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Project Outline
The Port of Ridgefield owns an industrial
site that will be redeveloped in the next 5 to 10 years, not sooner. In
the meantime, the Port wanted to avoid making investments that would be
lost on redevelopment, but they wanted revenue until redevelopment was
possible.
Challenge
The Port owns an industrial site that
will be redeveloped in the next 5 to 10 years, not sooner. In the
meantime, the Port wanted to avoid making investments that would be
lost on redevelopment, but they wanted revenue until redevelopment
was possible. 130,000 SF wood processing facility, which included
steam heated dry kilns, was part of a 210,000 SF, 40 acre facility
owned by the Port of Ridgefield. Site attracted only
undercapitalized wood production companies, each of whom encountered
business failure.
In 2000, facility was vacant and in
serious despair but had permanently installed processing equipment.
The space was part of a facility that was facing a $50 million
environmental remediation.
The Port commissioners, as landlords,
had become weary of investing in a rundown property for tenants that
had a tendency to go broke. The commissioners hoped to begin
redevelopment of the site but no master plan existed.
Approach
Scott Fraser contacted a wood products
engineering consultant, HCMA Consulting Group, Inc. who had worked on
the site on behalf of several of the previous tenants. They used their
consulting experience to recommend improvements that were necessary for
operations to continue. And that involved a minimum investment that
could be fully amortized over the initial 5-year term of the proposed
lease. The principals of HCMA formed a new venture to be the Tenant.
They focused on a high-margin hardwood market niche instead of depending
on high volume/low margin processing.
The commissioner’s concerns about the Port
making additional investments were addressed by the Tenant’s paying for
all of the mission critical investments in exchange for a rent offset.
Results
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Early results
of the master planning process showed that if the tenant’s 5 year
extension were exercised, redevelopment could be phased around the
tenant’s continued use.
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A competitive
lease rate was negotiated, which included the ongoing terms that
needed to be successful.
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The Port’s site
was improved without use of Port funds; the Port controls the
sectors of its property needed for future redevelopment.
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The Port now
has a higher quality tenant than before.
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The Port’s NNN
rental income for this space increased by over 50%.
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Lake River
Industrial Site
Ridgefield, WA
Services Provided
Landlord Representation
Owner Representation
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