ROANOKE TIMES
Copyright (c) 1996, Roanoke Times
DATE: Wednesday, November 20, 1996 TAG: 9611200034
SECTION: CURRENT PAGE: NRV-3 EDITION: NEW RIVER VALLEY
DATELINE: CHRISTIANSBURG
SOURCE: ROBERT FREIS STAFF WRITER
Attracting new industries to Montgomery County is like running a store, economic developments officials say. Always have something on the shelves to show the potential customers.
With that in mind, three local governments signed an agreement Tuesday to share construction costs for two large - and initially empty - industrial buildings in Blacksburg and Christiansburg.
The structures are designed to attract new companies here that desire the industrial equivalent of turnkey occupancy. Those companies, in turn can bring in new jobs.
It's a bit of a shell game, bearing the expense of developing a costly new building that may be unoccupied for some time. Yet Montgomery County, Blacksburg and Christiansburg officials believe the financial risk is justified.
The cooperative agreement inked by that trio agrees to back a loan of up to $1.8 million for the first shell building. It will contain about 95,000 square feet of manufacturing or warehousing space - more than two acres of floor space - and be constructed on a 15-acre site in Blacksburg's industrial park.
The loan will be financed through the First National Bank.
Once that building is finished and leased or sold, plans will move ahead to construct a comparable second one at Christiansburg's Industrial Park.
Tuesday's agreement verbally commits the partners to constructing the second shell building without specifying how it will be financed, except to say the second building won't move forward "until adequate funding is in place."
Rob McClintock Jr., an official with the Virginia Economic Development Partnership, spoke at the signing ceremony as a true believer in the faith of shell buildings.
He said communities willing to back shell buildings on speculation are successfully attracting new industries. Since 1988, of 56 publicly backed shell buildings constructed in Virginia, 41 have been sold or leased, a 73 percent success rate that McClintock said justifies the risk.
He also said that the average time between completion and occupancy of a new industrial shell building is 21/2 years, but Virginia shell buildings have stood empty as long as eight years.
Nonetheless, industrial prospects consistently favor existing buildings when they shop for new locations, McClintock said. "It's a jump-start to the site selection process."
It worked for Hubbell Lighting, which moved into an empty 50,000-square-foot shell building in Christiansburg 24 years ago. Since then, the business has expanded to six times the original space, with 590 employees and an annual payroll of $18.5 million, according to Jerry Shoemaker, Hubbell Lighting's plant manager.
"A shell building is a good investment for our community," he said. That sentiment was echoed by Andrew Rhea, finance manager for Tetra Secondnature, which occupied a shell building in Blacksburg's industrial park in 1992.
Past success stories like those influenced the Montgomery Regional Economic Development Commission to revitalize the local shell building program in 1995. Now the commission, the towns of Blacksburg and Christiansburg, Montgomery County and the Montgomery County Industrial Development Authority have agreed to what amounts to a modern barn-raising.
Under the agreement's terms, the Industrial Development Authority will design and build the new shell buildings. The Economic Development Commission will manage and market them when completed.
Don Moore, Montgomery County's economic development director, said construction of the new Blacksburg shell building will begin in several months and be completed by next spring.
He said the buildings will be marketed to firms that fit a business profile of growth potential, good wages and a strong connection to technology.
"We prefer to bring in jobs to fit people in the current work force," he said.
Tuesday's ceremony and all the talk about filling new, empty buildings was held in a conference room at the county's recently completed Health and Human Services building in Christiansburg - which isn't fully occupied, as the county and the Department of Social Services continue to negotiate a rental agreement.
LENGTH: Medium: 82 lines ILLUSTRATION: GRAPHIC: The first shell building will contain about 95,000by CNBsquare feet of manufacturing or warehousing space and be constructed
on a 15-acre site in Blacksburg's industrial park. color.