GREENVILLE — Buy low, sell high. That’s what one investor taking advantage of low high-bid auctions on industrial property in Greenville is counting on.
As high bidder at the June 13 bankruptcy auction of the former Fruit of the Loom facility, Luther Oakes, president of Port City Trucking in Greenville, acquired the property for considerably less than its appraised value of roughly $3 million.
“When you get to an auction stage, you go into it without any expectations,” said an unidentified spokesperson for Fruit of the Loom, when asked if the bid was lower than anticipated.
The 244,00-square-foot building, on a 90-acre site located less than two miles from U.S. 82, features three artesian wells and its own sewage lagoon. The 445,000-square-foot parking lot has more than 300 parking spaces and 23 loading docks.
“A bargain’s not a bargain unless you make a profit out of it,” Oakes said. “I bought it to resell it and will put it on the market immediately. Hopefully, maybe somebody can use it in relation to supplying Nissan. It’s ready to be moved into.”
The ruling on the Greenville property was delayed when an after-auction bid $75,000 higher than the selected winning bid was submitted days after the auction ended. But the bankruptcy court rejected the late bid by Cascio’s Storage & Warehouse Inc. and a federal bankruptcy judge approved the sale to Oakes in late June.
“They were trying to get into the back door,” according to Oakes. “But it didn’t work.”
Since last December, four plants in Greenville have closed — Fruit of the Loom, Sewell Products, Cooper Tools and Cargill Industries — partly because of continued pressure from cheaper foreign markets.
Before then, three plant facilities had already closed and remain vacant — Cleaver-Brooks, Wolverine Tube Inc. and Schwinn Bicycles.
In April, Hager Hinge Co. added to Greenville’s woes when the company announced it would cutback operations and lay off its workforce of 115 employees, beginning July 6 and ending in early 2002. A community fixture since 1985, Hager Hinge officials opted to import residential door hinges rather than manufacture them. The same month, Heilig-Meyers Furniture Co. announced it would close its Greenville store.
To make matters worse, the U.S. Army Corps of Engineers is considering moving its Mat Loading Unit operations to Memphis. In a letter dated March 14 to U.S. Sen. Thad Cochran (R-Miss), Malcolm S. Kretschmar Jr., GRI, CRB, RIM, and Realtor for Kretschmar Realty, Inc. in Greenville, wrote, “The U.S. Army Corps of Engineers is threatening, seriously, to close the Greenville unit and incorporate this operation into the Memphis office. Greenville simply does not need this to happen.”
Greenville is not alone. Economic conditions have plagued similar cities. Yet, so far, only two states — Mississippi and Michigan — have plunged into recession, according to “The Kiplinger Washington Letter” dated June 8. “Some southern states are ailing…Mississippi, where furniture, textile makers are hurting,” the letter read.
Fruit of the Loom, once an employer to nearly 1,000 Greenville-area residents, initially seemed unaffected when its parent company, Chicago-based Fruit of the Loom Ltd. (NYSE: FTL), filed for Chapter 11 reorganization in December 1999. After all, no sewing took place there; it was strictly a production facility with knitting, bleach dye and cutting production lines. Vacant since Jan. 15, the Greenville property was costing Fruit of the Loom $54,000 a month in utilities, taxes, insurance and other costs.
Other industrial properties remain on the market. Originally listed at $1.15 million, the 69,000-square-foot Sewell Products facility, located on 8.5 acres on Theobald Street in Greenville, was reduced in May to $975,000 or best offer.
“The clients have instructed me to notify anyone interested that the ownership corporation is willing to take a loss on this sale and all deep discount offers will be considered,” Kretschmar said.
Johnny Morgan, a Realtor with Binswanger Co., a national industrial brokerage firm, said the 60,000-square-foot Wolverine Tube facility, used to build tubing for refrigeration and similar products, is being marketed as “an excellent location for a light metals fabrication business.” Located on 12 acres in the Greenville Industrial Park, Morgan said the price, which was not disclosed, was negotiable.
The Cleaver-Brooks building, where heat exchangers and large industrial boilers were made, is being marketed to companies that need heavy cranes. The facility, which sits on 25 acres, measures 24 and 30 feet high in some areas. It comes with several heavy bridge cranes, from five to 30 tons, Morgan said.
“The owners are very interested in selling,” he said.
About 75 workers were affected when Nicholson/Cooper Steel ended production of its bandsaw product line and rationed the production of its hand hacksaw product line to facilities in Colombia and Mexico. Because of a long-term commitment with the Washington County Industrial Foundation, the company will advertise the 325,000-square-foot facility for subleasing in early July, said an unidentified company spokesman.
Cliff Nash, director of the Mid-Delta Regional Airport in Greenville, said a 31,000-square-foot paint facility and a 210,000-square-foot maintenance modification hangar with offices and a cafeteria and about 15 acres of ramp space and a height of 43 feet — both built to Boeing Aircraft specifications — are currently unoccupied. The buildings can be leased or sold, separately or as a pair.
“Having a maintenance facility and painting facility so close together allows the two to operate in tandem with each other,” Nash said. “Often the painting brings in maintenance work and vice versa. One draws on the other.”
About 100 jobs were lost when ACH Food Companies, a subsidiary of Associated British Foods, PLC, closed its Greenville rice-processing plant. The plant is located in the former Cargill facility near the Greenville Harborfront Industrial Park.
“The available square footage in Greenville is higher than in recent years, but at the same time it offers some very attractive advantages to companies needing facilities,” said Tommy Hart, executive director of the Washington County Industrial Foundation. “They are all first- class facilities that have been recently renovated and are ready to go. They have been well maintained.”
Yet business leaders remain optimistic, pointing out provisions in the Advantage Mississippi Initiative, passed by legislators in a special session last summer, that will facilitate marketing the facilities, Hart said.
“The initiative program is central to us developing a good competitive posture with these companies,” Hart said. “It’s one of the primary incentives to help us rebuild the use of these buildings.”
Hart said nearly a dozen companies are looking at purchasing the vacated properties in Greenville. “There is a good activity level and we’ve had good expressions of interest,” he said. “We’ve got some due diligence underway and hopefully in the near term we can turn these properties around. Of course, any project of this nature takes several months and sometimes a year to get back into operation.”
Washington County recently received designation as a GAP Community Zone, in which new industries are exempt from taxes, with the exception of school taxes. To qualify, GAP counties must have unemployment at 200% or greater than the state’s average unemployment figures for the previous 12 months.
“Having a virtually tax-free zone existing in this county is an excellent tool and an added incentive for companies to consider this community and
erties we have available,” Hart said. “On top of that, we have manpower available and excellent training available to meet the needs of anyone.”
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