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More About The Deal

Seller: Industrial Carting / Global Materials Recovery Services
Founded: 1953
Employees: 70
Owner: Curtis Michelini Sr. / Charles Hardin Sr.
Service Area: Sonoma County

Buyer: Republic Services
Founded: 1981
Employees: 33,000 (approximately)
Owner: Cascade Investment Group / Publicly traded company
Service Area: 41 U.S. states and Puerto Rico

Republic Services, the national solid waste giant that runs Sonoma County’s landfill, is in the process of acquiring a Santa Rosa garbage contractor and its recycling center in a move that could further shake up the region’s garbage industry.

Industrial Carting, along with its Global Materials Recovery Services recycling operation, both located on Santa Rosa Avenue south of the city, is selling to the Arizona-based company, according to Lee Pierce, a consultant for Industrial Carting, and Leslye Choate, a Sonoma County government official who is handling paperwork related to the deal.

Neither company would elaborate on the acquisition or disclose the terms of the agreement.

“We will have more information in the coming months, or sooner,” said Jennifer Eldridge, Republic Services spokeswoman. “It’s just too soon, too early. The thing’s not quite finished.”

Industrial Carting, which was founded in 1953 and is owned by Curtis Michelini Sr. and Charles Hardin Sr., employs approximately 70 people. Lisa Hardin, Industrial Carting’s business manager, directed all inquiries back to Republic Services.

Pierce, a Santa Rosa City Council member from 2004 to 2008 and Industrial Carting’s former government affairs manager, said the company plans to release a formal statement when the deal closes. Choate, program manager with the county’s environmental health division, confirmed Republic Services has initiated a transfer permit for ownership of the Santa Rosa recycling operation.

The planned acquisition for Republic Services follows the takeover last year by Recology, one of the West Coast’s largest solid waste haulers, of the North Bay’s dominant garbage and recycling company, The Ratto Group. In that deal, Recology, headquartered in San Francisco, secured Ratto’s lucrative hauling contracts with eight of the nine Sonoma County cities and parts of northern Marin County.

The sale of Industrial Carting leaves just two independent garbage companies in Sonoma County, Sonoma Garbage Collectors, which has the hauling contract for the city of Sonoma, and Pacific Sanitation, a debris box and portable restroom firm in Windsor. It reflects a trend of consolidation in the industry, favoring companies including Republic, Recology and Waste Management, the Houston-based company and largest American solid waste firm. It owns Marin County’s landfill north of Novato.

Republic Services, which has operated the Sonoma County-owned Central Landfill west of Cotati since late 2010, is the nation’s second largest waste firm.

Its expansion in Sonoma County could position it for a head-to-head competition with Recology for future hauling business, according to local solid waste experts.

“They’re huge in the hauling scene, so that may be the ultimate thing,” said Patrick Carter, executive director of the Sonoma County Waste Management Agency, which oversees recycling, compost and waste education programs and disposal of household toxics. “You could see Recology versus Republic when the other cities put their contracts out to bid. Maybe that is the end goal. There’s a lot of questions of still out there.”

The implications for customers, including rates for drop-off disposal and curbside pickup, were not immediately clear, industry experts said.

When the county permanently outsourced operation of the Central Landfill to Republic in 2013, the deal included a non-compete clause between Republic and Ratto, which at the time operated four of the county’s five transfer stations and would take over a waste-sorting operation at the dump. The measure was meant to safeguard the locally owned business, a key concern of supervisors at the time in their yearslong deliberation over how to move forward with the landfill after narrowly rejecting its sale in 2009.

Whether the non-compete clause still applies between Republic and Ratto’s successor, Recology, is an open question, Carter said.

“We might see more competition if Republic is not bound by that agreement for franchises,” said Carter.

Industrial Carting handles construction and demolition materials disposal and recycling, in addition to delivery and hauling for rented debris containers. Acquisition of the company and related recycling operation allows Republic to gain a permitted solid waste facility without going through the exhaustive environmental approval process.

Republic Services does not control any hauling routes in the county, but Industrial Carting’s construction debris collection business comes with its own fleet of trucks. The recycling center on Santa Rosa Avenue could also be converted into a transfer station to send materials to the landfill, according to Ken Wells, a longtime local solid waste consultant.

Even if Republic doesn’t pursue that option through a facility permit upgrade, the firm stands to benefit in other ways from the purchase, said Wells, who is chairman of a county recycling task force. For example, he said, the construction debris that can’t be recycled and now goes to the landfill in Novato, could instead be dropped at the Central Landfill, allowing Republic to recoup additional revenue.

“Republic will come out ahead financially,” Wells said. “Most likely what will happen is more trash will come to the Central Landfill. They’ll take it to themselves, and make money both collecting and burying it.”

If Republic does eventually want to get into the curbside hauling business in Sonoma County, he added, the company would benefit from economies of scale after the new acquisition and could compete for contracts held by Recology. The largest of those, for Santa Rosa’s curbside trash and recycling service, is valued at an estimated $735 million over a 15-year term.

Breaking into the market could take a while, though.

In the next two years, only two contracts are set to expire, for Rohnert Park and Healdsburg. Rohnert Park’s current deal includes a measure for a five-year extension to 2025 that its City Council plans to vote on in July, a city spokesman said. Most other cities’ franchise agreements end between 2023 and 2027, while Sonoma County’s deal with Recology ends in 2029 and Santa Rosa’s expires at the end of 2032.

You can reach Staff Writer Kevin Fixler at 707-521-5336 or at kevin.fixler@pressdemocrat.com. On Twitter @kfixler.

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