EAST MILLINOCKET, Maine — When General Motors pulled out of its Fisher Body automotive plant in Comstock Township, Michigan, in 1999, it left an aging 2-million-square-foot box — at the time, the largest vacant industrial space east of the Mississippi River.
“You walked into it and it was this huge cavernous empty thing. There was nothing there,” Comstock Township Town Clerk Anna Goodsell said Thursday. “The floor was made up of blocks of wood covered with tar and petroleum product. Even that was not a usable surface. It was ugly. We called it the ugly blue building.”
Today, the 1.6-million-square-foot space is two buildings. Called Midlink Business Park, the facility is about 85 percent occupied with businesses. Its tenants include Kenco Logistics, General Mills, Stryker Medical, Airgas, Hark Orchid, Seneca Medical, Courtyard Suites Hotel and Kaiser Aluminum, Goodsell said. About 160,000 square feet remains unoccupied.
East Millinocket officials hope that Midlink owner Hackman Capital Partners of California can perform the same kind of turnaround with the former Great Northern Paper Co. mill. The California-based industrial real estate investor was expected to close its $5.4 million deal to buy the mill on Friday or Monday.
Hackman outbid four other investors on Tuesday to secure a federal court judge’s approval of the looming GNP transaction. A Hackman Capital vice president impressed town leaders by meeting with them on Wednesday despite the $5.4 million deal not yet being complete, stressing the company’s versatile approach to redeveloping aging manufacturing sites.
“I think that is a really good gesture. They are opening a line of communication with the town,” said Mark Scally, chairman of East Millinocket’s Board of Selectmen. “Why would they talk to us if they were just coming in to grab stuff? They are not carpetbaggers. That meeting shows that they feel some responsibility to the town and the people. It is still a business, let’s face it, but they are a business with a good purpose.”
Rethinking building uses
Jill Bland, executive vice president of Southwest Michigan First, an economic development agency that has worked with Hackman repurposing the former auto plant since it closed in 1999, said the company might follow in East Millinocket the same course it charted in Michigan.
Hackman “spent the first year trying to find a potential user of everything left intact by GM. Meanwhile, they were evaluating what the options would be should they not be able to find one,” Bland said. “They brought in a slew of experts to help us develop different alternatives to developing the facility, and they involved the community with them as a partner.”
“They really changed the look and feel of the building, modernized it,” Bland added.
Hackman officials haven’t returned telephone messages and emails left since Tuesday, although a Hackman public relations representative offered to answer a list of questions submitted by email on Thursday afternoon. According to Hackman’s website, hackmancapital.com, the firm invested $60 million into Midlink since 1999, although Bland and Goodsell say that some of that funding probably includes state and federal grants.
Hackman disposed of or sold 35 years of machinery or debris from the site, including 700 tons of scrap metal, and turned the facility into a multi-use development that includes 88 acres of industrial space, a 41-acre retail area, 38-acre office campus, a truck plaza and rental spaces as small as 25,000 square feet, its website states.
Hackman took full advantage of Michigan economic development tax incentive programs, including one that left the property tax-exempt for 12 years, Goodsell said.
“They have done a tremendous job,” Goodsell said. “They have added jobs back into the community and added back in … some high-tech industry that will be more sustainable over time. They have recruited international businesses. They have made huge investments in infrastructure, in public roads and water and sewer systems, to make all these other developments possible.”
As an example: The company invested $10 million in road building and repair within the site in conjunction with a federal Community Development Block grant that provided $3 million. The company also drew Hark into its first venture outside Germany, she said.
The rebuilding took more than a decade and a lot of work involving Comstock Township officials, whom Hackman treated as partners, Bland and Goodsell said.
“They thought outside of the box. They thought about what would best benefit a community and they have been very creative,” Bland said. “The downside, and I don’t know if this is their fault, was that they were more interested in selling the equipment in approximately the same time the market got flooded with a lot of like equipment. That might have delayed us from going to that next step, but they stayed with us, with the project. They stayed there and are still here.”
The division of the GM stamping plant into two buildings in 2003 and 2004 “was really the moment of rebirth,” Bland said.
“Once we decided that we weren’t going to find somebody to use it, we had to sell the equipment,” she added. “Once they made that decision, we worked on plans of what are we going to do. We looked at all the tools the community could bring to the table to help that cause, and then it was leased up in sections from there.”
Other projects
In partnership with Rabin Worldwide and Capital Recovery Group, Hackman bought a former Campbell’s Soup factory in Sacramento, California, for an undisclosed price in December 2013. Hackman bought an industrial real estate portfolio of 42 warehouses and distribution centers — about 2.5 million square feet — in Franklin County, Ohio, for $32 million in mid-2012, officials said.
Brian R. Ball, a reporter covering commercial office and industrial real estate economic development for Columbus Business First magazine, gives Hackman good marks for its ability to remarket its Franklin County holdings.
“They have been selling some of the smaller properties to tenants [who were already in the warehouses] as part of their thing and they are also taking properties that are not so full and leasing them up,” Ball said. “I would say they have been very successful, especially on the handful of tenants that they have sold to.”
Hackman hasn’t yet had much success recruiting businesses to the 129-acre Campbell’s Soup site, which is now called Capital Commerce Center, said Troy Givans, director of Sacramento County’s office of economic development and marketing. Hackman has cleaned up the site somewhat, and auctioned “some existing equipment no longer needed, to start remarketing it as an industrial site.
“Our experience is that they have been very active in re-tenanting the site. They have coordinated with our department and the county very well,” Givans said.
Hackman helped convince Silgan Containers, a manufacturer of cans for soups and vegetables that Campbell’s had lured to the site before the sale, to remain. That retained about 100 of the approximately 700 jobs lost with the factory’s closure, Givans said. “They were actually going to move to another facility,” he said.
Hackman and county economic development officials believe they will generate 600 new jobs at Capital Commerce within 24 months, Givans said, with new tenants possibly coming in to the site in the first quarter of next year.
Goodsell cautioned East Millinocket residents to be patient with — and to participate in — the redevelopment process with Hackman. Trust and teamwork will be required, she said.
“People were hopeful when somebody actually bought that building,” she said of Midlink. “Maybe something was going to happen. Just the purchase of it brought some hope. But people were skeptical. What were people going to do with it? It was eight to 10 years before things started to turn around. It’s been gradual, but I would say they have proven their stuff. It has taken some time, but they have done what they said they were going to do.”