Regions Southwest Virginia

Food City to build corporate headquarters

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Print this page by Heather B. Hayes

Food City’s 325 executive and administrative employees have been housed for years in five buildings in Abingdon. Now, the privately owned grocery chain is moving ahead with plans for a corporate headquarters on the former site of Johnston Memorial Hospital.

The 15-acre site became available when the hospital moved into a new $170 million, 116-bed building in July.

Steve Smith, Food City ‘s president and CEO, offered the old hospital building to the proposed King College School of Medicine & Health Sciences Center.  The college, however, declined.  The medical school instead will be built on 36 acres at Stone Mill Business and Technology Park in Abingdon in a $15 million agreement with the town and Washington County.

As a result, Food City plans to tear down the old hospital and start construction on its headquarters early next spring. The company, which received $3 million in Tobacco Commission funds to purchase the hospital site, has hired the Knoxville-based architecture firm McCarty, Hosaple and McCarty to design the 120,000-square-foot building.

When the building is completed in mid-2013, the company plans to add another 25 administrative employees.

“In the long run, the new building might cost a little bit more than if we’d tried to retrofit the hospital, which was built in phases and has parts of it that date back 100 years,” Smith says. “However, we think this will be a more efficient way to go about it. We’ll have a facility that will be more usable because it meets our exact needs and will be cheaper to operate and maintain. We’ll have room to grow, and it will help us attract talented folks that want to work for our company.”

Food City, which employs more than 13,000 people, has 106 stores in Virginia, Kentucky and Tennessee. The company has continued to expand despite the slow economy.

The retailer, which sells gasoline as well as groceries, last year added five stores. Its revenue totaled more than $2 billion, a 5.25 percent increase from 2009. Smith expects the company’s revenue to grow another 10 percent in 2011.

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