Furniture company considers Weeks plant in Winston-Salem
WINSTON-SALEM, N.C. — The second attempt at breathing new life into the historic Weeks textile plant in Winston-Salem could involve a Mississippi furniture manufacturer establishing a major operation there.
The Winston-Salem City Council said in a public notice listed today that it will hold a public hearing May 19 at 7 p.m. to consider a request by United Furniture Industries for up to $150,000 in performance-based economic incentives.
In exchange, the Okolona, Miss., company would commit to create 200 jobs over three years and retain 47 that are at the 316,000-square-foot facility it is leasing in Union Cross Business Park.
It also would spend at least $5.8 million on capital investments on the 850,000-square-foot plant off 401 W. Hanes Mill Road. The operations in Union Cross would shift to the Weeks plant.
Often when an economic-development deal gets to the point of a public hearing, the odds are good for incentive approval and company commitment.
In this instance, however, the city acknowledges that United is considering options in Lexington and Randolph County, where the bulk of its Triad workforce is based, as well as in Michigan and Virginia. There likely are similar plants available in those areas from other furniture companies who have downsized or closed.
It would the first major inner-Triad economic-development recruitment scenario in several years.
“We are among a number of sites,” Mayor Allen Joines said. “The key thing to remember is that we follow our economic guidelines so as to not get into a bidding war.”
United has more than 460 employees in Lexington, where it is expanding an existing facility for storage. It also has operations in Archdale and Glenola in Randolph County.
Bonnie Renfro, president of the Randolph Economic Development Commission, said the county “was considered for a new construction project for United, but they are considering this alternative in Winston Salem now.”
Economic officials from Davidson County could not be reached immediately for comments on whether they have gotten to the incentive and public-hearing states of their negotiations with United.
The request submitted by Assistant City Manager Derwick Paige listed United wanting space for manufacturing, distribution and storage. It said it wants about 1 million in Class A space.
United said the jobs would pay an average salary of $28,420, plus benefits. The company said it would create the jobs over three years. The incentive package requires United to keep the expanded operations in Winston-Salem for at least 10 years. The incentives are subject to clawback requirements if the company fails to meet job creation and capital investment goals.
Joines said the city took into consideration in its incentive package the average wage that United wants to pay. “Lower incentives because of wage rates,” he said.
Gayle Anderson, president and chief executive of the Winston-Salem Chamber of Commerce, said the company would serve to enhance the community’s advanced manufacturing cluster.
The request said that Forsyth County is considering an incentive package, which it typically does with a major economic-development project with a matching commitment. About $300,000 in state incentives could be involved from the One North Carolina Fund since United is considering out-of-state options.
“The recommended grant exceeds the normal program guidelines, but given the immediate and long-term benefits of this project, staff recommends using proceeds from the Dell repayment fund to support this request,” according to the request.
The city and county clawed back the bulk of incentive money provided to Dell Inc. for not fulfilling its employment obligation during the first five years of its operations. Dell announced its plans to close the plant in 2009 and completed the shutdown in 2010.
Other Dell incentive clawback funds were used to successfully recruit Caterpillar Inc. and Herbalife Ltd. plants.
Although United is prepared to commit $5.8 million to upgrading the Weeks facility, some of the work already has been done by the plant’s current owner, Michael Bay.
Bay, owner of Merinos Home Furnishings in Mooresville, spent $3.2 million on the Weeks plant in 2013 as part of his goal of duplicating his home furnishings showroom there.
However, in November Bay confirmed that he was ending those plans because of struggles to get manufacturers and marketers to provide product to the proposed new store. He said at that time he wanted to lease the property to one or more manufacturing, warehouse or distribution tenants.
“I’m an optimist by nature, and so I look at this next direction as one that could benefit the local community even more if we can attract companies hiring hundreds more than the 100 to 200 we would have,” Bay said at that time.
When Hanes Hosiery Mills Co. opened the Weeks plant in 1960, it was the largest manufacturing plant in North Carolina. Hanes Hosiery spent about $30 million on the plant, which would be about $219 million in today’s dollars, according to calculations from the U.S. Bureau of Labor Statistics.
The east side of the Weeks plant was dedicated to knitting and research and development, while the west side served as an East Coast distribution center. Both sections have been gutted to bare walls, floors and support beams with a few office and restroom spaces preserved.
“It was a tired building that we’re giving a makeover to,” Bay said.
United’s aggressive expansion plans are not surprising, said Jerry Epperson, managing partner of Mann, Armistead & Epperson, a financial-services company based in Richmond, Va.
“It has a successful, well-funded owner and it is a low-cost supplier,” Epperson said. “That strategy has worked for them.”
Ray Collins, president of Collins Commercial Properties Inc. in Winston-Salem, said the Weeks plant site “provides easy highway access for warehouse distribution uses” along the East Coast.