South Charleston Helps UC Market Vacant Land
- Release Date:Thursday, July 22, 2010
City looking for developers to occupy former Building 82 site
by George Hohmann
Charleston Daily Mail Business Editor
CHARLESTON, W.Va. The city of South Charleston is mounting a campaign to help the University of Charleston sell the property formerly occupied by Dow Chemical's Building 82.
"With the exception of Watt Powell Park, I don't know that there's a better piece of property in Kanawha County," said Mayor Frank Mullens. "I'm confident we'll get some activity on that property soon. It's just a matter of getting the right person with the right idea."
The city hired ZMM Architects & Engineers to draw a concept showing how the property might be developed. Bob Anderson, the city's business recruiter, has talked to businesses that have expressed an interest in portions of the property. He's now trying to interest commercial real estate developers.
The Dow Chemical Co. gave Building 82 and the 6.8-acre site on MacCorkle Avenue to the University of Charleston in 2006. Ed Welch, the university's president, said that while Building 82 was still standing, about four serious prospects approached the university. One or two submitted written offers but the offers "were lower than what we thought the property was worth," he said.
"The advice and feedback we'd gotten from people who were interested was, if the building wasn't there the property would be easier to sell and more valuable because it would reduce the risk and liability of the purchaser."
The university had the building imploded in March 2009. It is asking $3.5 million for the now-vacant land.
Right after the implosion the university received an offer but it, too, "was not at the level we wanted," Welch said. "Initially I think some people were hoping they could get a deal, turn it over and make a nice profit themselves."
It cost about $1.8 million to implode the building, "so now we have an investment in the property," Welch said. Before the implosion, when the university was pondering what to do, it kept the building heated and ready for a potential occupant - which cost money. Also, "you've got to mow the grass, keep it looking neat and tidy, so the carrying charges were not insignificant."
The implosion occurred about the same time the national economy was going into a deep recession, "which put a damper on a number of projects," Welch said. "One consequence is the banks are reluctant to do commercial loans right now. So some loan financing has dried up. We certainly hope that's a short-term situation because the banks say they have loan money available and they're ready to make deals.
"The neat thing is we want to sell, and the mayors of South Charleston and Charleston have agreed it would be great for us to sell," Welch said. "South Charleston wants us to sell because they want enterprises there. Charleston wants us to sell because they don't want us to build in South Charleston - they want us to stay in Charleston.
"Given the evolving circumstances, we have of course looked at beneficial ways to use the property," Welch said. "Our first choice is to sell the property, use the revenue to assist us in meeting university priorities, and let it become a beneficial piece of real estate for South Charleston."
Welch said the university has considered selling the property in pieces. "The advice we've gotten and our own insight is, we didn't want to be doing pieces. The first buyer wants the best piece, the second buyer wants the second-best piece and so on, so if you can't put it all together yourself, it's probably not advantageous to do that."
However, "If five people came to us and said they want this, they want that and we knew we could do it all at the same time...but we're not really in the property development business. That's not our expertise."
Asked if $3.5 million is the university's best price, Welch said, "It's the price we're seriously holding onto. We're not trying to put something out there and then negotiate to the middle.
"It's not responsible for me to take an asset Dow has given to us and just give it away so someone else benefits," Welch said. "There ought to be a benefit to the university for the gift. I need to protect what that charitable benefit is. So I'm neither trying to be unreasonable and hold a price over people's heads that's unrealistic nor do I want to convert a charitable asset into a business profit in an irresponsible way."
Welch said Mullens has been "extraordinarily helpful, cooperative and supportive in everything we've done. He's been consistently open and collaborative. I'm very appreciative of that. And Bob Anderson is an entrepreneur par excellence."
Anderson said, "We feel this is a good buy due to the fact Dow had an appraisal on this property of $7 million.
"This property has umpteen advantages: no structures have to be removed; the site has utilities; it is on MacCorkle Avenue, which 10 million people travel each year; it's close to the Interstate 64 on- and off-ramps; it's close to three hotels; and it is within walking distance of downtown businesses, the library, post office and restaurants. We'll also throw in two apple trees on the property that are loaded with apples."
Fourth Avenue currently divides the property. Anderson said, "The mayor has said that if someone wanted to buy the property and has a project that benefits the city, the city would consider closing Fourth Avenue to make the property more valuable for the city and the purchaser."
Anderson said that to his knowledge there are no environmental issues related to the site. He said concern about the site being across MacCorkle Avenue from Dow's chemical plant have diminished in recent years as the chemical company has downsized and demolished many structures.
Representatives of Sport Mart, Fifth Third Bank, BB&T Corp. and Dollar General have looked at the property and expressed interest in acquiring lots, Anderson said. "I just don't have a buyer for the whole piece of land," he said.
The city of South Charleston owns and operates a community center, ice rink and country club. Mullens was asked if the city has considered buying the university's property.
"We did consider it, but to be honest our focus is paying off debt," Mullens said. "The price tag is a little steep for us at this time. Once we get some bonds paid off, we may be a player. But we would much rather see someone in the private sector take off with it."
