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Sunday, 29 March 2015 22:00

On the market: Site 36 listed for first time, but partners remain choosy; Rockford plans 200-acre industrial park in Walker

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The partners behind Site 36 have tapped Stu Kingma at NAI Wisinski of West Michigan to list the vacant industrial property for the first time since the former GM Stamping Plant was demolished. To date, the partners – the city of Wyoming, The Right Place Inc. and Lormax Stern – had taken a very targeted approach to marketing the facility. However, despite listing the property, they still intend to be very intentional in searching for the right one or two major industrial users for the site. The partners behind Site 36 have tapped Stu Kingma at NAI Wisinski of West Michigan to list the vacant industrial property for the first time since the former GM Stamping Plant was demolished. To date, the partners – the city of Wyoming, The Right Place Inc. and Lormax Stern – had taken a very targeted approach to marketing the facility. However, despite listing the property, they still intend to be very intentional in searching for the right one or two major industrial users for the site. COURTESY PHOTO

Stakeholders in Site 36, the sprawling vacant property near the intersection of 36th Street and Clay Avenue SW in Wyoming, maintain that they’re still being picky in finding the right one or two companies to develop the industrial location.

But instead of relying just on targeted, direct marketing efforts to find a user for the industrial property, the city of Wyoming has listed the site publicly for the first time since the former General Motors stamping plant closed in 2009 and was demolished after nearly 75 years in operation.

While Site 36 has been listed with Stu Kingma at NAI Wisinski of West Michigan, the partners — the city of Wyoming, The Right Place Inc. and Bloomfield Hills-based developer Lormax Stern LLC — say they still plan to be very intentional in finding a large-scale advanced manufacturer that could bring good-paying jobs to the site, even though modern manufacturing looks much different than the site’s former use.

“It once housed 1,500 people,” said Wyoming City Manager Curtis Holt. “Do I think it will be that again? No. It’s a much different world today. It’s an outdated way to do manufacturing.”

As Site 36 and other large-scale industrial properties in the planning stages of development begin to come on the market, real estate industry sources say the sites are needed since inventory is the tightest it’s been since before the recession.

The lack of inventory encouraged other local developers to consider getting into the market.

In Walker, northwest of Grand Rapids, Rockford Construction Co. acquired roughly 230 acres near the Walker Avenue and I-96 interchange that it plans to convert to a mixed-use site. The company targets about 200 acres for industrial purposes, said Paul Roberts, senior vice president of regional development at Rockford Construction. It hopes to rezone the remainder of the land for restaurants and hotel uses, he said.

“Our perception is that the economy is healthy and industrial users seem to be expanding,” Roberts said. “There’s not a lot of inventory out there. The majority of developers feel that it’s tipping over. I would say that I don’t hear anyone discouraging development of industrial (space).”

The land in Walker was once intended to be part of a sprawling commercial retail development anchored by a Cabela’s store, but those plans never materialized. Rockford bought the land out of foreclosure in 2012, according to county property records.

The company has already engaged in initial conversations with potential users, but Roberts said he could not name them because of confidentiality agreements. About half of the eight to 10 groups Rockford has spoken with have been in the automotive sector, he said, adding that the developer hopes to complete much of the zoning and permitting process sometime this summer and break ground later this year.

INVENTORY NEEDED

Research from commercial brokerages around West Michigan backs up Roberts’ assessment that industrial properties in the region are in short supply, but speculative building of modern manufacturing space has been slow to occur.

Commercial real estate insiders in West Michigan say that whether a manufacturer is looking for 20,000 square feet or 150,000 square feet, the vast majority of the best space with modern amenities —  high ceilings, heavy-duty electrical connections and easy access to transportation infrastructure — has been scooped up already.

“The West Michigan industrial real estate market continued to mature in 2014 with landlords, tenants and brokers all adjusting to the reality that demand for quality space has reached an all-time high and supply is struggling to keep up,” according to the 2015 market forecast from Grand Rapids-based Colliers International West Michigan. “As the region continues to attract national and international manufacturers, industrial inventory has been stretched near its limit.”
Kingma of NAI agrees.

“There’s just not a lot of good options out there,” he said.

While the listing of Site 36 or Rockford’s proposed industrial park should eventually add some needed inventory, manufacturers bursting at the seams in existing facilities will still need to wait, sources said.

“It is very clear that (Site 36 development) will be measured in years, not months,” said Tim Mroz, vice president of marketing and communications at The Right Place. “The types of users that could be on that site are few.”

FINDING THE RIGHT USERS

Because of the overall attributes of Site 36 — its large size and convenient access to highways and railways — as well as Wyoming’s desire to have one or two rather large employers populate the site, stakeholders are adamant that they will be patient in seeking out a user or users for the site because they want to make sure the right type of manufacturer winds up there.

“If you take all the factors together, the goal would be to have that site continue its legacy,” said NAI’s Kingma. “What that looks like remains to be seen. There is going to be a sensitivity to what is going to be set there.”

Holt told MiBiz that several potential users have come forward as possibilities but have not been the right fit. Chinese automotive supplier CiTic Dicastal Co. Ltd. looked at Site 36, but it ultimately chose to locate at the vacant United

Solar Ovonic campus in Greenville because it wanted to have an existing building, he said.

The partners would also consider food processors as a possibility for future tenants, he added.

In listing the property with Kingma, Site 36 will now be open to a new set of industrial users, said Mroz of The Right Place, the economic development group responsible for marketing the site nationally and internationally.

“The overall strategy has not changed,” Mroz said. “We are still looking for value-added businesses. … We have said from the beginning that the site could hold up to three potential users. One large company would be great, but those types of projects are few and far between.”

OCCUPANCY HIGH REGIONWIDE

While the partners behind Site 36 and Rockford Construction search for just the right mix of users for their new industrial projects, other West Michigan communities are also experiencing high occupancy levels at similar sites.  

Every building in Battle Creek’s Fort Custer Industrial Park, home to companies such as Denso and Janesville Acoustics, currently has at least one user, said Doug Voshell, marketing manager at Battle Creek Unlimited. Just a handful of individual units remain available in certain buildings, he added.

Down I-94 at Kalamazoo’s Midlink Business Park, occupancy remains around 90 percent, said President David Smith.

The largest single block of available space there is about 160,000 square feet, located in the park’s west building where clearances are about 20 feet, said Smith, who also serves as a managing director at California-based Hackman Capital Partners, the company that owns Midlink.

Contrary to the strategy behind properties such as Site 36, the company’s goal with Midlink is to be “super-flexible because the market tells you where the sweet spot is,” Smith said.  

Likewise, the Muskegon Port City and Seaway Industrial Parks are each at about 80 to 90 percent occupied, said Mike Franzak, zoning administrator and economic development planner for the city of Muskegon.

Many of the industrial expansions in the area occurred in the last two to three years, Franzak said. Now, companies are generally expanding on existing property.

“We’ve encouraged local businesses to expand and we’ve had some success,” Franzak said, noting that cities struggle to find massive projects these days. “It’s hard to get the whale.”

Read 3746 times Last modified on Monday, 30 March 2015 15:49

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