Packaging Company Shuttering 103-Year-Old Chicago Plant
Wisconsin-based Menasha Packaging, a company that produces shipping boxes, displays and packs, is closing its West Side plant and laying off 128 workers, a rare blip for Chicago's robust industrial market.
The 150K SF plant at 4545 West Palmer St. sits on about 3.5 acres just west of Logan Square. The plant closure and corresponding layoffs will take effect on Nov. 10, according to a data entry on the Illinois Worker Adjustment and Retraining Notification Act list.
Menasha Director of Marketing and Communications John Van Driest said the company made the decision to close the plant due to the operational limitations of the building and the cost of its maintenance. The building is over a century old — it was built in 1920, per real estate information aggregator Reonomy.
Renovating the building wasn’t an option because of significant rebuilding costs, Van Driest said.
“The building layout is just not optimized for modern, corrugate manufacturing assets and processes,” he said. “Its current infrastructure, operational limitations, age and structure of the building [are] just not putting us in a spot where it's optimal for modernization.”
Menasha earlier this month announced plans to lay off an additional 143 workers across three other Illinois plants effective Oct. 31, per the WARN list. Those sites have centered on sign manufacturing as well as corrugated and solid fiber box manufacturing, according to Packaging Dive.
The company operates nearly 60 facilities across 17 states and Canada, per its website.
The company’s move to close its Chicago plant is in stark contrast to the general trends in the industrial sector, where companies have largely been gobbling up all the space available to them.
Net absorption improved significantly from the first-quarter mark of 1.4M SF to 4.1M SF, per a JLL Q2 report on the Chicago industrial market. The Q2 industrial vacancy rate went up, but barely, increasing by 19 basis points to 3.05%. The vacancy rate for manufacturing was even lower at 2.1%.
Van Driest said he wasn’t aware of any plans to sell the property.