http://www.signonsandiego.com/news/northcounty/20031211-9999_1n11ecke.html
Ecke Ranch plans to sell most of its remaining land
By Mike Freeman and David E. Graham
UNION-TRIBUNE STAFF WRITERS
December 11, 2003
NADIA BOROWSKI SCOTT / Union-Tribune
The Paul Ecke Ranch, which pioneered the world's poinsettia business, has proposed selling more than half of its remaining land in Encinitas to raise money for more efficient greenhouses needed to compete in the cutthroat potted plant business.
The Paul Ecke Ranch, which pioneered the world's poinsettia business, has proposed selling more than half of its remaining land in Encinitas to raise money for more efficient greenhouses needed to compete in the cutthroat potted plant business.
The property would be developed.
It's a plan that likely will become a lightning rod in Encinitas, as opponents try to preserve a vestige of the city's rich agricultural heritage even though plant production has become increasingly expensive in Southern California.
"It's sad. It's very sad," said Joan Jackson, a board member with the League for Coastal Protection. "This will certainly impact the quality of life, depending on what they build."
Ecke Ranch, which moved to Encinitas in 1923, is synonymous with poinsettias and is largely credited with popularizing the colorful holiday flower.
Today, poinsettias rank near the top of all potted plant varieties produced in the United States, with wholesale sales expected to reach $252 million this year, the U.S. Department of Agriculture says.
Although Ecke Ranch remains an industry heavyweight – more than 70 percent of the poinsettias grown in North America originate from its plant stock – the operation faces increasing pressure from several competitors who have entered the poinsettia business in recent years.
Moreover, the rise of big discount retailers in the plant business is forcing growers to squeeze out costs, which limits the prices Ecke Ranch can charge for its cuttings – the tiny starter plants it sells to growers to cultivate.
"If we can't produce our rooted cuttings for the right price, we're not going to be here in three years," said Paul Ecke III, the third generation of the Ecke family to head the business.
Ecke realizes that the proposal to develop much of the remaining ranch site might generate a backlash.
In the mid-'90s, the city and Ecke Ranch negotiated a deal that allowed the development of 850 acres of ranch property, with supporters claiming at the time that the move was needed to save the ranch.
That's why, as part of this new proposal, Ecke has pledged that if the ranch stops using the remaining 20 acres for agriculture, it would be handed over to the city.
"This is the big idea that we hope carries the project forward," he said. "It's a huge deal. We wouldn't be doing that" otherwise.
The new proposal is complex and has a long way go before it's approved. For starters, Ecke Ranch must hack through a tricky land-use thicket to allow homes on land designated for agriculture. The lengthy process means that homes likely wouldn't be built until 2007.
Also, the previous development proposal by Ecke Ranch stirred up simmering anti-growth fervor in Encinitas. That project, which included a shopping mall, homes and a golf course, was the subject of nearly 70 public hearings and helped spawn an anti-growth ballot measure, which failed.
This time around, the scale is smaller.
Ecke Ranch switched from growing poinsettias outdoors to greenhouse production in the 1950s, concentrating its operation on a core parcel of about 70 acres along Saxony Road. The plan now is to reduce the core operation to 20 acres, selling off or trading the rest of the property.
According to Ecke Ranch executives, developing the land is necessary to pay for new, efficient greenhouses to compete in today's marketplace. The newest of Ecke's current greenhouses is nearly 20 years old, Paul Ecke said. Some date to the 1950s.
Ecke added that more than $1 million a year has been invested in the property for the past decade, but that it hasn't been enough.
"What we need to do is something dramatic to recapitalize our business so we don't end up like the Pennsylvania steel mills," Ecke said. "We don't want subsidies. We want to compete."
Privately held Ecke Ranch won't reveal sales figures, though executives say the operation is profitable.
But it took a hit in 2001, when moves aimed at hitting high-growth sales targets backfired. Instead of selling nearly 90 million cuttings that year as forecast, Ecke Ranch sold only 50 million.
Since then, the company has cut employees from about 400 during the peak season to about 300. It also reduced the number of greenhouses it uses. Much of its cuttings are now grown in Guatemala, where the company shifted work for both poinsettias and its spring bedding plants sold under the Flower Fields brand name.
