June 15, 2016 DevelopCLT: What’s in the park now?
Tom McKittrick: We’re on our third wave of tenants. We have an abundance of cheap, dry industrial space and we quickly became a hub for startups, pilot projects and entrepreneurial expansions. Some have made it, some haven’t. We’re starting to get much more quality creditworthy type tenants. We have an industrial tote washing facility, plastics recycling, and we have an aquaculture project on a 35-acre lake. We’re harvesting that material and using it in a composting operation to create a high-quality soil amendment. We’ve also got a synthetic textile manufacturer.
We sold the city of Charlotte 180 acres of land to build a new regional wastewater treatment facility, which will be close to a $200 million project. And we’re about to announce a $40 million-plus project that has a signed agreement. We hope to share details this summer.
DevelopCLT: You use the term “eco-assets” when talking about the site. What does that mean?
TM: Many of these facilities have extensive buffer acreage that often is not developable in a traditional sense. Opportunities exist, however, to create value via conservation easement tax credits and mitigation banking projects. Sometimes these eco-assets have real monetary benefit, other times it is “natural capital” where no money is made but it’s the right thing to do.
We saw eco-asset potential at ReVenture on our buffer and unbuildable areas. This included creating a 183-acre conservation easement along all of our Catawba River and Long Creek frontage, a wide variety of habitat enhancement projects including; pollinator habitat, bat boxes, wildlife plantings, energy crop demonstration stands and managed timber. Beyond being environmentally responsible, our site-wide maintenance costs were reduced by over $100,000 annually as our areas that required mowing are about half. We’re pleased to have been awarded the Wildlife and Industry Together (WAIT) certification from the NC Wildlife Federation. We have areas where it doesn’t make sense to build but certainly makes sense to put these acres back to productive use.
DevelopCLT: What’s the secret to rehabbing formerly polluted sites for a profit?
TM: Most importantly, you need to understand what you’re getting into and how to operate within the regulatory framework. Creating a development plan that is mindful of the sites condition is of critical importance. I’m also a big proponent of not changing the use from industrial. The main plant area of ReVenture is an industrial site and will always remain industrial forever (deed restricted). Sites with legacy contamination get significantly more complex when you start developing condos and retail.
DevelopCLT: Share examples of the thinking involved with this type of development.
TM: Sites with heavy infrastructure and active permits can have significant appeal to new industry and/or the permits may be able to be monetized. For example, in certain watersheds, the phosphorous and nitrogen allocation associated with the wastewater treatment plant may have substantial value. Other examples include: conservation easement tax credits, endangered species, stream and wetland mitigation projects among others. Too often companies who own these sites demolish everything in an effort to lower their property taxes, which is unfortunate. There’s typically no thought in how to repurpose the infrastructure in a manner than can attract new industry.
I love the challenge of trying to figure out how to make a site or a project economically viable, by looking at it in a nontraditional manner. You need to look at real estate, but are there other parts and pieces that can be monetized to extract value and make a project viable. We’ve certainly figured out a lot of angles to extract value where others just can’t see it.
DevelopCLT: What do you enjoy about this type of work?
TM: Certainly everybody wants clean air to breathe and clean water. No one wants to harm the environment. This eco industrial redevelopment model has the added benefit of being economically viable, environmentally responsible and the right thing to do. That said, we’re not here to hug trees, we’re doing this to make money.
I believe repurposing a shuttered industrial complex into an eco industrial park is a rare instance where private investment, public policy and the environment can merge and all can benefit. I like to say big problems are often disguising big opportunities, you just have to look at them through a different lens. I feel like we’ve become very efficient at that. I feel like we’re recycling real estate.