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Final property evaluation report in hands of local officials

The CSX rail yard is one of the seven sites examined by the Tennessee Department of Economic and Community Development as part of the 50-page Select Tennessee Sites Property Evaluation Program. The report, which provides local officials with suggestions for using the properties for community development and economic recruitment, was provided to the Joint Economic Development Board of Unicoi County last week. (File photo)
The CSX rail yard is one of the seven sites examined by the Tennessee Department of Economic and Community Development as part of the 50-page Select Tennessee Sites Property Evaluation Program. The report, which provides local officials with suggestions for using the properties for community development and economic recruitment, was provided to the Joint Economic Development Board of Unicoi County last week. (File photo)

By Brad Hicks

A report detailing the economic development feasibility offered by several local sites is now in the hands of the Joint Economic Development Board of Unicoi County.

Last week, board members were presented with the finalized Select Tennessee Sites Property Evaluation Program report. The 50-page report, which was approved Friday, Dec. 16, by the Tennessee Department of Economic and Community Development, outlines the “suitability of properties within the county for attracting job-creating investments,” and provides recommendations on each of the properties examined for the report, as well as suggestions on how the county can bolster community development and marketing efforts.

The seven sites included in the report are: the former Morgan Insulation site; the CSX rail yard site, which includes the car shop and office buildings; two sites in the Dry Creek area; the Erwin Public Works building; a warehouse located along Main Avenue; and Fishery Park.

“There were lots of things that stood out,” Tish Oldham, director of Community Outreach and Economic Development for East Tennessee State University and executive director of the Joint Economic Development Board of Unicoi County, said of the report, “but I guess the most important aspect of the report was categorizing the pieces of property and looking at their strengths and then looking at the needs for each of those properties and beginning to identify how a site selector would view those pieces of property because, really, that’s the game changer.”

The findings and recommendations report was completed by Austin Consulting, a site selection support firm that was brought in by the state to conduct property assessments for the Select Tennessee PEP. According to the state, the Select Tennessee PEP was developed to expand the state’s inventory of industrial sites and existing buildings through evaluation of a community’s existing inventory “that prioritizes where investment may be most beneficial and what steps may be needed to address issues and shortcomings.”

“The purpose of this report is to provide stakeholders with an outsider’s impartial perspective into Unicoi County’s portfolio of real estate assets and associated economic development opportunities,” the report states. “The hope is that stakeholders will use these insights to focus local resources to ready properties that have the greatest potential for business attraction.”

Unicoi County’s application for the Select Tennessee PEP was accepted earlier this year and, in May, the exchange of community and property information was initiated between Austin Consulting and Oldham. On July 18 and July 19, Austin Consulting representative Don Schjeldahl visited Unicoi County to conduct a two-day field evaluation of the sites proposed by local officials for the Select Tennessee Sites PEP report. On July 19, Schjeldhahl presented some of his preliminary findings and recommendations to Unicoi County officials during a luncheon held at The Bramble in downtown Erwin. At that time, Schjeldhahl said 50 to 60 percent of companies looking to set up shop look to see if communities have existing properties available.

“If you don’t have an existing building, then you are immediately eliminated from 60 percent of the investment opportunities out there,” Schjeldhahl said in July.

The report states the objective of Austin Consulting in a site selection project is to “collect sufficient information about candidate properties, the community, and local and regional economies to determine if the location can adequately support a given corporate investment.”

“In the Select Tennessee Property Evaluation exercise Austin looked at Unicoi County through the lens of numerous investment types including: general manufacturing, warehousing/distribution, food processing, data center, automotive parts manufacturing, and back office/shared services operations, all of which are logical targets for the East Tennessee region and Unicoi County,” the report states.

The report further states Austin Consulting’s assessment centers on a pair of considerations – the firm’s opinion on each property’s importance to Unicoi County’s economic development future and each property’s need for attention from local leadership to ready the property for development.

“I think it is an opportunity to set priorities based upon what the industry standard is and also to balance those standards with the desires of the community,” Oldham said of the proposed actions outlined in the report. “Ultimately, anytime you’re doing planning and community development and economic development, but particularly when you’re doing planning, you need to consider what your citizens want and where they want things to go. In doing that, you also have to look at what you need to do for your economy and so, at this point, the conversation needs to be, ‘This is where opportunities are. Are we willing to commit to those opportunities and make those investments, not only for our generation but for future generations who are going to need jobs, and what kind of community do we want to have and where do we want people to be able to work?’

