Sunday, April 21, 2024

New vision for Concord’s former Philip Morris, Alevo site

The 3.5 million-square-foot former Philip Morris cigarette plant in Concord is being demolished. With the help of JLL, property owner Bootsmead LeaseCo is marketing the site to prospective tenants.

By Alyssa Pressler

The owners of the former Philip Morris plant in Concord are hoping a clean slate will help attract new tenants — and return economic prosperity ­— to the 2,000-acre site where 2,500 people once worked making a billion cigarettes a year.

In early February, D.H. Griffin began to deconstruct seven warehouses on the land. Demolition of the 3.5 million-square-foot main facility — it was once the world’s largest cigarette plant — will begin by April, says Wellford Tabor, managing partner of property owner Bootsmead LeaseCo.

“They are removing the existing buildings and preparing the site so that new users can come and build their own facilities,” Tabor says. What’s next is anyone’s guess, he says.

With the help of real-estate services firm JLL, Bootsmead has been showing the land on U.S. 29 to prospective tenants for about a year. After consulting with state and local economic-development officials, Bootsmead decided demolishing the facility would better appeal to prospective tenants.

JLL’s Pete Pittroff, managing director of Industrial Capital Markets at JLL, says that while the firm has had steady interest in the site, he anticipates showings will increase post-demolition.

The land is zoned for several uses, including industrial zoning at the plant site that encompasses 500 acres. Utility infrastructure is already in place, and the site has rail and interstate access, including four separate four-lane roads leading to Interstate 85. The owners could subdivide the property, allowing several businesses to become tenants, Tabor says.

The main goal is to bring back some of the jobs and $8 million in tax revenue lost when Philip Morris shuttered the plant in 2007. “We’re really excited about their commitment to continue using it as industrial land to create jobs,” Concord Mayor Bill Dusch says.

Switzerland-based energy-storage company Alevo bought the land from Philip Morris in 2014. That same year, Alevo reopened the factory, and founder Jostein Eikeland projected as many as 6,000 people would work making its utility-scale battery-storage systems. But despite promising technology, sales didn’t pan out, and the company sold the property to Bootsmead for $67 million, The Charlotte Observer reported. Alevo declared bankruptcy in August 2017, idling 290 workers. Cabarrus County property records show the building was most recently valued at $25 million, while the land is valued at more than $49 million.

Bootsmead was aware there was a risk with Alevo, says Tabor, who previously worked as a private-equity banker at Wachovia and is now managing partner at Keeneland Capital, a Charlotte investment firm.

“We were comfortable buying the property because we thought it was a fantastic collection of acreage and that if Alevo didn’t make it, it’d still be an excellent investment,” he says.

Demolition should be complete by the end of 2019, says Tabor, who declined to give a cost estimate for the project. Bootsmead will attempt to sell or recycle many of the materials from the demolished facility.

“It’s still early days, and development of a property this size will take years or even decades,” Tabor says. “The best use for different parts of the acreage will unfold like a puzzle.”

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