||:Oct 21, 2009;
New look from makeovers
Closed factories offer sites for growth when economy rebounds
By Dave Flessner email@example.com
Online: Hear SEIDA Director Beth Jones. Read related stories. Comment.
When Phyllis Powell graduated from high school in Trenton, Ga., in 1976, she didn’t have far to travel to land her first job.
Trenton Spinning Mills, Dade County’s biggest industry, was only a mile from Mrs. Powell’s home and hired her at age 18. The mill kept her employed as a spinning operator for 32 years until it closed in December.
But finding another job has proved elusive for Mrs. Powell and many of the 440 workers idled when the Shaw Industries facility was shut down.
“I’ve been looking for other jobs all over the region every week, but I just haven’t been able to find anything,” Mrs. Powell said. “I’m going to apply with Volkswagen next week (for the company’s new Chattanooga assembly plant) and hopefully something will come up soon.”
The 40-year-old shuttered carpet mill is among more than a dozen plants around Chattanooga that have closed
in the past two years amid the worst economic downturn since the Great Depression.
Like the workers they once employed, the owners of the abandoned factories are trying to find new work for the facilities — and many are hoping Volkswagen will give them a lift.
Collectively, the abandoned carpet mills and manufacturing factories across North Georgia and Southeast Tennessee have nearly 2.5 million square feet of factory floor space. The vacant space is more than twice the size of Hamilton Place mall and one-third more than the size of the Volkswagen’s $1 billion assembly plant being built at the Enterprise South industrial park.
“We think there are opportunities for adaptive reuses of these facilities, but you have to be very realistic about the market and, in some instances, it may take some time to find the right user,” said Beth Jones, executive director of the Southeast Industrial Development Association and the Southeast Tennessee Development District.
“There’s a buyer out there for everybody’s facility at the right price and situation,” she said. “But some of these properties don’t readily convert to what another manufacturer may need for their operation. An automotive manufacturer can’t just readily move into an old sewing mill.”
The Volkswagen plant should attract many automotive suppliers and other businesses that serve such suppliers, Mrs. Jones said. But building a major regional supplier network like the one that developed around the BMW plant in Greenville, S.C., or around Nissan in Smryna, Tenn., may not come as quickly as it did in those markets.
“The economic recession is making this a little bit different and, unlike some of the first auto plants that located in the South, the suppliers are already on this continent,” Mrs. Jones said. “The challenge early on for some suppliers may be how they can supply Volkswagen from their existing facilities and then, as they and Volkswagen grow over time, to locate facilities here in the future.”
Less than a mile from the Volkswagen plant, Gestamp Corp. is building a $90 million plant that will employ 230 workers making stamped parts and welded assemblies for the new VW sedan’s undercarriage. But so far, no other major Volkswagen parts suppliers have announced plans to locate in the Chattanooga area.
“Volkswagen is going to have a major impact on what is going on in manufacturing in this region,” said J. Bryan Rudisill, vice president of NAI Charter Real Estate Corp., a Chattanooga commercial real estate company that is marketing a number of empty factories in the region to prospective VW suppliers and others. “There’s a lot of interest, but people are still waiting on the supplier contracts.”
Mr. Rudisill and other economic recruiters acknowledge that the wait has been longer than originally anticipated when Volkswagen announced last year that it was building its 1.9 million square foot auto assembly plant in Chattanooga.
“It’s slower than we all imagined, but it’s just a matter of time for Volkswagen and the economic recovery in general,” Mr. Rudisill said.
FOR OLD MILLS
Manufacturers willing to retrofit old factories and mills have plenty of choices in the region. The nation’s two biggest carpet manufacturers — Mohawk Industries and Shaw Industries — have closed more than a dozen mills across the Southeast and are now looking for buyers for most of the facilities.
David Barber, senior vice president of Binswanger’s regional headquarters in Atlanta, is marketing 11 carpet and yarn mills shuttered by Mohawk Industries. Gold Creek Farms, a poultry processing firm, has agreed to buy a 341,000 square-foot yarn-manufacturing facility in Talladega, Ala.
Other facilities in South Pittsburg, Tenn., and across North Georgia and South Carolina are still for sale or lease, he said.
“I’ve seen slower periods, but not that lasted this long,” said Mr. Barber, a 33-year industry veteran. “But we are beginning to see some sign of activity and soon I think more companies are going to recognize that they need more space and there are some good deals in the market.”
The Tennessee Valley Authority is trying to help local communities market vacant structures. TVA spokesman Jim Allen said the agency is soliciting proposals for a consultant to work on evaluating existing buildings and making recommendations to community leaders about ways to reactivate the facilities.
Such activity can’t come too soon for many rural areas around Chattanooga, including Sequatchie and Bledsoe counties in Tennessee and Dade County in Georgia, where the recession has cost the counties their biggest industry.
Sequatchie County Mayor Michael Hudson said two of the county’s biggest manufacturers, Tecumseh Power Co. and Seymour Tubing Co., have closed their factories in the past year.
“These were huge blows to our community, but hopefully we can find another business to come in and use their facilities,” he said.
Martha Eaker, president of the Catoosa County Chamber of Commerce in Georgia, said Mohawk Industries’ idled mill in Fort Oglethorpe could be converted for a variety of production reuses.
“Most any kind of manufacturing could be put in that plant,” she said. “There are 720,000 people within a 30-mile radius and only six miles to Interstate 75.”
In Dade County, County Executive Ted Rumley said he hopes the abandoned Trenton Spinning Mills can be put back into productive use.
“It’s scary for a lot of people who lost their jobs at that mill and now are getting close to their unemployment running out,” he said. “We’re trying to pull in another employer to this facility and, just like everybody else in this region, we’ve really been concentrating on Volkswagen and its suppliers. Even if it’s not 400 jobs like we use to have, any new jobs would really help us out.”