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By Carrie Staton
As 2012 came to a close, an economic development organization in West Virginia partnered with a Los Angeles real estate company to purchase a closed steel plant in an innovative and creative partnership that will use a new method of brownfields redevelopment to impact the state’s northern panhandle.
In May of 2012, RG Steel sought Chapter 11 bankruptcy protection and has since sold several of its facilities and assets in bankruptcy court. In December, Los Angeles real estate firm Hackman Capital Partners purchased one of these plants, a facility in Beech Bottom, West Va. that once finished metal coils. At the height of production, over 800 employees worked at the plant, but most recently the site provided only 20 to 30 jobs for local residents.
After purchasing the site, Hackman resold the property to a local economic development organization, the Business Development Corporation of the Northern Panhandle (BDC) via quit claim in a deal that gives the BDC control of the 613 acre property, which includes 120 acres of prime, developable flatlands fronting the Ohio River.
Under the partnership, the BDC will assume the environmental legacy issues at the site, and Hackman Capital will retain the rights to the equipment on the property. As a nonprofit organization, the BDC has access to state and federal funds to remediate contaminants on the site, resources that companies like Hackman Capital aren’t eligible for. Following site cleanup, the organizations will work together to market the property and share the proceeds from leases or sales.
This purchase marks one of several recent successes for the BDC and the region, which has struggled with the declining steel industry amid a global capacity glut. Fortunately, the expansion of the natural gas industry has given West Virginia’s northern panhandle renewed attention from national and international prospects, as well as federal and state officials, as a place with economic promise.
Within the span of three months, four sites in Hancock and Brooke counties—ranging in size from 4.25 acres to 616 acres—have become available for development due to the intervention of the BDC. This is good news for a region that, more often than not, is passed over when companies look for location and expansion opportunities.
The region stands to gain a great deal from the success of this unique partnership between Hackman and the BDC. The Beech Bottom site offers an opportunity to diversify the regional economy by attracting employers to locate on property that was not previously available in the real estate inventory. Any industry that moves to the site will draw from the labor pool in West Virginia, as well as in neighboring communities in Pennsylvania and Ohio.
The downstream economic impacts could be in the millions of dollars. The explosion of the natural gas industry in the region has consumed available real estate for a variety of uses, artificially increasing the value of real estate. The only available properties for economic development are brownfields like the RG Steel plant. The BDC’s recent successes with brownfields redevelopment in the region have given them the expertise and the credentials required to raze dilapidated structures, preserve valuable buildings, remediate contaminated property, and prepare for the adaptive use of these underutilized or vacant properties.
The BDC is in currently interviewing multiple engineering firms to perform a master plan and adaptive use study for the site. The site is appropriately sized and located for a variety of uses, including:
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Utilities (Energy Cluster): Rental equipment for gas and oil operations, such as power swivels, ATV’s, welders, backhoes, chainsaws, water pumps, frac tanks, etc., gas transmission products, centrifuge service (office and service space) used in gas drilling, equipment and chemical supplies for gas drilling (store chemicals and sand used in fracking), and drilling fluids. The abundance of natural gas in the area also creates the potential to expand the regional manufacture of chemicals and plastics. Over the past few years, natural gas prices have made it more profitable for chemical and plastic companies to look overseas for lower cost options.
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Fabricated Metal Product Manufacturing (Manufacturing Cluster).
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Nonmetallic Mineral Product Manufacturing (Manufacturing Cluster). Industries in the Nonmetallic Mineral Product Manufacturing subsector transform mined or quarried nonmetallic minerals, such as sand, gravel, stone, clay, and refractory materials, into products for intermediate or final consumption. Processes used include grinding, mixing, cutting, shaping, and honing. Heat often is used in the process and chemicals are frequently mixed to change the composition, purity, and chemical properties for the intended product.
This partnership offers a unique structure that could potentially be replicated on brownfields properties in other regions. Economic development authorities could enter similar partnerships with private companies, given the right resources and experience, including:
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Sufficient capital for acquisition, legal fees, back taxes, consultants, and staffing;
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Legal counsel with expertise in environmental law and real estate law;
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Strong partnerships and support from the local, county, state, and federal officials;
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Access to local, state, and federal money for site preparation, site cleanup, master planning, and marketing; and
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The capability to prepare and implement a business plan that could draw a proper balance of financing that included public, private, and foundation financing.
Carrie Staton is West Virginia Redevelopment Collaborative Coordinator, Northern West Va. Brownfields Assistance Center.
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Brownfield Stateside Report
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by Staff Report
City officials in Indianapolis have announced the creation of a new Brownfield Redevelopment office that will implement new grants, and focus on development opportunities in blighted areas near shuttered industrial sites.
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by Staff Report
The city commission in Daytona Beach, Fla., has agreed to designate a strip of beachside as a Brownfields Redevelopment site, while Wayne County, Mich., bags grant for Detroit redevelopment work. |
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by Pittsburgh Business Times
The board of the Urban Redevelopment Authority of Pittsburgh voted unanimously in May to adopt a new Tax Increment Finance District for the remaining undeveloped portions of Summerset at Frick Park, the 238-acre brownfield redevelopment in the city’s East End.
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Breaking Down Brownfields
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