NeilMed Phamaceuticals kicks off Sonoma County expansion as exports of nasal care products grow

NeilMed Phamaceuticals Inc., known for its nose, sinus and ear cleaning products, has started a significant expansion of its Sonoma County production facilities as sales are expanding, particularly outside the country.

Construction started last month on a warehouse next to the company’s complex at 601 Aviation Blvd. near Charles M. Schulz–Sonoma County Airport, and NeilMed intends to seek county approval for a 109,000-square-foot building just to the south of the headquarters. The 59,000-square-foot storage facility on 1.53 acres at 685 Aviation Blvd. is set to be complete by September 2022.

But that’s not fast enough, so the company owners just purchased a 31,000-square-foot Petaluma building at 1415 N. McDowell Blvd., according to Ketan Mehta, M.D., co-founder and CEO. The pending buildings, newly purchased space and the existing 60,000- and 120,000-square-foot spaces by the airport would bring NeilMed’s Sonoma County footprint to 380,000 square feet.

“Nothing was available here,” Mehta said about the purchase of a facility 20 miles south. “This is a ready building.”

Indeed, Sonoma County has a dearth of larger, modern industrial spaces, according to Dave Peterson, a partner of Santa Rosa-based commercial real estate brokerage Keegan & Coppin Co. Inc. He told the Business Journal recently that only a handful of industrial buildings with over 20,000 square feet are available for lease in the county.

Only 4.6% of 25.4 million square feet of Sonoma County industrial space was vacant at the end of the second quarter of this year, according to Santa Rosa-based brokerage Keegan & Coppin. That’s down from the pandemic peak of 5.7% at the end of last year but on par with where vacancy was at before the virus.

That scant availability has triggered a couple sizable new warehouse projects, both of which already have tenants or have active deals. One is Airport Business Center’s 181,000-square-foot warehouse for Amazon at 3843 Brickway Blvd., just south of NeilMed’s forthcoming larger building. Another is Billa Landing, another airport-area project, with 70,000- and 140,000-square-foot buildings set to start construction soon, according to Peterson, who’s part of the marketing team.

NeilMed plans for work to start on outfitting the Petaluma building for manufacturing, Mehta said. Storage and shipping will continue to be centralized in the existing 60,000- and 120,000-square-foot buildings by the airport. The company submitted plans for the new building two years ago, but it’s been challenging to purchase mitigation credits for the California tiger salamander, he said.

And this year, the project to build the two-story concrete tilt-up structure with a metal roof is competing with major Amazon and Walmart projects on the East Coast for structural steel used in trusses.

The company had undisclosed significant sales growth last year and this year, especially in Japan, China, Mexico and elsewhere in Central America, and in South America, Mehta said.

“The biggest challenge is to find manufacturing employees,” he said. The company workforce in Santa Rosa ranges from 275 to 300. So the company is moving in more automated production equipment to handle more throughput with the same staff. Depending on how that venture goes, NeilMed will need more technical staff to program and maintain the equipment.

Current job openings include chief financial and operations officers, a manufacturing operations supervisor, and workers in quality and regulation, and in shipping and logistics.

And there’s also a workforce in Southern California. About nine years ago, the company secured a 35,000-square-foot commercial printing plant in Ontario to label containers and a web press for marketing and point-of-sale materials.

“I got tired of getting quotes from printers and getting different results,” Mehta said. One issue was the thickness of point-of-sale boxes sometimes wasn’t enough to hold up. And availability of printed materials in days instead of weeks or months also was another matter.

The company also secured a 100,000-square-foot warehouse in Southern California because the 2017, 2019 and 2020 North Bay wildfires either threatened or led to production stoppages, Mehta said.

“Because of the fires, we keep a few months of goods in the Ontario warehouse,” he said.

Mehta and NeilMed President Nina Mehta started the company 21 years ago. It became flush with orders in its first decade with mentions by ABC's “Good Morning America,” Dr. Mehmet Oz, Oprah Winfrey and internet sales, according to The Press Democrat.

Since then, the company has grown from selling neti pot kits then plastic squeeze bottles with proprietary sodium sinus rinse formulations to a couple dozen products in four categories: nasal care, ear care, first aid and baby care. Those include ear wax removal kits, aromatherapy, wound cleansing sprays, and applications for cleaning the sites of piercings, an item added in 2014 for professionals.

Pacatte Construction is the general contractor on the 685 Aviation building, and Del Starrett Architect is the designer.

In the Petaluma building purchase transaction, Brian Foster and Steven Leonard of Cushman & Wakefield represented the seller, NSA Investments LLC, an affiliate of Digilock. NeilMed represented itself.

Jeff Quackenbush covers wine, construction and real estate. Before the Business Journal, he wrote for Bay City News Service in San Francisco. He has a degree from Walla Walla University. Reach him at jquackenbush@busjrnl.com or 707-521-4256.