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14 Jun, 2017

Newport News EDA buys old Chase Bag site for $1.1 million

14 Jun, 2017 - Tranzon Fox

Original article published June 14 in the Daily Press

By Reema Amin

In a move to add to the city's redevelopment options in the Southeast Community, the Newport News Economic Development Authority bought the 27-acre former Chase packaging plant site on Wednesday for $1.1 million in a foreclosure auction.
Raymond Suttle Jr., a lawyer with Jones, Blechman, Woltz & Kelly, represented the EDA at the Tranzon-hosted auction, held along the property's waterfront at 1300 Marshall Ave. He bid $1 million; the final sale price includes a 10 percent buyer's premium.
At least three other bidders showed up. One of them was Henry Hollander of Hollander Associates, an architecture firm based in Alexandria. His threshold was $625,000, he said. Hollander said he envisioned residential and retail development on the site. The beach area was "obviously" one of the site's most attractive qualities, he said.
The bidding started at $300,000 and steadily rose to $775,000 before it became largely a contest between Suttle and another man, whose name and affiliation wasn't clear. Suttle's opponent wouldn't budge past $1 million.
Bill Londrey, the broker for this auction, said that potential bidders were more concerned about the surrounding neighborhood than lingering environmental issues on site. It's near Ridley Place public housing complex, which is one of the poorest parts of the city. But the neighborhood is precisely why the EDA wanted the property, said City Manager Cindy Rohlf and Florence Kingston, the city's director of economic development.
"We just know that this gives us the luxury to plan it strategically in a broader context with the work we're doing with Marshall and Choice Neighborhood," Kingston said.
The city received a $500,000 Choice Neighborhood grant from the U.S. Department of Housing and Urban Development last summer. It has been using the money to plan how it wants to transform and improve the neighborhood, from more community resources to better housing options, with direct input from city residents.
The final plan could include mixed-income housing and other redevelopment. The Chase site could fold into that plan, Kingston said, but right now there is no specific idea for it.
"If a private sector (company) bid enough, they would sit down and come to be a partner with the city," Kingston said. "This gives us a chance not to feel pressured and really build a plan that has a consensus with the community and makes sense, and we will work towards that plan in terms of future development."
The city has been interested in the property since before the former owner, Good Earth Technologies, went bankrupt in 2008 at the start of the Great Recession, Kingston said. Good Earth had planned 40 upscale homes and 194 condominium units for the property, but nothing was built. The EDA tried to buy the property from States Resources Corp., a Nebraska-based mortgage lender that has the deed of trust, but could not agree on a price, Kingston said.
Good Earth Technologies owes about $375,000 in taxes and legal fees to the city, attorney Jim Elliott, who is representing the city, told the Daily Press last month. Wednesday's sale proceeds will cover the back taxes and an additional $212,000 the city paid to remove 13 piles of debris from the site a few weeks ago, Kingston said.
The city and States Resources Corp. jointly paid for an environmental assessment in 2015 that found the soil and groundwater on the site were contaminated with petroleum and certain metals. Tranzon's ad said that another $125,000 worth of cleanup could be done on the site. The city will decide on what to do with that going forward, Kingston said. Rohlf said the city has been talking to the Environmental Protection Agency about securing a grant to pay for the cleanup.

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