WINSLOW — Johnny’s Selected Seeds will use the extra space it acquired in a purchase of its Winslow fulfillment center to meet added demand for its products, officials said.
Joshua D’errico, the company’s marketing coordinator, said it closed on the purchase of a 81,500-square-foot space on Tuesday, Nov. 26. The structure is located at 955 Benton Ave., a lot that the town of Winslow inherited after its former occupant, Crowe Rope, went bankrupt in 2002.
The date of the property closing reflects a difference in what local officials had originally hoped for.
“We had hoped to close on Tuesday 11/19, but that did not happen,” D’errico wrote in an email. “The commercial real-estate transaction had some unique complexities to it, including dividing the original property into two separate lots and sorting out all of the existing leases between the town and the tenants which would terminate at the time of the transaction.”
In the $1.65 million deal, the seed company acquired its existing office and warehouse space, which is 45,900 square feet, and an additional 35,600 square feet. David Mehlhorn, co-CEO of Johnny’s, said the transaction comes after a period of contemplating expansion.
“Over the last few years, Johnny’s has needed additional warehouse space to better support customers and business growth,” wrote Mehlhorn in an email. “It is critical to our customers that we have our seeds, tools, and supplies in stock and that we ship them out quickly.”
He added that the company started occupying about a third of the newly acquired additional 35,600 square feet about a year ago, but has “no immediate plans for the additional warehouse space.”
Cheryl Boothby, aka the “Queen of Seed Packers,” fills a seed order of beans that requires counting each bean at Johnny’s Selected Seeds’ fulfillment center in Winslow on March 6, 2018. Johnny’s has bought the building housing the fulfillment center from the town of Winslow.
It will lease some of that space to its neighbor, Orion Ropeworks, however.
“Johnny’s and Orion Rope have already been co-tenants in the 35,600 sqft warehouse for over a year and will remain co-tenants,” Mehlhorn noted. “We have a great working relationship with Orion Rope, who will now become a tenant of Johnny’s in the warehouse space.”
Part of the reason Winslow wanted to sell the facility is because it did not want to be responsible for maintenance and capital improvements. After the town paid off $5.1 million of the bond it was left with when Crowe Rope went under, it made a net gain of $192,193 in 2017 and $488,071 in 2018 from leasing the property, according to Heavener.
By comparison, it will collect $30,756 in annual property taxes from Johnny’s and $37,280 in annual property taxes if it sells the remaining part of the building to Orion Ropeworks, as it hopes to do, Heavener added.
Seasonal employees including Lindsay Peter, left, pack seed orders at Johnny’s Selected Seeds fulfillment center in Winslow on March 6, 2018. Johnny’s has bought the building housing the operation from the town of Winslow.
Winslow Town Council Chairman Steve Russell said last week that while the lease money was “good income,” the town never wanted to be a landlord and could spend its money better on more urgent needs like road repairs and fire trucks.
“The building is a bit older and needs some improvements, but we now know that any additional improvements we make will benefit our employee-owners, and will be our own going forward,” responded Mehlhorn, adding that the employee-owned company is excited to build equity in a hard asset.
Winslow is looking to sell the back part of the facility — 112,200 square feet — to Orion for $2.1 million within the coming year. The lease expires in 2022. While Orion’s owner and CEO, Matt Gagnon, said he is interested in such an arrangement, there are several hurdles that it needs to overcome — most importantly, securing financing. The money is contingent on several appraisals and environmental assessments, Gagnon noted.
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