Potential improvements on Akron Drive could bode well for future use of Whitaker Park
WINSTON-SALEM, N.C. — Behind the real-estate mantra of “location, location, location” is a sobering make-or-break message for commercial, industrial and residential deals, according to the Winston-Salem Journal.
For almost five years, the Whitaker Park manufacturing campus appeared to have fallen on the break side of that equation.
R.J. Reynolds Tobacco Co. said in May 2010 that it was closing the 790,300-square-foot plant as part of moving all manufacturing production to its 1 million-square-foot Tobaccoville plant. Most production was shut down by mid-2012.
A white-elephant future loomed considering that what was once the world’s largest cigarette plant was built in 1961 for one purpose, for one owner. Even though the campus is about a mile from U.S. 52, not being adjacent to an interstate exchange had proven to be a major obstacle for attracting a company or investor.
Whitaker Park’s fate may have flipped 180 degrees with Wednesday’s news that Reynolds donated 120 acres and 1.7 million square feet of space on the campus to Whitaker Park Development Authority Inc., or WPDA. The group is a nonprofit 501(c)3 corporation created in April 2011 by Winston-Salem Business Inc., the Winston-Salem Alliance and Wake Forest University to take on the daunting redevelopment challenge.
The donation is the first of what is hoped to be the tumbling of several economic dominoes.
The next could be the nonprofit group submitting a feasibility study to transportation officials with the city of Winston-Salem and N.C. Department of Transportation.
Reynolds’ plan to transfer the donated property over a 12- to 24-month period was designed in part to give the nonprofit group time to set its redevelopment priorities and begin lobbying for DOT financing.
The study is likely to make a recommendation for road improvements on Akron Drive from U.S. 52 to the Whitaker Park campus off Reynolds Boulevard.
The most promising project could be extending Akron from where it dead-ends at Indiana Avenue through the east part of the campus, potentially taking a dogleg left to connect with Shorefair Drive. Bob Leak Jr., president of Winston-Salem Business, said an Akron Drive extension is one option being considered.
Officials involved in the project say it will take months, possibly up to two years, for the resurrection of the plant and campus to begin rippling through the local economy. The goal is making the campus a magnet for manufacturing, industrial, warehousing and distribution operations, but also possibly retail and residential, Leak said.
Mayor Allen Joines said that based on the economic modeling already done by the nonprofit group, “we believe that 10,000 to 15,000 new jobs can be created in the repurposed Whitaker Park area.”
To put that projection into context, Whitaker Park had more than 2,000 workers at its production peak.
What the Akron Drive extension would do primarily is allow vehicles, particularly tractor-trailers, to avoid the two tight turns from Akron past Northside Shopping Center and onto Reynolds Boulevard.
The ancillary, and perhaps more vital, community benefit would be providing an easier entrance into the Whitaker Park campus, the neighboring Wake Forest athletic complex off Deacon Boulevard and into the university campus from Business 40 and the Northern Beltway portion of Interstate 74.
“The Akron Drive extension is a critical part of the redevelopment of the property,” Joines said. “We will be actively seeking a partnership with the state to move this project forward.”
DOT money may be there
What makes the Akron Drive proposal attractive is that there is up to $10 million of annual DOT financing dedicated to projects just like Whitaker Park, said Pat Ivey, the state DOT division engineer for the area that includes Forsyth County.
“The legislature and the DOT have set aside funding for road improvement projects that have direct economic-development and time-critical, job-creation opportunities,” Ivey said.
The most any project can receive is $5 million.
The projects are judged on:
• Average projected wage for the business versus the average wage for the county in which the project resides;
• Economic vitality of the county where the business will operate, with special consideration potentially given to more economically depressed counties;
• Size of the initial investment by the business;
• Tax benefit to the state;
• Number of employees;
• Amount of support for the project from local governments and/or Metropolitan Planning Organizations.
One local example of a DOT project was the expansion of the entrance and exit ramps on U.S. 311 and Bypass 40 to better handle the tractor-trailer traffic on Temple School Road, initially for the Dell Inc. plant in southeastern Winston-Salem. Benefiting now from the projects are the Caterpillar Inc. and Herbalife Ltd. plants.
“We expect to have a meeting with the Whitaker Park developers to see what kind of roadway improvements they have in mind,” Ivey said.
Although there has been no project for DOT to evaluate, Ivey said “it certainly could become a priority now that the donation is official.”
