Keystone Foods plants
Keystone Foods’ announcement that it is opening a new location in Fairfield has created a dilemma for officials from the local to state level.
Keystone, which has a Springfield-area operation M & M Restaurant Supply on Gateway Boulevard, prints paper products for national restaurant chains McDonald’s and Chipotle.
The company is seeking to move its work for 510 McDonald’s restaurants from Springfield to the Fairfield location, keeping its work for 88 Chipotle restaurants in the area. Spokeswoman Maureen Garrity said the impact to workers in Springfield is unclear, but the company hopes to find new opportunities for the Springfield location and keep all 205 workers employed. The new location will open the first quarter of 2011, she said.
The Ohio Department of Development had announced it would award Keystone a job creation tax incentive package for creating 239 new, full-time positions it has promised Fairfield. But the DOD is now questioning whether Keystone is creating new jobs or just relocating work from one Ohio city to another.
The expansion would be good news for Keystone, which has acquired additional McDonald’s contracts in Louisville and Lexington. That creates more opportunities for both locations to expand, Garrity said, which would be good news for the state.
State Rep. Ross McGregor, R-Springfield, has participated in a state review of the deal to see that a state tax credit that is supposed to create jobs is not used to move them from one city to another.
Keystone is a viable employer in Ohio and the state wants it to grow here, McGregor said.
The project was presented as a new project, said Ohio Department of Development spokeswoman Bethany McCorkle. With the news that work will be shifted from Springfield, “we’re doing our due diligence for the situation.”
That “due diligence” involved a conference call with the company Friday morning. DOD officials informed Keystone that it has to be more specific about backfilling the jobs in Springfield in order to live up to the requirements for a job creation tax credit.
As a private business, Keystone has the right to move its workforce however it sees fit, McGregor said. But if it’s expecting job creation credits, it has to meet the requirements.
“If they can’t, then it’s considered a relocation according to the letter of the law,” McGregor said.
Springfield officials didn’t learn about the Fairfield agreement until after the fact, said Economic Development Administrator Tom Franzen. That prompted him to begin looking into whether proper procedures were followed.
David Zak, Greater Springfield Chamber of Commerce economic development director, said the city and chamber had reached out to M & M on a regular basis to see if there were any expansion plans in the future.
“We said ‘we would love any opportunity to put an incentive package together,’” he said. Company officials did not indicate the company planned to expand.
Employees have been informed they may apply for jobs at the new distribution center, Garrity said, “but since we anticipate full employment in Springfield, they would not be transferred and expected to work more than 60 miles from their current home.”
Keystone Foods negotiated a new contract with Teamster Local 957 last spring “in good faith and without any interruption,” Garrity said. “We intend to continue to honor that contract.”
Food service is the second fastest-growing industry in Springfield, according to data collected by the Greater Springfield Chamber of Commerce.
Contact this reporter at (937) 328-0347 or kmori@coxohio.com.
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