Tuesday, November 11, 2014LORDSTOWN, Ohio – In the spring of 2013, NorthPoint Development LLC, a commercial real estate developer in Kansas City, Mo., acquired 80 acres next to a General Motors Co. plant in nearby Fairfax, Kan., that produces the Chevrolet Malibu.
In less than two years, the land is home to 1,200 new jobs, a handful of tier-one automotive suppliers, distribution centers, and light manufacturers, and roughly 1.5 million square feet of new commercial buildings.
"We expect to do the same here," said Chad Meyer, president and chief operating officer of NorthPoint, which yesterday agreed in principle to purchase 173.5 acres in Lordstown near General Motors Co.'s manufacturing complex for potential industrial and commercial development. NorthPoint Development is buying the land from the Revitalizing Auto Communities Environmental Response Trust, or RACER, the entity created to oversee the sale and development of properties owned by the former General Motors Corp. before its 2009 bankruptcy.
The Fairfax project – known as the Central Industrial Park -- landed its solid share of automotive-related businesses, Meyer noted, but was also successful in attracting food distribution centers and general manufacturers to the redeveloped site. "Almost all of them were new to the region," he said.
It's part of a business strategy that NorthPoint has employed since the company was established in 2011, Meyer notes.
The Lordstown project would be NorthPoint's second affiliation with RACER, or Revitalizing Auto Communities Environmental Response Trust, an entity that handles the redevelopment of properties across that country General Motors Corp. abandoned during its bankruptcy in 2009.
Meyer hopes to begin clearing ground soon at the site, just east of the Lordstown plant at state Route 45 and Hallock-Young Road, he said.
Repositioning suppliers closer to major auto plants helps save them hundreds of millions of dollars every year. "We've seen time and time again when suppliers move 25 miles closer to the plant, they can save the plant $2 million a year on inbound trade," he said, raising the possibility of relocating work that had been done in other parts of the country, or even in China or Mexico. "That certainly would be the hope," Meyer said.
The site in Lordstown proved ideal because it's close to a high-volume GM plant -- the Lordstown Complex manufactures the hot-selling Chevrolet Cruze -- and that it's positioned near a busy Interstate system, in this case Interstates 76 and 80. "That opens the opportunities for more regionally based distribution companies," he said.
Meyer projects that the proposed business park could attract as many as 1,500 jobs. The company has three other GM-related projects in the works in Spring Hill, Tenn., Dallas, and Fort Wayne, Ind.
"I'm pretty excited about this," remarked Mayor Arno Hill, who said the deal started to coalesce in the last month or two. "My guess is that they'll start to clear land this year," he said.
The land has sewer, water and electric service, so there's no need to add this type of infrastructure, just roadways, Hill said. It's also zoned for industrial use.
The mayor said that the developer has a solid reputation and should make this property very marketable to distribution companies searching for a strategic location to do business. "They'll put the investment in and sell to people coming in to create jobs," Hill predicted.
The developer could also benefit from the array of support it could receive from organizations such as the Youngstown Warren Regional Chamber.
"We've been talking to the potential purchaser for quite some time and informing them of the services that can be provided," relates Sarah Boyarko, vice president of economic development and business retention at the chamber. "This firm is experienced and definitely has a plan in place. It's positive for the community and the village of Lordstown."
Bruce Rasher, redevelopment manager for RACER, said NorthPoint should be able to capitalize on the region's economic growth by adding new warehouse and distribution space just as it did in Fairfax. "In that case, development began immediately on closing," he said, while NorthPoint aggressively marketed the development to suitable companies.
The agreed sale price of the Lordstown site is confidential, he added.
"I have every reason to believe that NorthPoint will work with a great deal of urgency and secure such commitments for the Lordstown market," Rasher said. "They have a strategy, and they have the potential to line up users for this site."
Rasher said it's difficult to pinpoint the amount of investment in such a project because no anchor tenants have been announced, but speculates it would be in the "tens of millions" of dollars.
RACER was formed in 2009 as part of an arrangement between General Motors Corp., the U.S. government, 14 states with affected properties, and the Mohawk Tribe in upstate New York. The mission of the trust is to clean and redevelop vacant plants, buildings and land abandoned as a result of the bankruptcy.
"The developer has a strong track record," Rasher said of NorthPoint. "They're in the business to develop properties, not to sit on them."
MORE:
Industrial Park to Target GM Lordstown Suppliers
Pictured: No visible markings on the 173.5 acres in Lordstown that NorthPoint NorthPoint Development LLC agreed to purchase for potential industrial and commercial development.
Copyright 2014 The Business Journal, Youngstown, Ohio.
CLICK HERE to subscribe to our free daily email headlines and to our twice-monthly print edition.