A California company that acquires and converts abandoned industrial sites has paid $1.5 million for the sprawling former Kaiser-Mead smelter operation in north Spokane.
New Mill Capital LLC plans to convert some of the remaining buildings on the 183-acre site into usable industrial locations for new tenants, said Gregory Schain, executive vice president of New Mill. Other former Kaiser buildings, including the massive buildings holding aluminum potlines, will be gutted and torn down, Schain said.
New Mill is a subsidiary of Industrial Realty Group LLC. The IRG website lists a portfolio of more than 50 million square feet within 70 projects across the United States.
Kaiser shuttered the plant in 2000 after producing aluminum there for more than 50 years, at times employing as many as 1,200 workers.
In 2004, St. Louis-based Commercial Development Co. Inc. bought the land for $7.4 million and sold off all the plant’s industrial metals and most of its smaller pieces of equipment. CDC has tried to sell the property for the past seven years.
“In that time I’ve had at least 10 serious offers from would-be buyers, and this one finally closed,” said NAI Black commercial broker Earl Engle, who represented CDC.
The plan is to turn the site into an industrial park, Schain added. “It has a north-south freeway nearby. It has power and water … it has the infrastructure already there to make this a world-class location,” Schain said.
The property also has an assortment of industrial hoists and cranes that remain. Those will also be sold off, said Tom Messmer, vice president of special projects for New Mill.
The sale does not affect Kaiser’s other operation, the Trentwood rolling mill that continues to produce aluminum sheet and plate for use in airplanes, auto parts and construction equipment.
Schain said a first step will be to convert roughly a half dozen smaller buildings and try to lease them to industrial or commercial customers. Those buildings have water and electricity and other services, he said.
All told, the Kaiser property has 262 buildings – from a massive potline building with more than 540,000 square feet of space and two support structures, each with 190,000 square feet, to smaller buildings in the range of 10,000 square feet.
IRG is considered a leader in converting and leasing unused industrial property. In 2001 the company bought Sacramento’s abandoned McClellan Air Force Base and later converted it into a business park.
It also acquired the former 174 acres used by Maytag in Jasper County, Iowa, when that company closed in 2006. A large portion of that property was converted into a site used by Trinity Structural Towers, a major producer of wind turbines.
Once they buy large sites, IRG and New Mill seldom sell off the properties, said Messmer.
Engle and others have said residual chemical and industrial waste on the Kaiser site has discouraged some would-be buyers. New Mill, however, looked at the location and saw that the key concerns were only in the buildings, not in the land itself, Messmer said.
The most contaminated part of the Kaiser site, 38 acres on the northern part of the property, has been set aside and was not sold. That land is under state management.
Another 415 acres on the north side of the Kaiser site also was not sold. Kaiser retains ownership of that parcel, hoping to create a mixed-use development.
Messmer said New Mill learned that many of the former Kaiser buildings contain asbestos affixed to galvanized walls. Some buildings with asbestos, such as the large potline structure, will be removed. The asbestos materials will be taken to a landfill in Arlington, Ore., on the Columbia River.
Some of the buildings with asbestos or other contaminants will be remediated on site, Messmer said.
“We have very good environmental due-diligence people,” Messmer said. “This is something we know how to do very well.”
Schain added that New Mill will hire a civil engineering firm to prepare a long-term development strategy for the property.
Both he and Messmer said the industrial zoning of that land, plus the shortage of space for industrial parks in Spokane, set the stage for the Kaiser land to become sought-after by industrial tenants.
“This is the kind of site that will create jobs,” Messmer said.