Cities Sticking Noses in Irwindale’s Chili Odor Case

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Cities Sticking Noses in Irwindale’s Chili Odor Case
Huy Fong Foods’ sriracha chili sauce plant in Irwindale.

Irwindale residents might be having a problem with a hot sauce maker because of the spicy fumes wafting from its huge plant, but other cities are offering to clear the air: They want the popular hot sauce maker to set up shop in their cities, aroma and all.

City officials in Philadelphia and the north Texas city of Denton have written letters inviting Huy Fong Foods Inc. to move or expand production of their sriracha chili sauce to their cities. Philadelphia is even considering a billboard ad near Huy Fong’s corporate headquarters in Rosemead.

Irwindale last month filed a court motion to shut down the plant pending a solution to the odor problem. A judge rejected the motion but another hearing on whether to issue an injunction is set for later this week.

The two sides are at a standoff: Irwindale officials say the hot sauce maker must solve the odor concerns. Huy Fong says it has taken sufficient measures.

As news of the hot sauce standoff spread, councilmen in Philadelphia and Denton pounced, sensing an opportunity to lure the sriracha maker to their own cities – and grabbing some headlines in the process.

“Philadelphians are pretty tough, so forgive me for not understanding why Irwindale city officials would cave into pressure from a few nearby residents who can’t handle the fragrant aroma emanating from your factory there,” Philadelphia Councilman James Kenney said in an Oct. 31 letter to David Tran, Huy Fong’s chief executive. Kenney invited Tran to relocate or expand operations to the “City of Brotherly Love and Sisterly Affection.”

Likewise, Kevin Roden, a councilman in Denton, wrote in an Oct. 30 blog posting: “We’ve got a plan that can save sriracha and everyone who loves it: Move your operations to Denton.” At the time, Roden was running for re-election; he won Nov. 5.

Tran has not responded to the letters. Instead, the company issued a statement earlier this month saying it has taken steps to enhance its filtration system and that it wants to remain in the San Gabriel Valley city.

“Huy Fong Foods is proud to be a member of the Irwindale community,” the statement said.

The company declined to comment for this article.

Irwindale officials last week denied any effort to push out the sriracha maker. They said they want to see the company move all its operations to their city – provided it takes necessary steps to control odors.

“We’re very fond of having Huy Fong Foods in our city,” said Gus Romo, Irwindale’s community development director. But the city needs the company to respond to the most recent complaints.

Spirits were much higher on both sides four years ago when Huy Fong signed a development agreement with Irwindale to build a 650,000-square-foot factory on Azusa Canyon Road.

The city’s redevelopment agency had long been looking to upgrade the vacant 23-acre parcel and had put out a request for proposals.

Huy Fong, meanwhile, was bursting at the seams at its Rosemead facility as demand soared for its suddenly popular sriracha hot sauce. The 30-year-old company was looking for a large site for a factory, with one condition: It had to be within a one-day truck ride from the Kern County fields where the chilis and peppers used in the sauce are grown. The Irwindale site seemed perfect.

Huy Fong had one additional issue: Because of the credit squeeze after the 2008 financial crisis, the company needed money to help with the land purchase and development costs. So the city stepped in and offered a 10-year, $14.9 million loan, with only interest payments due in the first few years and a balloon payment in the final year.

In exchange, the city required Huy Fong to pay $2.5 million as a fee for use of the land, payable in $250,000 installments over 10 years.

Everything went well at first: The $40 million plant was completed two years ago and Huy Fong moved in.

But then, during the 10-week chili harvesting and processing season last year, the first odor reports surfaced; a handful of nearby residents complained of burning or watering eyes, throat irritation and headaches. Irwindale officials met with Huy Fong executives; the company agreed to install filtration devices. It also paid off the city loan with proceeds from a new private loan.

When the next processing season began late this summer, a couple dozen more complaints flowed in. Irwindale once again went to Huy Fong, but this time, the company said it had done all it could and that the odor problems were being exaggerated.

Last month, city officials filed suit, seeking to shut down the plant until the odor was controlled to the satisfaction of nearby residents. On Oct. 30, Superior Court Judge Robert O’Brien denied the shutdown request and set a hearing date of Nov. 22 to consider a motion for preliminary injunction.

Now, Philadelphia might be about to step up its campaign. Chris Goy, a spokesman for Councilman Kenney, said the city’s tourism and marketing agency is considering a billboard ad touting the benefits of Philadelphia near Huy Fong’s Rosemead headquarters.

Roden, the Denton councilman, is happy that he got the company’s attention.

“It doesn’t appear too likely that the company will simply pick up and move,” he said. “But we’re now thinking long term. If they think they will need to expand and have new facilities for distribution into other parts of the United States, we’re now on their radar.”

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Howard Fine
Howard Fine is a 23-year veteran of the Los Angeles Business Journal. He covers stories pertaining to healthcare, biomedicine, energy, engineering, construction, and infrastructure. He has won several awards, including Best Body of Work for a single reporter from the Alliance of Area Business Publishers and Distinguished Journalist of the Year from the Society of Professional Journalists.

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