“So coming out of that, having goals, having specific action items to be undertaken, that’s really the next point.”

The first site for which the report offers an assessment of strengths and weaknesses, along with recommendations, is the CSX rail yard site. This nearly 55-acre site includes the locomotive maintenance shop, the office building, rail infrastructure and other land parcels.

According to the report, the CSX car shop is suitable for heavy industrial operations, offers good access with its proximity to Interstate 26, and its infrastructure capacities, such as water, sewer and natural gas, are in line with the needs of industry and commercial activities. However, the report states CSX has not offered a “clear signal” about its willingness to sell or lease the property, and rail lines running through the car shop limit use for non-rail functions. Removal of the rail may not be allowed, the report states.

The CSX office building’s architecture, functionality and location are “with the direction of redevelopment in downtown Erwin,” the report states. But there are unknowns about the building’s condition and the challenges to reuse it would present, according to the report.

As for the CSX site itself, the report states that it offers good access and that rail-oriented development on the site is possible. But the report further states the total acreage available for development is unknown, as CSX has not engaged in discussions regarding property reuse. The report adds available acreage would depend on how much rail could be removed, noting CSX would have to retain some track to support ongoing rail operations.

Consultants recommend in their report that local officials engage CSX to develop a plan for utilization of rail yard and terminal assets. It is also recommended that community efforts be focused on the CSX office. The report states officials could encourage community stakeholders to get behind a movement to redevelop the building, prepare redevelopment concepts that stimulate discussion on the reuse of the property, or explore the possibility of having the building placed on the National Register of Historic Places.

The approximately 16-acre Morgan Insulation property is next covered by the report. As far as site strengths, consultants noted the property is served by water, sewer, electric and natural gas services that would support light industrial and commercial activities. The sites access, in particular its close proximity to Interstate 26, is also noted in the report, as is the active rail line which could serve the site.

On the weaknesses side, consultants wrote the Morgan Insulation site is long and narrow, limiting development options. It is also stated in the report that nearby commercial and retail development may not be compatible with some types of heavy industrial uses, and that demolition of the silos located on the property could delay development if such demolition is required.

Recommendations for the Morgan Insulation property include the demolition of buildings and silos onsite to enhance appeal. It is also recommended that professionals be brought in to examine the site’s geotechnical characteristics, as the completion of such studies will make the property more marketable.

The town of Erwin recently received a grant from the Tennessee Valley Authority through its InvestPrep program. Through the grant program, the town received around $250,000 which is to be used to demolish the town-owned Morgan Insulation site in order to prepare it for development. In September, the Erwin Board of Mayor and Aldermen approved an agreement between the town and TVA for the InvestPrep program.

The report’s assessment of multiple properties in the Dry Creek area that make up more than 35 acres is that the land is “attractive from a development perspective,” as it is mostly flat making it more conducive to development. The sites’ proximity to the interstate and local highways is also noted, as is the access to utilities needed to support light industrial operations. This property is also isolated from incompatible land uses, according to the report.

“The site presents an attractive setting for the development of light industrial and distribution operations,” the report states.

But the report states the narrow Dry Creek Road leading into the properties does not meet modern industrial standards and would need to be upgraded. Among other weaknesses, the report states the CSX grade at Dry Creek Road and Zane Whitson Drive is unsuitable for trucks and employee vehicles, that a nearly 1-mile extension of wastewater line would be required to serve the property, and a lack of zoning in Unicoi County “will be viewed by some perspective investors as an unacceptable risk as there is no guarantee of stopping unwanted neighboring or nearby development.”

Recommendations for the Dry Creek properties, which include land on which the county’s economic development board has an option, include the development of a master plan to establish the “best development alternatives,” which could include the accommodation of one large industrial facility, several large-parcel development sites, a multi-tenant light industrial park, or a combination. Also recommended by consultants is the hiring of professionals to examine environmental conditions of the properties.

The nearly 4-acre site referred to as the “Rock Creek property” in the report is located along North Main Avenue and includes an approximately 23,000 square foot building that recently served as the office and warehouse for Steam Horse Dry Goods Co.

