Meet Amit Hasak of Hasak Cold Storage in Lyons

Today we’d like to introduce you to Amit Hasak.

So, before we jump into specific questions about the business, why don’t you give us some details about you and your story.
My family immigrated from Israel in 1966, when I was 5 years old. We initially lived in Hyde Park, then Petersen Park and finally in Highland Park. I suppose my parents kept looking for the parks. I graduated from Bradley University in 1983 and then moved to Israel and eventually enlisted in the Israeli Defense Forces. Towards the end of my enlistment, I married my beautiful wife Etty in 1986. Our eldest son Itai was born in 1988 and our daughter Mika was born in 1993.

My father, Nehemiah, entered the cold storage business in 1966 when we moved to the United States. In 1994 he purchased Fulton Market Cold Storage. The building that currently houses Google int he Fulton Market neighborhood. I joined him in 1999 and brought out one of his partners in 2003. We somehow made it through the recession in that old creaky building that was built in 1923. We didn’t even take a salary for a year to keep the business going. Eventually, we sold the property to Sterling Bay in 2012 and I relocated the warehouse to Lyons, IL. where I leased out 100,000 sq ft of freezer and cooler space. My father retired officially and Itai came on board as a third generation Hasak in the cold storage business. In an era where family businesses are becoming extinct, I was proud to have Itai join me. He has been a huge asset to the business.

The recession basically killed our business since we store inventory for our customers and our customers were not storing any inventory since the banks were not giving out any form of financing. Moving out to Lyons to a more modern facility, albeit built in 1975, and the end of the recession, allowed us to grow the business again. Together with my dedicated team, we did just that.

In October of 2017, I incorporated my startup company named Transship. Transship outsources all the logistics involved in exporting or importing goods. I joined 1871 in August and have utilized their resources to gain access to potential investors. I also published my first book, “Pops and Me”. Available in Amazon Books.

Overall, has it been relatively smooth? If not, what were some of the struggles along the way?
Life has proven that nothing is ever smooth. However, it is the tough times that make you the person you are today. I have encountered many struggles and disappointments along the way.

Professionally, everything was smooth sailing until 2004. Until that time, the newest cold storage that was built in Chicago was built in 1965. In 2004, three new cold storages were built in the Chicago area. They started offering my customers free storage if they left us. Our overhead to run and maintain the old building was astronomical. So here we were trying to compete against shiny brand new cold storages with all the modern amenities that we did not have such as bar coding, racking and proper truck parking. We had no truck parking and the police would ticket the trucks that were waiting out on the streets. Trucks, as a result, didn’t want to come to our facility.

The recession was tough as well. Our bank cut us off literally from day to day. After 14 years of profitability, we were losing money during the recession. They saw us as high risk and cut us off from our line of credit, which was our lifeline. My father and I took a loan out of our life insurance. The TARP money that was supposed to reach small businesses like ours, was never released by the banks. It was very tough times for small businesses like ours.

Having to deal with the USDA through the years has also been very difficult. The USDA means well, but their execution of their duties leaves a lot to be desired. They lack consistency in the field with every USDA Inspector interpreting their job differently than the other. I hate to say it, but they cause more problems than they solve.

We are also a Union shop. Dealing with the Union is beyond difficult for a small company such as ours. When Unions were initially set up, they served a purpose to protect employees from unfair employment practices. But fast forward to the modern era and their existence is less valuable due to increased laws and regulations. Only three of the 10 cold storage in Chicago are Unionized and that makes for an unfair playing field. Furthermore, the Union’s Pension Fund is grossly underfunded. The law known as ERISA, for some reason lays the responsibility of the pension’s underfunding on the business owners. In other words, the monthly payments that we make increase about 10% annually to try and make up for the pension’s lost funding. Furthermore, businesses such as mine, that are a part of this pension fund (Central States Pension Fund) have what is called a Withdrawal Liability. This Withdrawal Liability is composed of some abstract formula that comes up with some figure that the business owner is liable for the Fund’s losses. In other words, even though the business owner had no say where these funds were invested, they are the ones responsible for the losses. As long as I keep making the monthly payments to the Pension Fund, they cannot collect the Withdrawal Liability from me. However, if I decide to close the company, sell the company or am late in making the monthly payments, then they can collect the Withdrawal Liability. My company has annual sales of about $4 million. My Withdrawal Liability is at $4.5 million. Once the Withdrawal Liability kicks in, they can come after any asset that I own to collect the $4.5 million. Talk about unfair practices! This multi-employer pension fund has seen its members dwindle through the years as a result of the recession with many companies going bankrupt.

Please tell us about Hasak Cold Storage.
As a cold storage warehouse, we are basically an extension of our customer’s business. They store their inventory with us and then distribute it locally, regionally, nationally and internationally from our facility. We only store product that is fit for human consumption. We have both freezer (-5 degrees F) and cooler (+35 degrees F) of storage space. Unlike the self-storage units, our storage areas are anywhere between 10,000 – 100,000 sq ft and are fully racked and barcoded for tracking purposes. We serve anywhere between 50-75 trucks a day and run 24/5. We are paid to unload a truck when it delivers the product, then store it and then load it on the outbound.

We are the only 100% owner operated cold storage in Chicago that deals strictly in cold storage warehousing. In a service sector that we are in, being able to make quick decisions without seeking approval from other managers is what sets us apart from our competition. I tell my employees that we may not be the largest cold storage in Chicago, but we are the best. Unlike my competition who employ as many as 80 people, I have a total of 10 employees in the warehouse. We act more as a commando unit than a huge brigade. We work at a much different and more efficient pace than our competition. My Plant Supervisor and office staff have a lot to do with that.

When we owned the old Fulton Market building it felt as though we were in the Indy 500 driving a Model T. Here we were in a multi-story building built in 1923 competing against one floor modern facilities. We had no business competing against them. But we managed to work our way through the great recession because, at the end of the day, we knew the business better than our competition.

If you had to go back in time and start over, would you have done anything differently?
I have learned so much through the years. Especially form the hard times. Hindsight is 20/20. We had an opportunity to opt out of the Union and their Pension Plan when my father purchased the company in 1994. Had that been done, we could have avoided many past and present issues that we have to deal with.

I would have loved to have had more leverage when we sold the building in 2012. However, the business was in such bad shape that we just took the first offer we got.

Contact Info:

• Address: 8424 47TH Street
  Lyons, IL 60654
• Website: www.hasakcs.com
• Phone: 312-738-9330
• Email: amit@hasakcs.com

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