A Philadelphia real estate developer has signed an agreement to convert Bridgestone's old technical center in Akron into new office space. Amerimar Realty effectively has a year to attract tenants before it has to start spending money on the development.:
View full sizeBridgestone has moved most of its employees out of the Firestone factory and technical center, shown in this 2008 photo, that Harvey Firestone built in 1910. A new tech center a few miles south opened earlier this year. Philadelphia-based Amerimar Realty has an option agreement to buy the land and redevelop it.CLEVELAND, Ohio -- Firestone's century-old offices and tire plant in Akron may become the site of an oil, gas and chemicals research hub.
Mayor Don Plusquellic could today sign an agreement to sell the 35-acre site to Amerimar Realty, a Philadelphia real estate company that has developed hotels, offices and other projects in Pennsylvania, California and Colorado. The agreement gives Amerimar a one-year option to buy the property for $5 million, giving the developer an opportunity to shop the Firestone building to potential tenants.
"This is going to be big," Amerimar owner David G. Marhsall said Thursday from his office in Philadelphia. "What we want to do is really create a hub for research in the gas and oil and polymer industries."
City economic development officials said Plusquellic plans to sign the option agreement before the weekend, but they did not know whether he had received the final copy by the end of the day Thursday.
Marshall said that after seeing how shale gas exploration affect Pennsylvania's economy, he's betting that the development of shale in Ohio will draw huge numbers of businesses and jobs to the region.
"The growth in Marcellus shale in Pennsylvania last year, they added 100,000 jobs," Marhsall said. Pro-shale energy companies funded a study last year that found the state added 140,000 shale jobs in 2010, although some groups have questioned the methodology and objectivity of that study.
The Marcellus shale region covers portions of Ohio, Pennsylvania, New York and West Virginia. More companies have shown interest in the Utica shale region, an area that also includes large portions of eastern Ohio. While Marcellus shale has produced large amounts of natural gas, Ohio's Utica shale has produced gas and wet gasses, hydrocarbons such as propane and ethane, a critical component in plastics manufacturing.
Marshall said, "If the Utica shale is anything like [Marcellus], there's plenty of room for growth."
Bridgestone's move got plans rolling
Plans to redevelop the 1.3 million-square-foot property date to 2008 and 2009, when Bridgestone announced plans to build a new technical center in Ohio or Tennessee. Akron won that project, and the company Wednesday celebrated the grand opening of that high-tech building.
Akron, Summit County and other groups pledged about $50 million in tax breaks to persuade Bridgestone to bring the new $100 million tech center to the city. Part of that deal was the city's agreement to buy Bridgestone's old property for $5 million once the Japanese tire company was done with it. Built in 1910 by Harvey Firestone, the building still houses Bridgestone's Firestone-brand racecar tires.
Brad Beckert, development engineering manager for the city, said Akron expects to buy the Bridgestone properties in the fall, after the company provides environmental reports spelling out what cleanup actions might be needed in a building that has housed tire-making operations.
"Bridgestone is responsible for any asbestos abatement or environmental cleanup," Beckert said. "As soon as we get the details on that, we can close on the property."
Bridgestone plans to keep its racecar tire business at the old location and will lease the property from the city or Amerimar, Beckert said.
A big question for the new project is how much room Akron has for new real estate developments.
A few miles from the Firestone site, real estate magnate Stuart Lichter is halfway through a $900 million redevelopment of Goodyear's headquarters in Akron. Lichter's Industrial Realty Group is building a new headquarters for the company and a new parking garage. When Goodyear moves into those facilities next year, IRG plans to renovate the old property and lease it to new tenants.
Industrial sites tricky to redevelop
Beckert and Marshall both said they're confident the developers and the city will be able to attract businesses to the region. But redeveloping large industrial sites can be difficult.
Last year, real estate developers bought Chrysler's former Twinsburg Stamping Plant, hoping to convert the 2.2 million-square-foot facility into manufacturing and warehousing space. But they couldn't find tenants to fill the high-ceiling space.
Potential tenants toured the site, but they couldn't use the existing facilities. So developers have demolished their building and have put their hopes on building new facilities on the 165-acre property.
Marshall will effectively have a year to persuade tenants to move into the building before he has to spend money either buying the property or working on improvements. Beckert said he's convinced that Amerimar will be able to find plenty of takers.
"He's done some very large projects in the past," Beckert said. "With what he can bring to the table, especially the types of businesses that he can attract, I think he can fill that space."
Marshall said he plans to find tenants then redevelop portions of the building to suit their needs. Because he plans to develop the property in stages, he said he doesn't know how big the project could become.
The first step to his plan would be converting the clubhouse, a building across the street from the main Firestone offices, into a workout facility and day-care center. Under his option agreement, Marshall can buy the clubhouse for $625,000, the main Firestone building for $4.4 million or both for $5 million. Buying the clubhouse first would let Amerimar begin work on that facility while it continues to look for tenants for the main structure, he said.
"We've used [fitness centers] as a catalyst in other projects, especially in Denver," where Amerimar had a 55-story office building that included a fitness center, hotel and apartments, Marshall said. "The building started to lease up almost immediately."