BEECH BOTTOM - The Business Development Corp. of the Northern Panhandle has emerged as the new owner of the 600-plus acre Wheeling Corrugating property in Beech Bottom, a complicated transaction that has been weeks in development.
The deal, which closed Wednesday in New York City, gives the BDC control of the massive property, which includes 150 acres of prime flatlands fronting the Ohio River as well as some 480,000 square feet of fully infrastructured warehouse space already under roof.
State Route 2 LLC, a subsidiary of Los Angeles-based Hackman Capital, owns the rights to the equipment that's on the property.
NEW OWNER — The Business Development Corp. of the Northern Panhandle is the new owner of the former Wheeling Corrugating property in Beech Bottom. - Warren Scott
They'll work together to market it.
"Obviously, it's adjacent to the Ohio River, which is rare," said Susan Skros, vice president of marketing and investor relations for Hackman. "That's why we were drawn to the opportunity - the energy boom in this area of the country, the magnitude of the site and our desire to collaborate with the BDC. We want to redevelop the site for better economic use. This is the perfect opportunity to bring more jobs to the area, a chance to take advantage of the energy boom in the area."
State Route 2 LLC purchased the property out of bankruptcy from the now-defunct RG Steel, and immediately signed over the land - and with it, responsibility for legacy issues there - to the BDC.
Pat Ford, executive director of the BDC, described it as "a gem" of a property, a rare development opportunity in the heavily industrialized Northern Panhandle. As a non-profit, the BDC has access to state and federal funds to remediate contaminants on the site, money Hackman couldn't leverage on its own.
"This isn't scary," Ford said. "Scary is when your future lies in someone else's hands and you have no say, no control, no influence. Here, the people who will have a say in this site are the businesses and residents of Brooke and Hancock counties, of the Northern Panhandle."
Papers on file with U.S. Bankruptcy Court show State Route 2 LLC had initially offered $2.1 million, minus any back taxes, for the equipment as well as land. Under bankruptcy court rules, others interested in the property had 14 days to submit higher or better offers for the property, and several potential buyers availed themselves of that opportunity to submit counter bids, pushing the final sale price up.
While Skros declined to say what the actual buy price was, Ford did say the BDC paid $200,000 to buy the land rights from State Route 2 LLC, which has an option to harvest all of the equipment.
"The chain of title for liability goes from RG directly to the BDC, so we're on the hook for any liability," Ford said. "But we're doing it with our eyes wide open. We've already illustrated our capacity to handle environmental liabilities to to the community of Chester, to the U.S. Environmental Protection Agency and West Virginia Department of Environmental Protection. We've illustrated our capacity to manage environmental cleanup, and we've also illustrated our capacity to successfully seek out and obtain funding to assist with cleanup. We'll apply the same model to the Wheeling Corrugating site. It might look like a steal on paper, but if you're in this business you understand the liability we've assumed (in the Beech Bottom deal)."
In Chester, the BDC acquired the old Taylor, Smith & Taylor pottery property in 2011 for $125,000, then secured more than $1 million from local, state and federal sources for its cleanup. The BDC involved community residents throughout the planning process, and Ford said they'll be following that same blueprint now in Beech Bottom. He said the goal there, as in Chester, is to ensure it brings big gains in terms of jobs and revenue.
"I think it's going to be an asset to the village and to the county," Beech Bottom Mayor George Lewis, describing the deal as "the most positive thing that's happened to Beech Bottom in the last 30 years."
Lewis said growth potential at the corrugating property "will help breathe life back into Beech Bottom," and said the deal serves to "highlight the strength of the partnership" between the BDC, the Brooke and Hancock county commissions and the village.
"We just have to wait and see" what happens, he said. "Hopefully, it will be huge, not only for Beech Bottom but also for Brooke County. With the way the economy is, we can't predict what will happen but we've all got high hopes."
Ford pointed out the BDC board saw the Taylor, Smith & Taylor project "as a catalyst to economic development," and said they're looking for the same kind of spark in Brooke County. But he also pointed out site acquisition is just the first step. To turn the property into a job and revenue creator, he said they'll once again need the involvement of the state of West Virginia, WVDEP and U.S. EPA.
"We're happy about the acquisition," he said, "but there's still a ways to go before residents will see material changes."
Skros, meanwhile, characterized the partnership as a financial collaboration: The BDC owns the land, "but we'll work with them" to bring new business and industry to the property. She pointed out Hackman Capital, established in 1986 by Columbus native Michel Hackman, has done $1 billion worth of real estate transactions in its history.
"When you see an opportunity like this, you jump on it," she said.