Boeing's new MROTC in Oklahoma City, Okla.

By a close 5-3 vote, the city council of Topeka, Kan., approved job-creation incentives and a 10-year tax break for a proposed $40-million expansion of Frito-Lay’s plant in the city. Designed to accommodate the company’s whole grain product line, the expansion will include a $10-million investment in a new 75,000-sq.-ft. addition, and could create up to 70 new jobs.

Mark Long

First Industrial Realty Trust, Inc. and the California State Teachers’ Retirement System (CalSTRS) on Dec. 20 announced they had expanded the investment capacity of their Development/Repositioning joint venture (FirstCal 1) from $950 million to $1.6 billion. CalSTRS has made an additional $200 million equity commitment and First Industrial has increased its equity commitment by $22 million. This represents a 90 percent and 10 percent equity interest for CalSTRS and First Industrial, respectively, consistent with the previous structure. The projected capitalization remains 35 percent equity and 65 percent debt. Additionally, the term of the venture has been lengthened by one year and will now extend to July 2011. Since its inception through September 30, 2006, the venture has acquired or has under construction nearly 8 million sq. ft., of which 2.4 million sq. ft. has been recycled. At the end of third quarter 2006, the fund had $440 million of gross real estate investments and $96 million under construction. First Industrial receives fees for property management, leasing, development, dispositions and portfolio management administration, and has the opportunity to earn performance-based incentive fees. "Our continued expansion of our private capital base has been an important driver of our earnings growth," said Mike Havala, CFO of First Industrial. "Since March 2005, First Industrial has grown its total private capital by nearly $4.5 billion to serve a wide spectrum of corporate real estate needs from acquisitions to (re)development to sale-leaseback transactions." CB Richard Ellis Investors is the advisor to CalSTRS on the venture.

Pepsi has 525 warehouses and distribution facilities around the world, and is about to have 526, thanks to a forthcoming build-to-suit from Russo Development in Kearny, N.J.. The 135,000-sq.-ft. facility for Pepsi Bottling Group will open in early 2008 and will serve the New Jersey market.

One hundred and seven years ago, Weyerhaeuser founder Frederick Weyerhaeuser and 11 investors paid $6 million for 900,000 acres in the Pacific Northwest being sold by James J. Hill and the Great Northern Railroad. Today, a $4-billion tax penalty on that land, in addition to conversion charges, is one obstacle preventing the company from converting to a real estate investment trust. The REIT request was made in mid-December by major shareholder Franklin Mutual Advisers LLC, which now holds 18 million shares after having just purchased another million shares, in order to make the company more tax-efficient. According to Dow Jones Newswires, "Weyerhaeuser has been pushing for federal legislation that would make operating its 5.7 million acres of North American timberland more tax efficient." That legislation has not yet come to pass, and Weyerhaeuser Chairman and CEO Steve Rogel recently has written of "revising alternatives." As Dow Jones reports, "REIT conversions have become popular among forest products company shareholders because when timberlands are tied to industrial operations, companies pay regular corporate rates on timberland earnings, typically about 35 percent. "Under REIT structure, companies typically pay 15-percent tax but are required to pass through most profits to shareholders."

Weyerhaeuser, Coca-Cola and Nike were just a few of the 26 IAMC corporate member companies mentioned as Blue-Ribbon Companies in a compilation of which companies were on the most Fortune, Business 2.0 and FSB lists — including the FORTUNE 500, Fastest-Growing and Best Companies to Work For — in 2006. Check out the full list.

Rick Leighton