Palermo's to invest $9.5 million in valley plant

The Milwaukee company that makes Palermo's frozen pizzas will invest $9.54 million in its Menomonee Valley production facility.

Palermo Villa Inc.'s project will not result in any new hiring. But it will help the company retain an estimated 92 jobs at its headquarters, 3301 W. Canal St., which has 589 employees. The average annual salary for Palermo’s plant employees is $27,643, and the benefits include medical insurance.

The investment, financed in part with federal New Markets Tax Credits, will help the company remain competitive, according to a report with First-Ring Industrial Redevelopment Enterprise Inc.

The company's 250,000-square-foot pizza manufacturing facility, which opened in 2006, includes a packaging system that has become inefficient compared with competitors using new packaging technology, the report said.

The tax credits financing will allow Palermo's "to increase operational and environmental efficiency, and to improve employee safety and ergonomics," it said.

"It will also enable Palermo’s to maintain a competitive position in the market by allowing the company to perform new packaging services," the report said.

If it didn't make the upgrades, Palermo's would lose market share to other frozen pizza makers that have already improved their packaging lines, according to the report. That would bring job losses by 2019, it said.

The equipment will be installed in stages throughout the next several months, and completed by the end of 2017.

First-Ring Industrial Redevelopment Enterprise Inc., known as FIRE, is providing $9.25 million in tax credits for the Palermo's investment. The U.S. Department of Treasury gives the tax credits to communities, nonprofit development groups and other organizations that then provide them for individual projects.

Companies typically sell the tax credits, with the proceeds used to help finance developments in areas with high unemployment and poverty. The census tract that includes the company's headquarters has a 39.2% poverty rate, according to FIRE.

FIRE provides tax credits within older industrial communities throughout the Milwaukee area.