CSHLRA giving Peach State Kitchen notice to vacate

Published 11:00 am Tuesday, October 22, 2024

For the second time in a little over two years, the Bobby Parham Kitchen on the former Central State Hospital campus finds itself without a tenant. 

The Central State Hospital Local Redevelopment Authority board voted 9-0 last Tuesday to serve Peach State Kitchen, the frozen meal manufacturing company that had been occupying the large cook-chill facility, with a notice to vacate. 

Peach State’s lease payments ceased in early August. 

Atlanta-area businessman Brian Ivy started PSK as a co-packing venture, meaning the business produced meals for brands that either were at-capacity or did not have the capacity to produce them themselves. The business was created specifically to move into Parham Kitchen about two years ago. Production ramped up in early 2023 and around 70 workers were employed at one point. 

Bad news came earlier this year when one of the companies Peach State Kitchen was packing for “substantially” reduced its volume, according to Ivy. 

“They weren’t able to fulfill the commitments that they initially laid out in front of us,” Ivy told the newspaper a few weeks ago. 

Layoffs occurred, though Ivy said employees were “taken care of,” as was not the case when previous Parham Kitchen tenant Food Service Partners suddenly vacated and filed for bankruptcy in summer 2022. Peach State Kitchen’s leaving has been a slower burn.

PSK gave its own notice that it was going to vacate on May 15. As per the month-to-month lease agreement, that began a 60-day clock that was up in July. Ivy last month said he was trying a few more avenues to get business back going and kept the lease current while those attempts were made. 

PSK was extended a little grace once the lease payments stopped rolling in, but following a lengthy executive session to discuss multiple matters at its regular monthly meeting Tuesday, the nine-member CSHLRA board decided it was time for the tenant to go. 

“We have received no lease payments for the months of August or September and are now into October,” CSHLRA chairman Johnny Grant said. “Unfortunately, it is time to close this chapter with PSK. I hope that they are completely out of the building by the end of October.”

Now there is no direct income to support the hefty loan payments on the kitchen. A few years ago before Food Service Partners moved in, the Central State Redevelopment Authority created the Georgia International Food Center LLC and took out a $10 million loan to fund needed improvements to the kitchen. PSK’s lease was covering those note payments, but that’s obviously no longer the case. There’s still over $9.1 million remaining on the loan according to the treasurer’s report given last Tuesday. 

Grant said the GIFC, which is operated by the CSHLRA board, has maintained a “good relationship” with loan holder Byline Bank of Chicago. 

“We continue to work closely with the bank as we work through this current situation, which is evolving over time,” Grant added.

The Central State Hospital Local Redevelopment Authority was created over a decade ago to lessen the sting of the hospital’s closure on the community. A special purpose body was established with the mission to recruit businesses and stimulate investment on the former mental health institution grounds. 

When it comes to economic development and real job creation, the more than 120,000-square-foot Parham Kitchen is one of the more viable buildings around the campus. It’s in much better shape than most every other one surrounding it, though Ivy did say last year the building’s condition — specifically weak flooring in some areas — was a factor in his hesitation in outright purchasing it, which had been the plan when his business first moved in. CSHLRA put the property back on the market for sale last year after PSK declined the option to purchase.