server stalls periodically at 100% CPU; usually averages 20%

Minecraft Server stalls periodically. Client sees mobs freeze, items freeze for ~5s, which then jump to catch up. Server log says "can't keep up". Client is on local wifi with server. Server always sees during these ~5s a CPU spin jump to 100%; it usually hovers at 20%-40% CPU. This repeatable and constant stall was not seen prior to 1.7.* updates. Server drive is SSD and should not be a problem; java min 1G max 3G RAM, usually hovers at 1.4G RPRVT and 6G VSIZE. Stall usually seems to occur when a player is traveling generating new terrain; not seen usually while stationary. Full sample attached of java during a stall. World size is large; region folder is about 2.6G.

[19:12:44] [Server thread/WARN]: Can't keep up! Did the system time change, or is the server overloaded? Running 7101ms behind, skipping 142 tick(s)
[19:13:34] [Server thread/WARN]: Can't keep up! Did the system time change, or is the server overloaded? Running 7128ms behind, skipping 142 tick(s)
[19:14:24] [Server thread/WARN]: Can't keep up! Did the system time change, or is the server overloaded? Running 7132ms behind, skipping 142 tick(s)
[19:15:15] [Server thread/WARN]: Can't keep up! Did the system time change, or is the server overloaded? Running 7156ms behind, skipping 143 tick(s)
[19:16:05] [Server thread/WARN]: Can't keep up! Did the system time change, or is the server overloaded? Running 7116ms behind, skipping 142 tick(s)
[19:16:55] [Server thread/WARN]: Can't keep up! Did the system time change, or is the server overloaded? Running 7220ms behind, skipping 144 tick(s)
[19:17:45] [Server thread/WARN]: Can't keep up! Did the system time change, or is the server overloaded? Running 7143ms behind, skipping 142 tick(s)

5314 Thread_5085917: Java: Server thread
+ 2763 ??? (in <unknown binary>) [0x102530b70]
+ ! 2719 ??? (in <unknown binary>) [0x1025283e6]
+ ! : 950 Java_java_util_zip_Deflater_deflateBytes (in libzip.jnilib) + 636 [0x102299065]
+ ! : | 900 ??? (in libzip.jnilib) load address 0x102293000 + 0x6c11 [0x102299c11]
+ ! : | + 535 ??? (in libzip.jnilib) load address 0x102293000 + 0x74b3 [0x10229a4b3]
+ ! : | + ! 204 ??? (in libzip.jnilib) load address 0x102293000 + 0x67a9 [0x1022997a9]
...