The city’s contribution is likely to come from a pot of money that became available when voters approved a $139.2 million bonds and capital needs referendum in 2014.
Of the $25 million approved for economic-development projects, $20 million was set aside for business park land purchase and infrastructure. City officials cited redeveloping Whitaker Park as an example of a viable project “for creating jobs and expanding the tax base.”
What to do with railroad line?
There is a fresh example of city and state DOT cooperation on a roadway project with economic-development implication.
Research Park Boulevard opened in October 2013 as a four-lane divided highway about seven-tenths of a mile long. The parkway runs between Rams Drive (Stadium Drive) and Third Street, passing under Business 40 through the center of Wake Forest Innovation Quarter, which got its start in Winston-Salem’s district of old tobacco factories and associated buildings.
The city and Forsyth County split the $8 million construction cost with the state DOT. Some of the funds used to build the road came from the $26.5 million in local incentive repayments from Dell after the closing of its plant in November 2010.
“We see it as both a road to provide connectivity between Rams Drive and the area of Linden and Third, as well as a road that provides development opportunities to the east and west,” said Greg Turner, assistant city manager.
Transportation officials say the road will form a new crossing between streets to the north and south of Business 40. When a southern extension of the new parkway is completed in 2015, it will play an important role in moving traffic in the area of Business 40 downtown, which will undergo a major renovation starting in 2016.
Eric Tomlinson, president of Wake Forest Innovation Quarter, said in October 2013 that the new parkway was a “road to the future” because of the potential for development. “’It gives us even more opportunity for envisioning what can happen in that Central District,” he said.
Ivey expects the cost of the Akron Drive project would be much less than $8 million, although there is a major roadway challenge to tackle with the railroad line that runs along Indiana Avenue.
Ivey said that DOT engineers could decide to dig a road underneath Indiana or install a bridge over Indiana. The latter option could come with a cost approaching $5 million, Ivey said.
“That’s likely to be the biggest question — what to do with the railroad line,” Ivey said.
A challenge to market
Michael Clapp of Michael S. Clapp & Associates, a real-estate appraisal company in Winston-Salem, said the biggest challenge with redeveloping the Whitaker Park campus is that “it was not meant to be a multiuse, multitenant building.”
“That’s why the Whitaker Park plant will be a challenge to market and probably take years to absorb.”
Clapp said the keys will be “how adaptable Whitaker is for general industrial, distribution or warehouse use, how much it will cost to improve its adaptability, who will pay for it, and then who will find it attractive.”
“The manufacturing building represents a significant amount of space that would need to be studied as to how it could be converted to educational uses,” he said. “As an alternative, perhaps it could be sold as is to a user.”
Leak said he is confident the campus will attract developers and site selectors, in part based on two recent success stories:
• Herbalife buying the 800,000-square-foot Dell plant as part of a $130 million investment for an East Coast manufacturing operation and a pledge of 493 full-time jobs;
• United Furniture Industries leasing the 850,000-square-foot former Weeks textile plant off 401 W. Hanes Mill Road, where it plans to invest between $5.2 million and $11 million, and create 200 full-time jobs over three years. The company has an option to buy the plant.
“There is again a shortage of industrial space in our community, which is a good problem considering where we were in 2010-11 with 2.4 million square feet of available industrial space in three buildings,” Leak said. “But, it’s obviously a challenge in terms of future economic recruitment that Whitaker Park can now address.”
Ray Collins, president of Collins Commercial Properties Inc. in Winston-Salem, said “the longer the window of opportunity, the greater chance of success with N.C. DOT.”
That being said, Collins said the road project will be “wholly dependent on who is asking” for the Whitaker Park campus.
“If it is a new big user coming to market, or a large expansion of employment of existing user in the market, making the demand, it is possible in 2016 even though N.C. DOT is not flush with cash,” Collins said.
“Solution would have to be creative or tied to N.C. DOT budget year, and the request would have to be user-driven and a sharing of costs.”
Collins said that “often the difference between one community successfully recruiting new business, and another not, is having viable location alternatives in place, either in the form of raw land or existing buildings, to accommodate the needs of the relocation in a timely manner.”
“Having 120 acres of commercial and industrial land for development and/or redevelopment, together with 1.7 million square feet of existing facility, speaks for itself as to available assets for immediate and adaptive re-use.”