SAN FRANCISCO — Construction of a modern 82,000-square-foot produce warehouse and distribution facility at one end of the San Francisco Wholesale Produce Market should be completed early this fall.

The expansion is part of a much larger long-term “reinvestment” plan that was solidified when the city of San Francisco, which owns the land on which the market sits, signed a 60-year lease with the market last September, said Michael Janis, market general manager.

Future construction and expansion will be guided by the market’s board of directors comprising merchants and dedicated community volunteers, he said.

At the same time, merchants within the market are growing, either moving into larger spaces or expanding into adjacent stalls.

“There’s a real air of excitement on the market,” said Scott Salisbury, who with partner Larry Balestra owns S&L Wholesale Produce Co.

“This market’s unique in that we all meet and all of the big merchants are involved on the board of merchants. We have a monthly get-together on what we want to see on the market.

“This new building, it’s pretty impressive, and that’s just the beginning of the whole modernization of this market.”

San Francisco Wholesale Produce Market plans to expandSalisbury said he also was excited about the tenant — a high-end Bay Area retail grocer that the market had signed to occupy one-third of the new building.

Another company has signed a letter of intent for the other two-thirds of the building, Janis said.

Stanley Corriea Jr., president of Stanley Produce Co. Inc., the merchants’ board and the market board, said the 60-year lease from the city gives the market a tremendous advantage.

“We have that security,” he said, adding it also gives him the stability to plan for his own company’s expansion.

Corriea said the market is blessed by being close to the source of fresh produce, unlike terminal markets in the East.

“This area is the best area for produce in the world,” he said.

“All of the suppliers are within one to two days. Between the farmers markets and the produce market, we’re definitely spoiled. It’s a great advantage — people are used to seeing good produce.”

The new building’s design incorporates successful details from earlier construction projects within the market, Janis said. For example, concrete rather than asphalt was used to pave the area in front of the 29 loading doors.

Although concrete is more expensive, he said it holds up much better under the heavy weight of trucks than asphalt does.

The building will be gold Leadership in Energy and Environmental Design certified, meaning it will be highly energy efficient, Janis said.

Hathaway Dinwiddie Construction Co. is the general contractor, and Janis said they were fortunate that project manager Michael Black had experience building produce facilities in the Salinas-Watsonville area.

The building at 2201 Jerrod that houses VegiWorks and Earl’s Organic Produce was built in 2000 and isn’t a candidate for possible expansion or facelift.

But the market’s other four buildings, built in 1963, will be considered one at a time, with the outcome determined by the board and future tenants, he said.

Growth among individual tenants has prompted relocations within the market.

In February, Earl’s Organic Produce moved next door to where it was, increasing its space by about 40%, said Earl Herrick, owner and founder. He also had three banana ripening rooms built so he can offer custom ripening of up to 60 pallets at a time.

Upstairs is a kitchen that also serves as a demonstration spot for visiting buyers and chefs.

“Since we’re in the food business, we have to have a righteous kitchen,” Herrick said.

VegiWorks Inc. moved into Earl’s former 20,000-square-foot spot, allowing it to consolidate produce and nonproduce items in one location, said Paulo Ho, warehouse manager.

The family operation had been in a 12,500-square-foot stall across the street with dry goods stored off-market.

At the same time, VegiWorks’ new location has three separate coolers tailored for the requirements of individual produce items, he said. One is a dry cooler with reduced humidity for items, such as mushrooms, that can spoil faster when stored under high humidity.

Another one has the higher humidity needed to keep leafy greens fresh.

The facility also has a freezer, enabling VegiWorks to keep in stock at least a dozen different types of fresh ramen noodles for the area’s restaurants.

The building, which has enclosed docks, will allow VegiWorks to beef up its food safety program and pass third-party food safety audits, Ho said.

Coosemans Worldwide relocated to a corner spot in the older part of the market in July that provides larger coolers and a better layout, said Bill Peveler, general manager.

“This was kind of a quiet spot and now this has created a busy spot,” he said.

Peveler said he was heartened by the growth of the San Francisco market, especially since he had worked in Cleveland before and had seen its market shrink.

“It’s just like a mall,” he said. “The more vendors you have or the more stores, the better you’re going to be.”