This property, according to the report, is well-located to draw workforce from Unicoi County and surrounding counties, with its proximity to the interstate marking it attractive for companies. The existing building on the site would also be attractive to investors looking to expand industry or establish new ones.

“The Rock Creek building provides a product to show companies interested in the area,” the report states.

While the report lists the site’s isolation from incompatible land uses and access to utilities as additional strengths, the document notes that large portions of the site and building are located in a floodplain and floodway. It also states the building’s low ceiling could limit the types of industrial and commercial operations that could use the facility, adding mechanical, electrical and lighting systems within the building would require modernization.

The report recommends that county officials continue to market the availability of the building on the Rock Creek property.

“Most location selection projects start out looking for a building,” the report states. “While the Rock Creek building has unattractive features, it may still meet the needs of a new or expanding business. At minimum, the building will bring attention to the community.”

Consultants further recommend that local officials consider using the building as an incubator for supporting startup businesses.

The report states the Erwin Public Works building is suitable for both light and heavy industrial uses, further adding that if the building were razed, the approximately 10 acres on which it was situated could be redeveloped for a single large user or a multi-tenant industrial park.

A weakness noted in the report with regards to the Erwin Public Works building pertains to its location. The report states the property is located within a neighborhood of mixed residential, commercial and industrial land uses and that neighboring residential properties may not be compatible with industrial and commercial development. The street serving the property is also narrow, the report states.

Consultants wrote that by changing the entrance of the Public Works building from Watauga Street to Carolina Avenue, conflicts created by truck and employee traffic in the neighborhood would be eliminated. Along with hiring professionals to examine the site’s environmental conditions, consultants also recommended determining the land that is developable and creating a master plan to illustrate how the land can be used.

The 22-acre Fishery Park site offers excellent access to Interstate 26, according to the report, but the presence of open water, stream beds and wetland areas on the on property would restrict site development. Another possible weakness noted in the report is the likely public opposition to the conversion of a park to an industrial or commercial development.

“Continued maintenance and enhancement of this property as a public park is recommended,” the report states.

The report also offers several general real estate recommendations. Consultants wrote county officials should work to broaden the portfolio of office and industrial buildings in Unicoi County, including the establishment of a spec building or development of a virtual spec building. It is further recommended that officials keep real estate listings up-to-date and work to ready selected sites for development.

“The Morgan Property, Dry Creek I and II, and Erwin Public Works property have the best near-term potential,” the reports states.

Oldham said she has reviewed a comprehensive plan developed by the state’s Planning Office around 2000 which noted around 30 total acres of land was being used in the town of Erwin for industry and, unless much work was done, there wouldn’t be anywhere to expand industry in and around Erwin.

The preparation of the Morgan Insulation site and the purchase of the approximately 19 acres of Dry Creek property on which the county currently has an option would more than match the amount of existing industrial land currently utilized in the community.

“I think Unicoi County will be positioned properly for the market once the Morgan building is torn down and once property in Dry Creek is purchased,” Oldham said.

Oldham said completion of the Select Tennessee Sites PEP report was the “qualifying event” necessary before the county can request funding to complete development projects, as the state does not wish to put time, money and effort into a site that’s going to require more time “to get up to speed” when state officials could be helping another community with sites that are ready for development.

“So it is to Unicoi County’s benefit to make sure everything’s ready to go because they’re going to be able to be targeted for certain investments if they’re willing to make those investments themselves,” Oldham said. “It’s not that the state’s going to come in and hand out funding. It has to be that, obviously, the commitment is there from the community in order to accomplish these goals and that their ability and willingness is there to execute on the plan.”

Now that the report is complete, the next goal would be to have a desirable site designated as a Select Tennessee Certified Site, Oldham said. This designation, Oldham added, would lead to the state prioritizing the marketing of the site.

“Once you become a Certified Site, it says to companies that are looking at the area, ‘This site is ready to go, it is shovel ready, it has been vetted by the state and others, and you’re not going to have to take as much risk on this site,’” Oldham said.

Community development recommendations spelled out in the report include further improvements to downtown Erwin, the development of gathering places to attract millennials and others who would bring next generation skills to the area, recruiting retired executives living in there to help local entrepreneurs and business startups, and embracing the story of Mary the Elephant and supporting efforts to turn the event into a positive.

Consultants also recommended that local leaders conduct a study to identify logical industry targets and develop branding and marketing targets around each one.