As a result, much of the ranch property in Encinitas is not used for growing plants. One section with a nice ocean view is a compost pile. Another stores various pieces of obsolete equipment.
Building 500,000-square-foot greenhouses that are state-of-the-art would allow Ecke Ranch to offer its customers lower costs for its rooted cuttings – those with roots already started. The proceeds also would fund further investment in research to introduce plant varieties that command higher prices.
"The land is an asset," said Chris Calkins, president of Paul Ecke Ranch. "It's the one thing we can use to generate capital. We don't have the luxury of sitting on it."
Since Home Depot, Wal-Mart and other discount stores have entered the potted plant business, volume growers have been striving to wring costs out of their operations, said Deena Altman, co-owner of Altman Plants in Vista. Even a penny or two of savings per cutting makes a big difference.
"You can't simply grow a good plant and be in this market now," she said. "You have to grow them efficiently and very cost effectively."
Poinsettias, the Ecke specialty, have been hit particularly hard by the discount retailers. A recent study commissioned by the Society of American Florists shows 65 percent of all poinsettia sales now occur at mass market stores, such as Home Depot and Wal-Mart.
Many of these chain stores price poinsettias so low as to be unprofitable in the hopes of luring customers into stores.
Marvin Miller of Ball Horticultural in Chicago, said Lowe's stores in Illinois are selling 6-inch poinsettias at $1.66 each. "The average grower probably needs $4 to make money," he said. "Even the large growers probably need $2.50."
For now, Ecke Ranch has proposed two memorandums of understanding with the city. The first would pave the way for a land swap.
City-owned property near Quail Gardens Road, which had been earmarked for the city public works center, would be traded for Ecke land along Saxony Road. The public works center would be located on the Saxony Road parcel.
The second memorandum calls for a 2-acre park and 38 acres of residential zoned land with an anticipated 201 dwellings.
Jackson, of the Coastal Protection League, she fears that development on the lands would mean more traffic, air pollution and pressure to develop other adjacent lands.
"I think it's going to mean some real choices for the community," Jackson said.
Ecke Ranch plans to sell most of its remaining land
By Mike Freeman and David E. Graham
UNION-TRIBUNE STAFF WRITERS
December 11, 2003
NADIA BOROWSKI SCOTT / Union-Tribune
The Paul Ecke Ranch, which pioneered the world's poinsettia business, has proposed selling more than half of its remaining land in Encinitas to raise money for more efficient greenhouses needed to compete in the cutthroat potted plant business.
The Paul Ecke Ranch, which pioneered the world's poinsettia business, has proposed selling more than half of its remaining land in Encinitas to raise money for more efficient greenhouses needed to compete in the cutthroat potted plant business.
The property would be developed.
It's a plan that likely will become a lightning rod in Encinitas, as opponents try to preserve a vestige of the city's rich agricultural heritage even though plant production has become increasingly expensive in Southern California.
"It's sad. It's very sad," said Joan Jackson, a board member with the League for Coastal Protection. "This will certainly impact the quality of life, depending on what they build."
Ecke Ranch, which moved to Encinitas in 1923, is synonymous with poinsettias and is largely credited with popularizing the colorful holiday flower.
Today, poinsettias rank near the top of all potted plant varieties produced in the United States, with wholesale sales expected to reach $252 million this year, the U.S. Department of Agriculture says.
Although Ecke Ranch remains an industry heavyweight – more than 70 percent of the poinsettias grown in North America originate from its plant stock – the operation faces increasing pressure from several competitors who have entered the poinsettia business in recent years.
Moreover, the rise of big discount retailers in the plant business is forcing growers to squeeze out costs, which limits the prices Ecke Ranch can charge for its cuttings – the tiny starter plants it sells to growers to cultivate.
"If we can't produce our rooted cuttings for the right price, we're not going to be here in three years," said Paul Ecke III, the third generation of the Ecke family to head the business.
Ecke realizes that the proposal to develop much of the remaining ranch site might generate a backlash.
In the mid-'90s, the city and Ecke Ranch negotiated a deal that allowed the development of 850 acres of ranch property, with supporters claiming at the time that the move was needed to save the ranch.
