Economic Development and Real Estate

Land bank close to selling former Sparta Foundry site

June 14, 2013
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Although the European manufacturer that was interested in buying the former Sparta Foundry site has decided to go in another direction, the four-acre parcel at 252 Gardner St. may have a new owner soon: a Canadian redevelopment firm.

The Kent County Land Bank Authority, which took possession of the tax-foreclosed property early last year, has been working closely with Blueforest Ventures Inc., The Right Place Inc. and the Village of Sparta to get the site redeveloped and sold.

Blueforest Ventures is reportedly close to buying the property and plans to sell or lease sites on it to area businesses.

“Actually, business in Sparta is booming and we need to shed a little light on that,” said Paul Veldman, Blueforest Ventures managing director.

Blueforest Ventures is based in Waterloo, Ontario, and has offices in Troy, Mich., and the Netherlands. The company specializes in redeveloping distressed industrial sites. The firm contacted the land bank last year and asked then to be a part of the redevelopment effort.

While the property was being remediated last summer, local manufacturers began calling the land bank and asking about the site’s availability. So for the past three months, the land bank, Blueforest Ventures, The Right Place and Sparta officials have met with local business owners and have come up with a plan to redevelop the site as an industrial park.

The plan involves having Consumers Energy relocate an electrical substation with Blueforest Ventures building a rail spur that will connect to the existing rail line, just east of the property. Those key changes make the parcel an import-and-export hub for Sparta, Kent County and West Michigan.

Another portion of the plan reconstructs Elm Street and ties it into Averill Street to create a new truck route to serve the property.

Village of Sparta Manager Martin Super told the Business Journal the state’s departments of Transportation and Environmental Quality also played vital roles in creating the development plan. “They’ve been very receptive to what we’ve been talking about,” said Super.

“Essentially, where we are at right now is we have our interested businesses at the table. Once the land becomes in the possession of Blueforest, we’re really going to be in the position to speak to all of our local industries and specifically define their needs,” he added.

General Formulations, at 309 S. Union Ave. in Sparta, is one firm that inquired about the property. It’s a global manufacturer of pressure-sensitive materials for signs, decals, labels and other industrial applications. It has warehouses in Atlanta, Minneapolis and Los Angeles but wants to expand in Sparta.

“Federal Mogul owns a parking lot that is adjacent to General Formulations. Well, now that the foundry is down, Federal Mogul’s parking lot, which is adjacent to them, can be used by General Formulations. We didn’t have that opportunity before,” said Super.

“So now we’re really going to have everyone at the table. It’s not just going to be every man out for himself. All the businesses are going to be talking to each other and to us, and we’re all going to try to meet everyone’s needs and work together to do that,” he added.

And by everyone, Super was also talking about the area’s fruit growers. “They’re putting a lot of money into these packing and storage sites. I don’t know if the term ‘heavy ag’ is a real term or not, but when you have a fruit farmer that is spending $3 million or $4 million on a facility, that’s pretty serious money,” he said.

Because the property will be served by two modes of transportation, truck and rail, companies that locate there could be eligible for state incentives though the Next Michigan Development Act and the West Michigan Economic Partnership, which includes Kent County as a member. The Right Place was the region’s catalyst for creating the WMEP last year.

A tire-recycling firm based in the Netherlands, also a client of Blueforest Ventures, was considered for the property, but after visiting one of the company’s plants in St. Louis, Mo., a Blueforest executive decided the manufacturer wasn’t the right fit.

The county foreclosed on the Sparta Foundry for unpaid taxes in 2009 and offered it for sale at two public auctions that year. County commissioners transferred the site to the land bank in January 2012. The county treasurer’s office spent about $13,000 to secure the contaminated site and make a few necessary improvements.

County Treasurer Ken Parrish, also KCLBA chairman, set aside $800,000 as a contingent liability from proceeds generated by the annual tax sale over three years for the foundry site, but hasn’t spent any of those dollars on it. The money now becomes available for county commissioners to transfer to the general fund, if they desire to do so.

“On the 2012 report, that contingent liability disappeared because, since the county no longer owned it, there was no need to maintain the contingent liability for potential cleanup costs. So I took it off the report for the June 2012 report. So the money was not spent,” said Parrish.

“The only money that was spent was $13,000 to do the security; the fencing and the securing of the building, and that was done while it was still owned by the county. The county has not spent any money on it since it was transferred to the land bank,” he added.

Blueforest Ventures covered the demolition cost, while the land bank picked up the tab for the legal and environmental work. KCLBA was asking $180,000 for the property in February.

“The end result, I think, is really great for Sparta and really great for these area businesses,” said Dave Allen, executive director of the land bank. “You’re always going to have more sustainable businesses if you’re working with area businesses as opposed to bringing outside ones in.”

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