Former ConAgra site lands new tenants
More than half of the 230,000-square-foot facility is spoken for.
Although 2014 was a dark year for the mammoth industrial building at 4490 44th St. SE in Kentwood, 2015 is looking a lot brighter.
The troubles of the 230,000-square-foot Kentwood plant began in January of last year when ConAgra Foods, an Omaha-based packaged-food company, announced it would cease production at the site by May 2014, with plans to officially close the facility that July. The plant employed 260 workers.
Even then, closing the 44th Street plant, which ConAgra spokesperson Monique Farmer called a “cost-effective measure,” didn’t make a lot of sense to Rich Houtteman, deputy administrator of the city of Kentwood.
ConAgra had bought the facility in 2009 for $73 million from Kentwood-based snack and nutrition bar maker Elan Nutrition and had invested at least $40 million into it, he said in an interview last year.
Nor did the decision make sense to Robert Grooters, owner of Grand Rapids-based Robert Grooters Development Co., which originally developed the space. Grooters pegged ConAgra’s overall investment in the space at about $150 million.
“ConAgra acquired two large food operations in other parts of the country and had too much capacity,” he said.
“They had so much money invested … for them to unwind this was actually very expensive to do it.”
To Grooters, the real story of his vacant, industrial-sized building problem went all the way back to 1998, when George and Rick Manus of Rockford started a snack bar company called Five Star Brand. At the time, “We basically got candy bars for rent because we try to help companies get going. Then … he started selling sports bars and instantly grew like mad,” said Grooters.
Five Star eventually became Elan Nutrition, and Grooters built the growing company the current 230,000-square-foot space at 4490 44th St. SE.
About four years ago, ConAgra came along and purchased Elan Nutrition, he said.
“Elan Nutrition was ConAgra’s world’s largest food producers, and they put in just a giant amount of brand new equipment, production lines and everything,” he said. “It was the most state-of-the-art facility (ConAgra) owned. And they were doing like 3 million sports bars a day.”
Then in 2014, Grooters found himself left with a fantastically equipped empty space. Thankfully, the building had benefits that were already paid for, he said, making it a “win-win” for Grooters and any future tenant because he could offer a decent rental rate that had a lot of value.
But, looking back, it was a lose-lose for ConAgra, he said.
“What was good for the next company was there were a lot of improvements in the building: air conditioning, food quality, just spotlessly clean, primary power, laboratories, compressor rooms, special assembly rooms, nice offices. … So it was really a nice asset,” he said.
“It excites us because it’s just a great value to the people who are going to use it. They save a ton of money. If we can help a company lower their overhead, they can be more successful and they can grow, and we can grow with them.”
Grooters said he is happy to announce that his building isn’t empty anymore. The building has been split into three leasable sections: 42,500 square feet is now leased on one side and 87,500 square feet is leased on the other side. In the middle, there’s still a vacant 101,250-square-foot space, he said.
Key Plastics LLC, based in Plymouth, Mich., moved into the 42,500-square-foot space April 1, and is using it as a warehouse for its manufacturing plant on 52nd Street, Grooters said. About three or four employees are housed there on a part-time basis.
The approximately 87,500-square-foot space has been leased to Grand Rapids-based Monroe LLC, which specializes in manufacturing and precision plastic injection of close-tolerance parts. Monroe is currently housed in nearly 77,000 square feet split between four buildings on 40th Street and has plans to consolidate in this building.
Wolverine Construction is currently doing renovations to Monroe’s new space for just a little over $1 million, said Alex Reeves, CEO of Monroe. The budget for the entire move and renovation is about $2 million, he said.
“Because we’re in four buildings, we’ve struggled with our appearance, and that hurt us with growth. (Being in) a newer, better building should help us gain more clients. Going into this new, much-improved Grooters building will be very good for us,” he said.
“We expect to move the first machines in starting the first part of June. It’ll be about a six-week move to get everything up and running. We’ll probably start in July.”
Now that he’s got Key Plastics and Monroe in the building, Grooters is focusing his energy on filling the remaining 101,250 square feet of vacant space, which will likely be leased in the next 60 days, he said. He’s been talking with a couple of automotive-based businesses, but he said the space could also be used for food processing, assembly or sewing.
If anything, the ConAgra experience has taught him that he’s developing buildings the right way, he said.
“It just shows the product we build is very flexible, and we’ve been building our buildings like this for a long time,” he said.
“It can be an office building, an industrial building, a food building. And this shows that flexibility. One company moves in, another company moves out, and we really don’t have to do a lot of changes.”
There’s not much space like this in Grand Rapids, especially of this quality, he said. The secret to bringing in tenants, Grooters said, is not giving up on a building.
“You can’t just sit there and mope about it. You’ve got to go to work and move some companies in there that are an asset to the community, and we are,” he said.
“You take a minus and you bring it back into a plus.”