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Northampton: What’s Next?
County puts its eco-industrial park up for sale
By Ceri Larson Danes


Ted Shockley Photo
A commercial real-estate agency is listing the Sustainable Technologies Industrial Park in Cape Charles at $5.4 million — about $1.6 million for the 30,000-square-foot building (above) and 16 acres, and $30,000 per acre for the remaining 128-acre parcel.

CAPE CHARLES — Tom Harris still believes in the eco-industrial park he helped create, even if it has not developed the way he’d hoped.

Harris, who was Northampton County administrator in 1996 when county leaders used painted gold shovels to break ground on the 144-acre parcel, sees the sale of the county’s Sustainable Technologies Industrial Park as an important next step in bringing jobs and business to the area.

Harris had left Northampton by 1999, and today, after using millions of dollars to plan, build and market the park, the facility and acreage are officially for sale.

Harris, who now is the town manager of Clifton Forge, a city near Roanoke, feels selling the property is a good move.

“It was an enormous amount of effort, especially in time, and it did generate real interest in the community,” said Harris, who added that detractors could not see advantages in creating the environmentally friendly park.

“But we may have finally primed the pump of private investment.”

The property has been listed with Thalhimer, a commercial real-estate agency with offices in Virginia Beach that is a member of the Cushman & Wakefield worldwide network.

The firm has priced the property at $5.4 million — about $1.6 million for the 30,000-square-foot building and 16 acres, and $30,000 an acre on the remaining 128-acre parcel.

Last month, board directors of the Joint Industrial Development Authority of Northampton County and its Incorporated Towns agreed to offer the property for sale to private developers and to enlist the help of professionals in the process.

Depending on the source, the park always has been for sale.

“All business parks are created to be sold,” said Greg Manter, director of the Eastern Shore of Virginia Economic Development Commission, in an e-mail to the News. “The IDA doesn’t have the financial ability to build the infrastructure for the rest of the park, so bringing in a private developer was inevitable.”

The IDA never directly sought assistance from a firm specializing in niche marketing and business development, and a lack of sufficient interest from prospective eco-industrial tenants led to the decision to sell.

Whether that failure results from an inadequate marketing effort, a short-sighted approach or other factors has been hotly debated.

The IDA initially asked its staff to identify and attract environmentally friendly companies to the economically depressed and geographically remote area. In 2000, a commercial real-estate brokerage was retained for this purpose and reaped no results in terms of tenants.

Hindrances to success may also involve the extensive covenants and restrictions attached to any use of the park.

IDA Chairman Harrison Wehner said the restrictions are “laborious and extremely complicated” and include more than 60 pages of legally worded required accommodations.

A retired economist, Wehner said established businesses already have operating procedures and cannot meet these requirements without burdensome costs.

In addition, the long list of allowable uses ranges from emergency-services stations to radio and television studios and includes medical offices, post offices, hotels, museums and more.

“There is a misconception (that) because it is an industrial park, all the allowable uses are industrial,” IDA board member Rick Hubbard said. “But that is not the case.”

Plans for a park

It was during the recession of the late 1980s that county leaders began to address plans for an industrial park that would alleviate the economic woes of an area hard hit by staggering job losses.

Northampton County was in a decline that would make it one of the most impoverished areas in the country and the poorest in the state.

Since 1992, a total of $8.5 million has been committed to the development of the park.

Some of that money — $2.5 million — is in the form of debt taken on by the county through the sale of general obligation bonds in 1998.

The debt service on the bonds — the payment of principal and interest — along with operation and staffing expenses, brings total taxpayer cost to about $250,000 annually.

The remaining monies were funneled through a variety of federal, state and local sources, including the Environmental Protection Agency, U.S. Fish and Wildlife Service, NOAA’s Coastal Resource Management Program, the United States Department of Agriculture, the governor’s office and the Eastern Shore of Virginia Economic Development Commission.

Wako Chemical USA currently leases about 20 percent of the building at the park and is the only tenant. Later this summer the group hopes to increase to about 50 percent of the space if a plan to relocate a laboratory facility from St. Louis is approved.

Although considered a potential buyer earlier, Wako, which takes blood from horseshoe crabs for research, is no longer expected to extend a purchase offer.

Over the years, there have been a number of companies expected to lease significant portions of the facility. In nearly all those cases, the leases never materialized.

Commitments repeatedly dissolved from Energy Resources, Inc., a Norwegian company that initially planned to lease 27,000 square feet in 1999, Solar Building Systems and ProVento, a windfarm business.

Still, in its corporate magazine, the consulting firm responsible for the park’s master plan enthusiastically claimed in 1998 to have been a leading instrument of dramatic economic revitalization in the town and Northampton County under a story headlined “Saving Cape Charles.”

Plenty of interest

Sam Walker, a commercial real-estate agent with Thalhimer, said that there is a great deal of interest in the park. The improved amenities and housing opportunities enhance its marketability, he said.

All offers will be brought to the IDA board for consideration. Walker said offers will be assessed primarily on the dollar amount, contingencies and the proposed timing. In essence, park representatives are seeking the highest bidder, but also the least complicated offer that can be executed the quickest.

The timing of any transaction is a very individualized process and the sale of an industrial property “can take a long time,” Walker said, especially since multi-million dollar deals are inherently more complex.

“But this could go quicker,” he said, if current interest is any indication.

Thalhimer has been working with “several very interested parties” and has been showing the property. “Buyers who have come to the table understand it is essentially a buffer between Bayshore Concrete, the Coastal Dune (Natural Area Preserve) and the Bay Creek resort, and that there is a need for something compatible,” he said.

Dickie Foster, developer of the adjacent property at Bay Creek Golf and Marina Resort, is one potential purchaser whose offer will be considered by the IDA at a meeting at the end of the month.

“I don’t need another hundred acres,” said Foster, whose resort development approaches 2,000 acres.

What he does want, however, is an attractive, productive and inviting harbor for the town, and he wants the park back on tax rolls.

“It should not be done piece-meal,” he said.

Rather, if he is successful in his bid for the park, he would work with the town and others to rethink the plan.

“It needs to be done collectively, and not in a vacuum,” Foster said. “The key is to sit down with professional planners and come up with what the future of the town and the harbor will look like.”

He said all stakeholders should be included in the process, and that he already has begun talks with an adjacent property owner, as well as the board of the Eastern Shore Railroad, to create the integrated harborfront he envisions.

Foster said Tom Gallagher, who recently purchased a nearby 20-acre harbor parcel for $3.2 million, is interested in working together toward a collective vision.

“He agrees that whatever we all do, it needs to look like it belongs there,” Foster said.

“The end-game exit strategy is to sell the property, put it in professional hands, and in so doing, we should be able to meet the original goals,” said Wehner, who said the IDA board is not composed of real-estate experts and does not have money to hire a CEO or business developer.

Meeting those goals “will greatly enhance the tax base of Cape Charles and the county and hopefully create the employment opportunities we haven’t been able to.”

The investment of federal grants and tax dollars will pay off, said Harris, the former county administrator.

“The work we did has begun to engage the private sector,” he said.

Originally published Saturday, May 8, 2004