Federal stimulus money will help pay to market the abandoned Chrysler assembly plants in Fenton.
St. Louis Globe-Democrat
February 19, 2010
by Steve Birmingham
Federal, state and local officials announced Thursday the awarding of a $1.6 million Economic Development Administration grant, and details of the 25 percent matching funds from the state, St. Louis County and City of Fenton, at a meeting inside the now silent south assembly plant.
With the backdrop of idle production lines, dangling air compressor hoses and abandoned paint booths, United States "Car Czar" Dr. Ed Montgomery, Director of Recovery for Auto Communities and Workers, said the grant would "help the county, help the city (of Fenton) and help the state put together a plan for how to best re-use the facility and "putting it back into productive use."
Also taking part in the announcement were U.S. Assistant Secretary of Commerce for Economic Development John Fernandez, St. Louis County Executive Charlie A. Dooley, U.S. Congressman Russ Carnahan, David Kerr, director of the Missouri Department of Economic Development, Fenton Mayor Dennis Hancock and Denny Coleman, president and CEO of the St. Louis County Economic Council.
The grant is part of federal economic stimulus funds made available to the EDA, which Montgomery said is "intent on funding projects to attract businesses to an area and help local companies grow and get other business in the area."
The EDA grant was applied for by the City of Fenton, the St. Louis County Economic Council and the state of Missouri in December, 2009.
The 25 percent match will be funded with $262,500 from the state, $131,250 from the county and $131,250 from the City of Fenton, bringing the total grant to over $2.1 million.
The grant money will be spent on marketing, as well as on environmental studies to determine what, if any, environmental issues exist and need to be remediated.
The over five million square foot Chrysler facility, which sits on 295 acres, opened in the early 1960s and assembled automobiles, most notably, the Plymouth Road Runner. At one point the two assembly plants employed over 5,000 a day.
The North Assembly Plant manufactured the Dodge Ram 1500 and 2500 standard and Quad cab pickup trucks and the RamBox option and closed in 2009; production of those trucks moved to the Warren, Mich., truck assembly plant.
The South assembly plant manufactured the Dodge Caravan, Grand Caravan and Chrysler Town & Country minivans and closed in 2008; production of the minivans was moved to both Mexico and Canada.
The assembly plants were shut down as part of Chrysler's Chapter 11 bankruptcy proceedings, and Montgomery said bankruptcy process separated Chrysler from a set of "properties it owns that are no longer viable."
"The new company, Chrysler, is no longer the owner of it," Montgomery said. Chrysler has nothing to do with it now. CapStone Investments, an investment banking firm that services large institutional accounts, is the appointed executor of the estate that holds this property, and they've hired the realtor to work with the county and state. I think between the three of them they'll be able to get this property re-marketable."
"I think the important message is that this is a very positive step forward in taking this productive asset and getting it back into use creating jobs," Montgomery said.
The Chrysler property is being marketed for CapStone Investments by NAI Desco, a commercial real estate company.
Many touted the plants close proximity to interstate highways and rail line access, and Fenton Mayor Dennis Hancock said many potential buyers are interested in the property and that a sale could be closed on by summer, 2010.
David Kerr, director of the Missouri Department of Economic Development, said an intergovernmental commission will be formed to do the administrative research that may be required, hire professional consultants and "direct and develop the strategic action plan necessary to move this initiative forward."
Fenton's Ward 2 Alderman Joe Maurath said of the use of federal stimulus funds that "I hope we learn by this. "
"This is the second time the federal government has bailed this company out, "Maurath said. "And where did they leave us? With our equipment going to Mexico and Canada. There's nothing we can do now, but in the future I hope we truly pay attention to the history. Because history is the best barometer for the future."
Hancock called it "the first step in the process to doing something productive at this site."
"If we can help with the marketing of the site and getting that process started, this to me is an effective use of government funds," Hancock said. "We had the money budgeted last year and held it in reserve so we felt it's a good investment on our part to get this process started and hopefully, down the road, generate enough revenue to pay ourselves back."
During the grant announcement, Hancock said he remembered the first time he visited the plant in 2001.
"As I look around I remember walking and being struck by the cacophony of activity that was going on," Hancock said. "We wouldn't have been able to have a conversation face to face, simply because we wouldn't have been able to hear each other. There were people working, there was things clanking together, the noise was deafening."
"Now the silence is deafening," he said. "But today we're here to celebrate a new beginning and hopefully, at some point in time, we'll be able to celebrate thousands and thousands of new jobs that are being performed at this site."
