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North Bay Business Journal

Monday, June 30, 2014, 7:00 am

Labcon plans expansion, tech hub

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    Stero building - 3200 Lakeville Hwy - Petaluma

    The purchase of the former Stero Dishwashing Machine building in south Petaluma would help Labcon North America expand production, bring in services and products needed by local manufacturers and provide a home for former Stero employees. (credit: Cassidy Turley)

    PETALUMA — One of Petaluma’s larger manufacturers plans to expand manufacturing by shifting distribution to the former Stero dishwasher plant on Lakeville Highway, at the same time preparing to bring into that facility service providers needed for local high-technology production and providing a home for former Stero employees.

    Labcon North AmericaJim Happ, president of 220-employee laboratory supplies maker Labcon North America, is leading an effort to buy the 9.78-acre property at 3200 Lakeville Hwy. in Petaluma’s southern industrial area from an affiliate of Illinois Tool Works, which acquired Stero in 1999 and closed the Petaluma plant 15 months ago. The sale, which includes a 63,000-square-foot production building and 8,000-square-foot adjacent warehouse, is set to close June 30 at a price of $6.6 million.

    The plan is to use two-thirds of the space for Labcon and a few companies based outside the area that provide services and products Labcon and other local technology companies need for manufacturing, Mr. Happ said. Leases with those suppliers are being finalized, he said.

    Labcon would move distribution warehousing from its 127,000-square-foot plant at 3700 Lakeville two doors west to 30,000 to 40,000 square feet of the Stero building, Mr. Happ said. Labcon then would expand production at its plant, likely hiring 20 to 30 for assembly, quality-control, testing, distribution and tool-making over the next two years.

    “We use our building for manufacturing and distribution, and it’s really tight to have all that in one place,” he said. “The growth of our overall business requires more space for production.”

    Work on the building to upgrade the property with more electrical power and water likely will put the timeframe for the expansion in January 2016, Mr. Happ said.

    In the other part of the Stero space, PRS Stainless Fabrication and its 15 employees would continue to make parts for commercial dishwashers by Stero and other companies in about 20,000 square feet.

    Local tax accountant Doug Pickford, Stero production chief Larry Ronsheimer and Richard Sharke, a stainless-steel wine tank builder in Nevada, started the company in early 2013, after Illinois Tool Works shut down the Petaluma plant that February.

    “Stero decided to move operations back East but wanted to outsource the parts,” Mr. Pickford said. “We’re one of their customers.”

    Stero started in San Francisco in 1945 and moved to Petaluma in 1974. The company had 15 employees at the time of the shutdown.

    Building on Mr. Sharke’s experience with Silver State Stainless in Carson City, Nev., PRS is considering expanded markets such as wine industry fluids circulation and delivery systems, Mr. Pickford said.

    Labcon’s plan for a small manufacturing and support services hub on the Stero property is similar to a larger effort that Sonoma County BEST and manufacturing trade group 101MFG are collaborating on to identify North Bay companies that need and make components made locally, according to Carolyn Stark, executive director of Sonoma County BEST, an economic activity booster group.

    “It’s a great example of the collegiality among the manufacturing groups we have in the North Bay,” Ms. Stark said. “If we can recapture any purchasing dollars that are going outside Sonoma County or California that would be beneficial.”

    Ingrid Alverde, city of Petaluma economic development manager, has been working with Labcon on this expansion for a while.

    “It’s exciting that not only will Labcon be able to expand their operations and support other local businesses and other industrial businesses, but (also) they will have the opportunity to incubate some others,” Ms. Alverde said.

    Labcon started as Ways and Means in Marin County in 1959 and moved to Petaluma in 2003. In 2011, Beaumont, Texas-based Helena Laboratories purchased the 127,000-square-foot building for its subsidiary.

    Steven Leonard, Brian Foster and Trevor Buck of Cassidy Turley are representing the Stero building seller. Mr. Buck also is representing the buyer.

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