THE VIRGINIAN-PILOT
Copyright (c) 1996, Landmark Communications, Inc.
DATE: Wednesday, October 30, 1996 TAG: 9610300456
SECTION: BUSINESS PAGE: D1 EDITION: FINAL
SOURCE: BY MYLENE MANGALINDAN, STAFF WRITER
LENGTH: 68 lines
The word is out: Hampton is ready to make a deal.
Catalina Cylinders, a division of aerospace manufacturer Aluminum Precision Products, picked Hampton for the consolidation of its cylinder manufacturing operation because the city offered access to a port and an available building, Aluminum Precision President Phil Keeler said on Tuesday.
More importantly, aggressive marketing and assistance from local and state economic development officials also helped cinch the deal for Hampton, Keeler said.
Keeler credited a state economic development project manager and Hampton Economic Development Director George Wallace.
Keeler considered the Carolinas, Ohio, Arkansas and Georgia for potential sites for the Catalina Cylinders division. Instead, Aluminum Precision picked Virginia.
Aluminum Precision purchased for $3.1 million a former Mercedes-Benz truck assembly plant, which has been vacant for more than five years and includes 15 acres, Keeler said. It will invest $7 million in the150,000-square-foot facility to build high-pressure aluminum cylinders and small cup canisters called impact extrusions. It will create 125 jobs initially, but plans to employ 200 within three years. Operations will begin at the facility in early 1997. The company will generate about $90,000 in tax revenue for the city, said Stephen Mallon, marketing manager for the Hampton economic development department.
Catalina Cylinders is the latest example of the Peninsula's aggressive marketing and deal-making with expanding or relocating companies. Said one economic development official, who declined to be named: ``The cities of Hampton and Newport News are ready to make deals.''
The Hampton Industrial Development Authority purchased about 30 acres at the Copeland Industrial Park. Because the property is located in an enterprise zone and has railroad access, it is especially attractive to expanding companies, Wallace said.
Hampton's neighbor has exhibited the same style of aggressive deal-making. In September, Newport News' Industrial Development Authority agreed to build Montreal-based Twinpak Inc.'s first U.S. manufacturing facility for plastic containers. The city will lease it to the company over 20 years.
A few weeks later, the Newport News development authority made a similar commitment to Pennsylvania-based Iceland Seafood Corp., which is moving its North American headquarters to the city's Oakland Industrial Park. The authority agreed to finance and build Iceland's $10 million plant. It also agreed to lease it to the company for 20 years. At the end of the lease, the authority will offer the land and the building to the company for $1.
The authority also leased an empty Lowe's building from its owner, only to turn around and lease it to MCI Communications for its customer service center. The city offered United Parcel Service $750,000 in rent concessions over a 10-year period.
These types of deals save companies from shelling out their own cash immediately, economic development officials have said.
What distinguishes the Peninsula in this area is that city officials and economic development representatives are ready to find a way to make a deal work, whereas other cities might walk away.
Some South Hampton Roads cities are more selective with the economic development deals they make. The city of Virginia Beach has outlined what industries - high-paying and environmentally clean - it prefers to attract. The other cities in South Hampton Roads are also selective.
``The community leadership of Hampton and Newport News have seen a lot of success, which can be attributed to the mayors and the city councils, which carries to the industrial development authority and the economic development staff,'' said Robert T. Skunda, secretary of commerce and trade.
KEYWORDS: ECONOMIC DEVELOPMENT by CNB