Former Ford, Chrysler auto plants await rebirth
St. Louis Business Journal
January 29, 2010
by Chris Birk
A brutal economic landscape helped spell the end for Ford Motor Co.'s sprawling manufacturing plant in Hazelwood.
That same dismal economy still has a grip on the site's future. But city officials and other stakeholders remain optimistic that a $250 million business park taking shape at the site will bring jobs and recovery in the coming year.
"Even though it's been a long process and it continues to be a slow process due to the economy, there is hope," said David Cox, Hazelwood's director of economic development. "The jobs created at the Ford site could equal or exceed what Ford had, but it's difficult to predict. The biggest thing for us is that the potential is there for jobs -- period."
At the same time, officials in Fenton are just now starting on the path toward transformation for the 341-acre site of the former Chrysler plant, which shuttered last year.
Combined, the two sites provide 500 acres of vacant land in St. Louis County locations with easy access to multiple highways. "To have that much land and to have that great of access, it's an opportunity for St. Louis," said County Executive Charlie Dooley.
Aviator Business Park
In its heyday, the Ford plant in Hazelwood employed about 2,000 workers and pumped about $3 million annually into the city's coffers, making it the single largest contributor. Ford closed the facility in spring 2006.
California-based Panattoni Development purchased the site in 2008, envisioning a new era for the 160-acre complex. Neither Panattoni nor Ford disclosed the final price, which real estate sources estimated at more than $50 million.
The development company plans to refashion the plant into the Aviator Business Park, a 2.7 million-square-foot mixed-use development aimed at light manufacturers, data centers, distribution operators and other commercial clients.
Demolition started at the site just four months after Panattoni took over. The developer has managed to recycle nearly all of the old 3.3 million-square-foot auto plant, including 50,000 tons of steel, 7,500 tons of copper and stainless steel, and 450,000 tons of concrete and masonry.
Today, the site is clear and ready for its next chapter. Prospective tenants have already expressed an interest, drawn in part by the property's infrastructure and amenities.
The park lies near Lambert-St. Louis International Airport and features extensive rail service, a huge power supply system and an extensive communication network.
"It's a pretty solid location," said Mark Branstetter, senior vice president for Panattoni in St. Louis. "Now layer in all these things that were put in place to service the previous use. It becomes a pretty intriguing site."
Branstetter said some "big-name users" have approached the company about the business park, but the development firm is still in search of its first tenant.
The same economic crunch that led to the auto plant's demise is likely giving prospective park tenants pause, Cox said.
"Nobody's really pulled the trigger yet," he said. "The national economy being in the tank is the thing that's kept a lot of people from doing that. People are very reluctant or unable to get the financing."
Given the flat-lining recovery, Panattoni wound up pulling its own trigger instead. The company recently exercised an 18-month extension built into its development agreement with Hazelwood. The deal essentially gives Panattoni another year and half to break ground for new tenants.
Still, officials from Panattoni and the city remain pleased with budding interest in the site in the face of economic uncertainty.
"Given what the real estate world experienced in 2009 and probably will experience in 2010, we had a surprising amount of interest," Branstetter said. "Our hope is that we can still develop through this project pretty quickly once the demand starts."
The sooner the better for Hazelwood and its strained city coffers.
Another plum selling point is that the Aviator Business Park received a 25-year tax abatement from the city. The deal calls for a 100 percent abatement for the site's first decade and then a 50 percent abatement for the remaining 15 years.
The site is also located within an Enhanced Enterprise Zone, meaning it qualifies for tax credits for new and expanding businesses.
"Hazelwood recognized right away they had a site to deal with, and they were very aggressive and very flexible," Branstetter said. "They're probably the poster child for municipalities as they try to grapple with what to do with these plants post-closure."
Chrysler site
Meanwhile, the future is still uncertain for St. Louis County's other defunct auto plant, the massive Chrysler compound along Interstate 44 in Fenton.
County officials are applying for a $1.5 million federal grant to study the Chrysler property, which contains more than twice the acreage of the Ford plant in Hazelwood.
In all, state, county and local leaders plan to spend about $2 million on a campaign to clean up, incentivize and market the site.
The county had hoped to gain control of the property, but the responsibility will fall to a private developer, Dooley said.
"If we can get one person to come in, a large redevelopment concern, that would be great," Dooley said. "It could be a combination of things. We don't know what the outcome is going to be, but we're encouraged."
The property has been in federal bankruptcy court since Chrysler closed eight plants in April.
The court recently selected Clayton commercial real estate firm NAI Desco to broker the Fenton site, which is already attracting interest from potential buyers, said Fenton Mayor Dennis Hancock.
Hancock said a mixed-use development, not unlike the Aviator project in Hazelwood, would be an ideal fit for the Fenton property.
"We're looking forward to continuing this process, and hopefully it won't be too long before we're talking about what's actually going to happen there," Hancock said. "We will see the site begin again."
