As striking employees walked picket lines outside the Dolly Madison plant on National Road over the past week, their ranks buzzed with talk that a “white knight” company might show up at the last minute to buy the 53-year-old bakery and save their jobs.
It hasn’t happened.
Instead, owner Hostess Brands filed a motion Friday in U.S. Bankruptcy Court to sell its plants and iconic brands such as Twinkies, ending its run as a giant in the U.S. food industry. The move will eventually put more than 18,000 employees out of work around the country, including more than 200 at the Dolly Madison plant in Columbus.
If the bankruptcy liquidation proceeds as expected over the next few months, Hostess would disappear as a company, although some of its best-known brands might live on with new owners baking them. Local workers had made Dolly Madison products including powdered sugar, cinnamon and chocolate doughnuts and glazed sweet rolls.
Now, the question becomes will any other company or entrepreneur want to use the 11.5-acre National Road plant site for food manufacturing? Or will the property languish unused, creating a commercial black hole near the intersection of Central Avenue and National Road?
Don’t count on the Dolly Madison factory living on as a manufacturing plant, although it may find some other eventual use for offices, homes, apartments or retail shops. That’s what real estate experts and bakery analysts who follow the U.S. food industry said while sizing up the situation.
Mark Pratt, a commercial broker with Breeden Real Estate in Columbus, has one word to describe the aging bakery facility that opened for business around 1960: “obsolete.”
“I’ve watched that site through the years become more crowded as other developments were built, and today it sits in pretty tight confines,” said Pratt an expert appraiser of local commercial property.
Pratt said there’s a slim chance someone — either a Hostess competitor or an entrepreneur — might surface to buy it “for pennies on the dollar,” but the odds are against the factory making any more baked goods.
“It’s not an attractive site for manufacturing. It’s in the middle of a very dense retail area, and I think its highest-and-best use would be some sort of retail, office or other commercial mixed-use,” Pratt said.
The parcel is zoned industrial, and it was appraised each of the past three years for $2.4 million for land and buildings, according to county property records.
Pratt said if a developer acquires the site, the goal should be “for anything new, modern and more efficient – not manufacturing.”
Today, the factory’s neighbors include two car dealerships — Bob Poynter to its immediate east, and Renner Ford-Honda across National Road to the north, as well as several other auto-related businesses: O’Reilly Auto Parts, Sparkle Car Wash, John Staples Custom Pipes & Mufflers, Nichols Body Co. and Midas Muffler. Other neighbors on National Road (U.S. 31) are Fazoli’s restaurant, Sunbelt Rentals and Bradbury’s Pools-Spas. Just south of the 11.5-acre property along 25th Street is FairOaks Mall with its department stores and specialty shops.
Despite the Dolly Madison property’s appraised value, Pratt said he could envision a single acre with frontage on National Road being worth as much as $600,000 or $700,000. Other areas of concern, though, would be any hidden environmental issues and the cost of tearing down the decades-old buildings that exist now before building something new.
He speculated that the property, when redeveloped, could be easily worth more than the $2.4 million assessed rate.
Jeff Bergman, planning director for the City of Columbus-Bartholomew County Planning Department, said wiping away the existing structures would cost a lot of money, “and that will be a burden on any really large-scale redevelopment activity.”
If some new buyer takes a risk, though, “as big a site as it is, it could potentially hold multi-family residential or mixed-used office and retail,” Bergman said.
A government planning study that took a look at the broader Central Avenue corridor last year, and a resulting 33-page report, touched a little bit on the Dolly Madison property, Bergman said. Its conclusion was the area would be best for regional retail or commercial uses.
“Conceivably, if some amount of time passed and the market did not seem to be taking care of that property itself, the city could take a more focused look,” Bergman said, even offering tax incentives or acquiring the site itself, tearing buildings down and re-marketing it.
Mayor Kristen Brown declined to be interviewed on the Dolly Madison situation Friday. Also, Jason Hester, executive director of the Columbus Economic Development agency, was out of the office Friday and did not return phone calls.
