BEECH BOTTOM - The Business Development Corp. of the Northern Panhandle emerged this week as the new owner of the 600-acre Wheeling Corrugating property in Beech Bottom, a complicated transaction that has been weeks in development.
The deal, which closed Wednesday in New York City, gives the BDC control of the massive property, including 150 acres of prime flat land fronting the Ohio River as well as some 480,000 square feet of fully infrastructured warehouse space already under roof.
State Route 2 LLC, a subsidiary of Los Angeles-based Hackman Capital, owns the rights to the equipment on the property. They'll work together to market it.
"Obviously, it's adjacent to the Ohio River, which is rare," said Susan Skros, vice president of marketing and investor relations for Hackman. "That's why we were drawn to the opportunity - the energy boom in this area of the country, the magnitude of the site and our desire to collaborate with the BDC. We want to redevelop the site for better economic use. This is the perfect opportunity to bring more jobs to the area, a chance to take advantage of the energy boom in the area."
State Route 2 LLC purchased the property out of bankruptcy from the now-defunct RG Steel and immediately signed over the land - and with it, responsibility for legacy issues there - to the BDC. Pat Ford, executive director of the BDC, described it as "a gem" of a property, a rare development opportunity in the heavily industrialized Northern Panhandle. As a nonprofit, the BDC has access to state and federal funds to remediate contaminants on the site, money Hackman couldn't leverage on its own.
"This isn't scary," Ford said. "Scary is when your future lies in someone else's hands and you have no say, no control, no influence. Here, the people who will have a say in this site are the businesses and residents of Brooke and Hancock counties, of the Northern Panhandle."
Papers on file with U.S. Bankruptcy Court show State Route 2 LLC had initially offered $2.1 million, minus any back taxes, for the equipment as well as land. Under bankruptcy court rules, others interested in the property had 14 days to submit higher or better offers for the property, and several potential buyers availed themselves of that opportunity to submit counter bids, pushing the final sale price up.
While Skros declined to say what the actual price was, Ford did say the BDC paid $200,000 to buy the land rights from State Route 2 LLC, which has an option to harvest all of the equipment.
"The chain of title for liability goes from RG directly to the BDC, so we're on the hook for any liability," Ford said. "But we're doing it with our eyes wide open. We've already illustrated our capacity to handle environmental liabilities to to the community of Chester, to the U.S. Environmental Protection Agency and West Virginia Department of Environmental Protection. We've illustrated our capacity to manage environmental cleanup, and we've also illustrated our capacity to successfully seek out and obtain funding to assist with cleanup. We'll apply the same model to the Wheeling Corrugating site. It might look like a steal on paper, but if you're in this business you understand the liability we've assumed."