday afternoon. “Unfortunately, the inflationary cost shifts during their evaluation period made it an unaffordable alternative, which we totally understand. If in the future it becomes a justifiable option, Lakeland will welcome the opportunity to reengage with them.”
According to CBRE, a global commercial real estate services and investment company, builders saw a 14.1% year-over-year increase in construction costs by year-end 2022, as labor and material costs continued to rise.
CBRE pointed to a number of causes: soaring construction demand, inflation, pandemic-related restrictions, supply chain disruptions, labor shortages and energy price increases related to the war in Ukraine. The company predicted cost stabilization by this year and next.
But labor shortages in Florida’s construction industry are expected to persist for the near term, particularly after the passage of a new state law requiring all private businesses with 25 or more employees to use the federal E-Verify system to confirm that their employees are legally authorized to work in the U.S.
A call to a number listed as Frinsa’s local office reached a recording that said the wireless customer couldn’t be reached.
The Lakeland Economic Development Council began working with Frinsa, a family-owned business, after the company reached out to Enterprise Florida in Tallahassee to find a suitable spot to open a facility in the U.S.
Otis Coracides, who had been named Frinsa’s managing director for the Lakeland operation, said last November when the incentive was approved that Lakeland’s location along Interstate 4, near the Port of Tampa and several airports and rail lines, was a factor in choosing the Swan City, as well as Lakeland’s friendly welcome.
As part of the agreement, Frinsa had promised to invest at least $20 million in capital improvements related to the facility — twice the minimum amount — in order to be eligible for the incentive.
The 180,000-square-foot facility at 900 Chestnut Road — south of Memorial Boulevard and in view of Kathleen High School — was built in the last 18 months, but not yet occupied. The company had planned to transform the building into a canning plant for their lines of tuna, salmon, sardines and chicken.
The company’s brands include Frinsa, Ribeira, The Nice Fisherman and Seaside. Currently in the U.S., Frinsa provides private-label products for Trader Joe’s and others. Company officials said in November that they hoped to create a partnership with Lakeland-based Publix.
It is unclear what the building will be used for in the future.
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