Hostess issued a prepared statement that morning, announcing that it intended to sell all of its assets in bankruptcy court, and “we anticipate ... a lot of interest in our brands, but do not have a specific time frame for the sale of those brands.”
Its brand products include Twinkies, Ding Dongs, Ho Ho’s, Donettes, Wonder Bread, Nature’s Pride bread, and Dolly Madison cakes, among others.
Richard Siemer, president of Siemer Milling Co., in Teutopolis, Ill., said his flour-producing firm was a supplier to Hostess. He thinks Twinkies and Ding Dongs are among Hostess brands with value that are likely to sell to someone as the long-running bankruptcy progresses.
But he doubts whether Wonder Bread, another Hostess mainstay, will attract a buyer.
“I do hope, of course, that the iconic brands like Hostess Twinkies live on,” Siemer said Friday, “but while Wonder Bread was wonderful in the 1950s, today it’s just another white bread sandwich product.”
Some critics scoff at Twinkies as an unhealthy snack food, he said, “but people keep eating them regardless, maybe even more because it’s a guilty pleasure.”
As a life-long resident of Columbus, local stock analyst Craig Kessler of Kessler Investment Group said it’s troubling to see the city’s connection to the U.S. baking and confectionery industry diminished.
Columbus’ connection actually dates to 1948 when Sap Essex opened a bakery at Fifth and Washington streets. The bakery grew and the company built the plant now owned by Hostess on National Road a half century ago.
In its heyday, employment hit 580 in 1986, making it the seventh-largest employer in Columbus. But at the end, nearly two-thirds of those jobs had disappeared.
Kessler said high labor costs kept a “white knight” from stepping up earlier and buying any of Hostess’ properties. He agreed with Pratt that the Columbus plant is too old to attract a buyer, although Hostess’ top brands and some of its bakery equipment might sell to competitors.
“I have sympathy for those on strike,” Kessler said. “But the reality of the situation was, any smart business person was going to wait for Hostess’ demise before swooping in and paying pennies on the dollar” for equipment and its brand-name products.
Josh Sosland, editor of Milling & Baking News, a trade publication, said a few of Hostess’ newer manufacturing plants may sell to other food companies. Sosland said that would include Hostess plants in Henderson, Nev.; Biddeford, Maine; and Lenexa, Kan.
But on the picket line Saturday, members of the Local 132 bakers union held out hope for a miracle, however slim its chances may be.
Greg Gassaway and Mark Owens maintained their positions on the picket line a day after the 52-year-old factory was closed, along with five others strikers just before noon. They expect to be there, staying in shifts around the clock, for at least a few more days.
Owen said strikers have been told that the Bakery, Confectionery, Tobacco Workers and Grain Millers International union expects there will be word Monday whether the bankruptcy court will allow Hostess to proceed with its liquidation plans.
“It might possibly be Tuesday until they lock the doors,” Owen, a 46-year-old worker from Columbus, said. Owen said he and others will stay in position until the court ruling.
He’s been working at the Dolly Madison bakery since the age of 18. If it doesn’t work out, what will he do next?
Owens shrugged his shoulders and said, “One door closes, another door opens.”
But in the event that the next door doesn’t open right away, Owen filed for unemployment benefits Friday night.
Gassaway, who is 50 and also lives in Columbus, is a 30-year plant employee who continues to hold out hope. He has yet to file for unemployment benefits.
“If they open up the bakery, I hope to go back to work. Maybe we’ll get hired in. That’s the chance we’re taking,” Gassaway said.
“I’ve never drawn unemployment and my life. I hope I don’t have to.”
As the picketers were talking among each other, occasionally checking the large, donated pot of chicken-and-rice stew that was cooking above a wood-burner, a middle-aged woman in a van pulled up alongside them.
Getting out of the vehicle, she said she was desperate to get to Seymour to visit her father, but her gas tank was near empty and she had no cash to speak of. Unaware that the people gathered there were all without jobs, she asked if any of them had an extra dollar they could spare.
Gassaway, without the promise of a paycheck anytime soon, reached into his wallet and handed her one.
It wasn’t the “white knight” he was hoping for. Maybe in the next car.