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The art of the deal
Related stories:
- Market Leader Profile
- Major Transactions from Around
the State
- Market Overview
- Trends
- Outlook
by
Rob Walker
Virginia Business
December 2004
THE
DEAL: Redevelopment
of the 325,000-square-foot Ingersoll-Rand building,
a prime industrial space in Roanoke County and once
the workplace for 680 people. Hall Associates, western
Virginia’s largest commercial and industrial real
estate firm, put the deal together after Bogar LLC,
a partnership formed to buy and develop the property,
came up with a plan and the $4.35 million purchase price.
Businesses are now returning to the site, which is 10
minutes from downtown Roanoke — near Interstate
581 — and served by a rail siding. Valley Machine
has moved into part of the building and Atlas Copco,
which recently bought out Ingersoll-Rand’s rock-drill
division, has expanded operations there. The Bogar partnership
plans to develop a multitenant facility, leasing space
to industrial, distribution and office tenants. The
deal included the plant, plus more than 70 acres of
land, which will be subdivided for future development.
KEY PLAYERS: Jim Bowman, a local investor and
businessman; Gary Sledd, CEO and owner of Valley Machine;
and John Lipscomb and David McCray of L&M Properties.
Together, the four make up Bogar LLC. Other key players
included Vernon Campbell, Ingersoll-Rand’s former
general manager in Roanoke County who is now general
manager for Atlas Copco, and Ed Hall and Stuart Meredith
of Hall Associates, who represented Ingersoll-Rand in
the transaction.
HOW THE DEAL UNFOLDED: In the early 1990s,
Ingersoll-Rand was a leading employer in Roanoke County,
running manufacturing, sales and distribution operations
from the first-class facility it built there in the
late 1960s. “You look at that building and you
know they were serious about being here,” says
Bowman. “I don’t think they had to worry
about a budget.” More recently, though, in the
face of recession, consolidation and relocations, Ingersoll-Rand
had reduced its work force until only 34 workers remained
earlier this year. “They were trying to sell their
drill division and they were interested in selling the
building,” says Doug Chittum, county economic
development director. Gary Sledd, who had done business
with Ingersoll-Rand over the years, needed space for
his company to grow. He had always admired the attractive,
sturdy building on a rare, flat industrial site in the
mountainous county. “He approached us about leasing
space, and I said he should buy it,” Cameron says.
So Sledd and Bowman joined forces to put together an
offer. About the same time, Lipscomb and McCray, who
had successfully redeveloped other large buildings in
the area, including the Lane Furniture plant in Rocky
Mount and the Singer Furniture plant in Roanoke, also
were looking at the property. Rather than compete, the
groups got together, pooling expertise and resources,
and made an offer. After the sale of Ingersoll-Rand’s
drill division to Atlas Copco, Cameron worked with the
new owners to keep his business in the county. “It
all came together from all angles,” he says. “We
all are very dedicated to succeeding here.”
MAJOR HURDLES: Conditions appeared to be aligned
against the Ingersoll-Rand deal. The property was a
huge, old industrial plant. The economy was slumping.
All across America, heavy manufacturing jobs were disappearing.
And the plant had been on the market a while. “It
sat so long that I think no one was really looking at
it too hard,” Chittum says. “We weren’t
finding many prospects.” The county economic development
office and some commercial firms had marketed it to
outside interests but none had bitten. “We felt
all along that the best play might be someone local,”
Chittum says. “When we moved in that direction,
beginning with Gary Sledd’s interest [in the space
for his Valley Machine company], it all came together.
A good sale comes when you have a good piece of property,
a willing seller, an interested buyer and a reasonable
price,” Chittum says. “That’s what
we got here.”
ECONOMIC SIGNIFICANCE: The deal gives an old
building new life and creates the potential for jobs
as new companies lease space in a prime location or
develop sites on the adjoining tract. Valley Machine
and its 60 employees leased 70,000 square feet of space
and increased its business as a result. Atlas Copco,
a global industrial group headquartered in Stockholm,
Sweden — which replaced Ingersoll-Rand —
took 69,000 square feet and plans to lease 40,000 more.
The plant may become a distribution center for that
company. And with more than 150,000 square feet of space
under roof available and another 70 acres surrounding
the plant, officials estimate that the site could provide
work for about 1,400 people in years to come. Depending
on what businesses come in, Chittum says the county
could collect from $150,000 to more than a million dollars
year in tax revenues.
Return to Virginia Business - December 2004
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