Lease signed for Parham Kitchen; possible new buyer interested

Published 11:50 am Sunday, October 29, 2023

Peach State Kitchen, the company that has produced frozen packaged meals out of the Bobby Parham Kitchen at the former Central State Hospital campus since January, has signed a month-to-month lease with the Central State Hospital Local Redevelopment Authority (CSHLRA).

The base lease payment is $65,000 per month, and either party interested in terminating the lease must give 60 days notice, according to CSHLRA Chairman Johnny Grant.

CSHLRA and Peach State Kitchen had been working towards a sale of the 120,000-square foot facility that was once the largest cook-chill kitchen in the country. Peach State CEO Brian Ivy in August said that the building needed too much work for his startup company to consider the purchase, citing issues with the flooring in the older portion of the space.

The two sides then had discussions toward a yearlong lease, but that was nixed as well when CSHLRA asked for a significant amount of cash up front.

“If we were going to tie the building up for a year or more, we felt like we needed some assurance that that agreement would be fulfilled and that we would not have the lease terminated in a short period of time,” Grant said.

CSHLRA, the body tasked with revitalizing the former CSH campus, has been bitten before when previous Parham Kitchen tenant Food Service Partners filed for bankruptcy and vacated the building suddenly in July 2022. Through its LLC called the Georgia International Food Center, CSHLRA had previously taken out a loan to pay for facility improvements and equipment purchases before Food Service Partners came on the scene. Food Service Partners’ exit then left the Authority footing the bill for loan payments around half a year until Peach State Kitchen moved in the first month of 2023.

Despite the new month-to-month status, Ivy told the newspaper last week he has no plans of moving his company from the Parham Kitchen any time soon.

“I’d like to see myself there for the next two years, at minimum,” the Peach State Kitchen CEO said. “Johnny’s been an advocate for us, we just didn’t have $180,000 to put up as a reserve for them. Johnny, Brian Robinson, and Bill Jones have led us to this point. I feel like it’s the best thing we can do in the situation that both parties are in.”

There’s another wrinkle. Once Peach State Kitchen declined the option to purchase, CSHLRA relisted the Parham Kitchen property for sale. Grant recently characterized the interest since relisting as “robust,” and the board in a called meeting last Tuesday adopted a resolution pertaining to the property.

“We passed a resolution that approved a non-binding letter of intent with a group to allow them to develop a contract and work out some of their financing for purchase of the kitchen building,” Grant said.

The resolution identifies the interested party as Chop Snacks, LLC. Little could be found about the company online through a quick search.

The letter of intent gives Chop Snacks the green light to talk with Byline Bank, holder of the loan over the Parham Kitchen, about financing terms to possibly assume the loan.

“All of the rest of the details are still in negotiation phase,” Grant added. “They may not come up with a contract. They may decide not to do it. This letter of intent focuses our efforts on this one party until the letter of intent is no good or if they do not move forward with a contract.”

Should a deal get worked out, Peach State Kitchen and its 70 or so employees would be at the mercy of the new owner.