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City courts embattled sriracha producer

By Jenni Spinner+

25-Apr-2014

Oroville, a city in northern California, is enticing embattled sriracha maker Huy Fong Foods to relocate to its sunny clime.
Oroville, a city in northern California, is enticing embattled sriracha maker Huy Fong Foods to relocate to its sunny clime.

Labeled a “public nuisance” by the California plant currently hosting its hot sauce plant, Huy Fong Foods is being enticed to move to another California city with tax incentives, low water rates, and plentiful skilled labor.

The city of Irwindale, California, filed suit against Huy Fong Foods in October, claiming fumes from the plant (which processes hot peppers for its signature spicy sriracha sauce) were irritating the eyes and lungs of its citizens. If plant operators do not remedy the situation to the satisfaction of Irwindale officials, the facility will be shut down, and Huy Fong Foods likely will find another home for sriracha production.

Economic encouragement

Enter the Orovile Economic Alliance (OEA), a coalition of business leaders and local agencies (public and private) promoting economic development in Oroville and all of Butte County. The group aids businesses looking to expand or relocate within the state by offering assistance on site selection, permit streamlining, regulatory support, matchmaking with state and local incentives, and more.

Michael Glaze, OEA director, told FoodProductionDaily Huy Fong Foods would be smart to keep their California production within the state and relocate to their city.     

“Oroville is California’s business oasis; we have a lot of land, prime agriculture, a ready labor forc, and the cheapest water in the nation,” he said. “It’s an ideal location for water-reliant businesses like sriracha—it’s a perfect match.”

Local resources

Oroville, situated in northern California, has a population around 15,000 people, and a total of 55,000 people live in the greater Oroville area. It stretches out across nearly 7,500 acres, with around 2,500 acres available for industrial land use.

In addition to the water and labor advantages, Glaze said, Huy Fong Foods likely would enjoy a pile of financial incentives with a move to Oroville. Pacific Gas and Energy offers a 30% electricity rate reduction for companies new to the area for five years after moving there. Potential tax incentives include manufacturing sales and use tax exemptions, new employment tax credits, another credit for California businesses that remain within the state, and funds for manufacturing workforce training.

Additionally, Glaze said, Huy Fong Foods could enjoy permit streamlining and review, free job training assistance, recruitment help, US Department of Agriculture (USDA) business and industry loan guarantees, and working capital and equipment financing.

Sustainability assistance

Another possible incentive is the Property Assessed Clean Energy (PACE) program, through Figtree Financing, Glaze said.

If a company is interested in locating in an existing building, they may be interested in taking advantage of the Figtree PACE program available within the City of Oroville and unincorporated areas of Butte County,” he said. “The program will assist with the cost of energy and water efficiency improvements and energy generation improvements."

Further, Huy Fong Foods could further bolster its training program through the OEA’s educational partnerships. Educational institutions currently joining forces with the group include California State University at Chico, and Butte Community College.

However, Oroville isn't the only locale hoping to lure the sriracha plant. Officials in Denton, Texas, expressed interest in hosting the Huy Fong Foods plant in their municipality.

A number of food processing operations already call the Oroville area home. Ehmann Olive produces a variety of olive products, Pacific Coast Producers offers various canned fruits, Mooney Farms produces and packages sun-dried tomato items, Lundberg Family Farms grows and packages rice, and Sierra Nevada Brewery bottles its craft beers there.

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