A spruced-up industrial building in southeast Lawrence is back in business.

PackerWare Corp. this week agreed to lease 235,000 square feet of space inside the former E and E Display Group building at the corner of Haskell Avenue and East 29th Street.

The lease fills the bulk of the largest vacant industrial building in town.

Lawrence-based PackerWare, a subsidiary of Berry Plastics Corp., will use the space as a warehouse and distribution center for cups, plates, bowls and other housewares produced at the company’s plant in northern Lawrence.

The site will serve as a hub for PackerWare’s distribution system, which accounts for 35 of the company’s 450 employees. PackerWare plans to hire three more employees as the warehouse becomes fully operational, expected by the end of the year.

The move will allow PackerWare to close a 160,000-square-foot warehouse in Topeka. PackerWare had secured the overflow space four years ago at Forbes Industrial Park as the company was producing millions of cups a year and annual sales were surging to $55 million, up from $45 million a year earlier.

PackerWare Corp. this week agreed to lease 235,000 square feet of space at 910 E. 29th St., the former home of E and E Display Group. The building's owner, Big Industrial LLC, upgraded the building's roof, dock doors and other components after acquiring the property earlier this summer.

By moving the overflow warehouse to Lawrence, PackerWare will save 5 percent to 10 percent on freight costs, said Joel Plaas, PackerWare’s plant manager.

PackerWare officials had been mulling such a move for months, as the company’s lease on the Topeka building neared an end, Plaas said. A run-up in fuel costs made the case even more compelling.

“This is more advantageous for our business. It’s closer to our plant,” Plaas said. “With the recent (fuel price) explosion, it really cemented the deal.”

Terms of the Lawrence agreement were not disclosed, but Plaas described it as an extended lease that would meet the company’s needs.

“It’s not temporary, (and) it’s not a long-term solution,” Plaas said. “It’s a mid-term solution.”

PackerWare – whose 470,000-square-foot plant is located along North Iowa Street, north of the Kansas Turnpike – also continues to study expansion options of its own, including possibilities for new construction.

“They’re still on the table,” Plaas said.

The PackerWare lease, signed earlier this week, provides an anchor tenant for what had been the largest industrial building on the market in Lawrence.

The 323,000-square-foot building – vacant since July 2004 when E and E shut down – was purchased earlier this summer by Prairie Village-based Big Industrial LLC, which cleaned the place out and prepared it for occupancy by multiple tenants.

Big Industrial also owns the warehouse building being vacated by PackerWare in Topeka.

Todd Mendon, managing director for Big Industrial, declined to discuss arrangements in Lawrence for PackerWare.

“We have a number of parties with which we are speaking right now about that building,” Mendon said

Mendon and other Big Industrial officials are in Mississippi this week, working on closing the purchase of a former Sunbeam plant in Hattiesburg. The 726,000-square-foot plant would give the partnership more than 5 million square feet of industrial space in Kansas, Missouri, Arizona and Mississippi.

Marilyn Bittenbender, a broker for Grubb & Ellis/The Winbury Group, said that occupancy of the former E and E building would be a positive sign for the Lawrence market. Now the largest available space is a 67,000-square-foot speculative building in the East Hills Business park and other smaller buildings have been filling up with smaller operators.

“Bit by bit, the market vacancy is shrinking,” Bittenbender said. “That signifies good things overall for the market. People are growing and expanding their businesses. It’s all people needing more rather than less space.”