That's why, as part of this new proposal, Ecke has pledged that if the ranch stops using the remaining 20 acres for agriculture, it would be handed over to the city.
"This is the big idea that we hope carries the project forward," he said. "It's a huge deal. We wouldn't be doing that" otherwise.
The new proposal is complex and has a long way go before it's approved. For starters, Ecke Ranch must hack through a tricky land-use thicket to allow homes on land designated for agriculture. The lengthy process means that homes likely wouldn't be built until 2007.
Also, the previous development proposal by Ecke Ranch stirred up simmering anti-growth fervor in Encinitas. That project, which included a shopping mall, homes and a golf course, was the subject of nearly 70 public hearings and helped spawn an anti-growth ballot measure, which failed.
This time around, the scale is smaller.
Ecke Ranch switched from growing poinsettias outdoors to greenhouse production in the 1950s, concentrating its operation on a core parcel of about 70 acres along Saxony Road. The plan now is to reduce the core operation to 20 acres, selling off or trading the rest of the property.
According to Ecke Ranch executives, developing the land is necessary to pay for new, efficient greenhouses to compete in today's marketplace. The newest of Ecke's current greenhouses is nearly 20 years old, Paul Ecke said. Some date to the 1950s.
Ecke added that more than $1 million a year has been invested in the property for the past decade, but that it hasn't been enough.
"What we need to do is something dramatic to recapitalize our business so we don't end up like the Pennsylvania steel mills," Ecke said. "We don't want subsidies. We want to compete."
Privately held Ecke Ranch won't reveal sales figures, though executives say the operation is profitable.
But it took a hit in 2001, when moves aimed at hitting high-growth sales targets backfired. Instead of selling nearly 90 million cuttings that year as forecast, Ecke Ranch sold only 50 million.
Since then, the company has cut employees from about 400 during the peak season to about 300. It also reduced the number of greenhouses it uses. Much of its cuttings are now grown in Guatemala, where the company shifted work for both poinsettias and its spring bedding plants sold under the Flower Fields brand name.
As a result, much of the ranch property in Encinitas is not used for growing plants. One section with a nice ocean view is a compost pile. Another stores various pieces of obsolete equipment.
Building 500,000-square-foot greenhouses that are state-of-the-art would allow Ecke Ranch to offer its customers lower costs for its rooted cuttings – those with roots already started. The proceeds also would fund further investment in research to introduce plant varieties that command higher prices.
"The land is an asset," said Chris Calkins, president of Paul Ecke Ranch. "It's the one thing we can use to generate capital. We don't have the luxury of sitting on it."
Since Home Depot, Wal-Mart and other discount stores have entered the potted plant business, volume growers have been striving to wring costs out of their operations, said Deena Altman, co-owner of Altman Plants in Vista. Even a penny or two of savings per cutting makes a big difference.
"You can't simply grow a good plant and be in this market now," she said. "You have to grow them efficiently and very cost effectively."
Poinsettias, the Ecke specialty, have been hit particularly hard by the discount retailers. A recent study commissioned by the Society of American Florists shows 65 percent of all poinsettia sales now occur at mass market stores, such as Home Depot and Wal-Mart.
Many of these chain stores price poinsettias so low as to be unprofitable in the hopes of luring customers into stores.
Marvin Miller of Ball Horticultural in Chicago, said Lowe's stores in Illinois are selling 6-inch poinsettias at $1.66 each. "The average grower probably needs $4 to make money," he said. "Even the large growers probably need $2.50."
For now, Ecke Ranch has proposed two memorandums of understanding with the city. The first would pave the way for a land swap.
City-owned property near Quail Gardens Road, which had been earmarked for the city public works center, would be traded for Ecke land along Saxony Road. The public works center would be located on the Saxony Road parcel.
The second memorandum calls for a 2-acre park and 38 acres of residential zoned land with an anticipated 201 dwellings.
Jackson, of the Coastal Protection League, she fears that development on the lands would mean more traffic, air pollution and pressure to develop other adjacent lands.
"I think it's going to mean some real choices for the community," Jackson said.