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COVER STORY, FEBRUARY 2010
RESUSCITATING DISTRESSED
Panattoni Development and the city of Hazelwood join forces to redevelop a shuttered auto assembly plant.
Amy Bigley
Shuttered and vacant properties are currently an unfortunate, but common, sight across the Midwest and the country. Such properties leave developers and municipalities itching to find ways to rejuvenate a once fruitful cityscape, resulting in many brownfield and remedial redevelopment projects popping up across the Midwest. The city of Hazelwood, Missouri, and Panattoni Development Company have joined forces to create Aviator Business Park, a business oasis from the shadow of a recently closed auto assembly plant in Hazelwood.
Once a stronghold and strength for the community, the city of Hazelwood received a hard blow when Ford Motor Company shuttered its auto assembly plant in 2006. Ford filed a petition to create the city, which was formally incorporated in 1946. Comprising the largest workforce in the city and contributing more than 18 percent of the city’s tax revenue, the plant’s closing has had a profound effect on the community. During the final months before the company shuttered the plant, Hazelwood officials petitioned to have the plant remain operational for the benefit of the community. The city’s last request was to have the shuttered and vacant property purchased by a developer in an effort to regain an economic stronghold in the market.
Sacramento, California-based Panattoni Development Company acquired the 160-acre site 2 years after it closed. To reinforce Hazelwood’s pro-business stance, the city negotiated a 25-year, Chapter 353 tax abatement incentive package with Panattoni for the entire site. The incentive package, which helps to pass along savings to users during the 25-year abatement window, will be a big draw for the park.
“The city of Hazelwood’s cooperation has been a major positive for the project,” says Mark Barnstetter, a senior vice president with Panattoni Development Company. “Hazelwood has been a true asset and partner since the beginning.”
The tight-knit cooperation between the city and developer has led to fast-tracked planning and redevelopment of the 3.3 million-square-foot structure and site. Aviator Business Park, the multi-phased project, is currently undergoing demolition and site work before the vertical development commences. Branstetter notes that all of the existing structures are being razed, as the buildings were built for a single-use and offered no options for re-adaptive reuse. Although the structures are being demolished, the development team is determined to be as environmental conscious as possible and Panattoni is recycling 95 percent of the original 3.3 million-square-foot structure. Through this effort the company has recycled 50,000 tons of steel, 7,500 tons of copper and stainless steel and 450,000 tons of concrete and masonry that will be re-used for road beds and building pads.
The former assembly plant has handed Panattoni numerous challenges and unique benefits. The site’s infrastructure is strong and extensive, it offers Norfolk Southern rail spurs; a mega power supply, including one 35 kilovolt and two 12 kilovolts of electrical service with the capacity of providing in excess of 26 million volt amps; significant gas, water and sanitary services; and communication services, including fiber and telecom service.
The site is quickly becoming a diamond in the rough for Hazelwood and Panattoni. Testing found that minimal environmental issues existed on the 160-acre site, and some parcels are even safe enough for children playgrounds and crop growing. The $250 million, 2.7 million project is envisioned to be a mixed-use business park, offering build-to-suit options for light manufacturers, data centers, distribution operators, hotels and office users, even retailers have expressed interest in the new project. Panattoni has planned a 5- to 7-year build-out window for the development, which is being funded by Prudential Financial.
“The redevelopment agreement established between the city of Hazelwood and Panattoni has been a good framework for a successful business relationship,” says David Cox, economic developer with the city of Hazelwood. As with any relationship a little give and take is expected, but the lines of communication between Panattoni and the city have remained open and updates are received on a regular basis.
The project is bringing a new opportunity to Hazelwood and the surrounding communities. Supported by an extensive infrastructure, Aviator Business Park is a blank slate for future development and expansion. The project is being developed to attract a broad mixture of tenants, which offer flexibility and endless opportunities. These opportunities are anticipated to bring back the workforce and community growth that was lost after Ford left.
As many cities continue to face vacant and closed properties, Aviator Business Park is an example of a city’s determination to not be left with a shuttered and scarred cityscape and a developer that is willing to take on the challenge.
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