Construction contract, lease approved for Staunton River Plastics

CHATHAM, Va. — The Pittsylvania County Industrial Development Authority (IDA) last night approved a construction contract and amended facility lease for the Staunton River Plastics, Inc. manufacturing facility at the Southern Virginia Multimodal Park in Hurt that will bring a $34 million investment and 200 new jobs to the region. At the same meeting, the IDA elected to not yet approve another contract involving construction of a shell building in Danville.

Pittsylvania County’s Director of Economic Development, Matt Rowe, told the board last night he had landed on a design and construction company that specializes in building industrial facilities and was “extremely aggressive” with its quote for the project, which was first announced in May 2020.

“The company we vetted was ARCO out of Columbia, Maryland,” Rowe said. “Their cost was almost $10 per square foot cheaper than the competition.”

ARCO was selected from four builders’ quotes obtained for the project. For a number of reasons, it was the most favorable, Rowe said.

The COVID-19 pandemic affected an unforeseeable hike in steel prices in 2020. Due to the firm’s size, however, they were able to lock in competitive rates on steel.

“It’s a great price,” Rowe added. “The firm is also doing work nearby…the quote was extremely aggressive.”

Although renderings will not be made available to the public until groundbreaking, Rowe described the facility as a concrete building featuring a glass door front with the company’s logo and colors. Rowe said he wanted to make sure the building was not “overly nice” to ensure the potential for multipurpose use in the instance of a possible future tenant.

The facility should be ready for closing in early May, Rowe said. The company has already signed the facility lease, and DEQ and stormwater permits have been obtained. Then, “it’s time to put shovels in the ground,” Rowe said.

ARCO will get to work on a 150,000-square-foot turnkey building complete with water tanks, office spaces and other necessities for the price of $65.77 per square foot. This will mark the first of two buildings, the second of which will be about 100,000 square feet. Staunton River Plastics has already put up $1.5 million in upfront rent.

Staunton River Plastics is a wholly owned subsidiary of Rage Corporation, a Hilliard, Ohio-based plastics manufacturer specializing in products used in the everyday beauty and healthcare industry. This plant will complement that company’s existing Altvista operation and supply a long-term order for a Fortune 500 company.

“The Fortune 500 companies they have contracts with favor machines over assembly,” Rowe said. “That means more capital in machines and higher wage jobs.”

There is a 12-month schedule for construction of the facility. The Pittsylvania County IDA approved the facility lease and construction contract unanimously.

The Pittsylvania County Board of Supervisors Tuesday evening also approved a moral obligation for the approximately $8.5 million loan funding construction of the facility. In doing so, the board indicated it would accept responsibility for paying back the loan in the event that the IDA is unable to.

“This Board of Supervisors is thrilled about the progress and development happening in the northern end of our county,” said Tim Dudley, supervisor for the Staunton River District. “We view this moral obligation as a simple way for us to facilitate improved economic opportunity for our residents and enhance prosperity for our county.”

For its second item of business, the IDA heard updates on the proposed 30,000-square-foot shell building that is to be built in collaboration with the City of Danville IDA and its $1 million Tobacco Commission Grant fund. The rest of the cost would remain to be financed by Pittsylvania County.

“There is a high likelihood this could turn into a build-to-suit,” Rowe said. “That’s great news…we have a pretty favorable potential tenant.”

Discussion since early this year has revolved around construction of the shell building near the Institute for Advanced Learning and Research in Danville, but Rowe told IDA Chairman Joey Faucette at Thursday night’s meeting that the location has not been deiced yet, “but it’s leaning one way.” Rowe will come back to the IDA at a future meeting to select the final site.

The IDA voted to table approval of the contract, citing a lack of thoroughness and the blind trust they felt they would have to put in the City of Danville, seeing as this project is a collaborative effort between both IDA boards with an enormous financial obligation attached.

In the proposed contract, Pittsylvania County and the City of Danville would split the $2.85 million total cost. An MOU cannot be issued until the final contract agreements are made, but “To remain in this project, we need to join this contract this evening,” Rowe said at the meeting, which took place at the Olde Dominion Agricultural Complex in Chatham. “It’s extremely desirous for the city IDA that the county IDA approve this tonight.”

After the board was advised by Pittsylvania County Attorney J. Vaden Hunt to refrain from taking action, Rowe eventually acquiesced to the board and told them the county could still move forward with the project without approval Thursday night, as long as a revised contract could be presented in an expeditious manner. The IDA board is requesting the following in order to proceed: a proposed draft of the MOU, confirmation from Danville-Pittsylvania RIFA on the exact location of the shell building, design specifics, scope of work, budget and financing method.

Rowe told the Star-Tribune Friday afternoon that he has already drafted the letter requested by the IDA.

The builder selected for the shell building is Gretna-based Blair Construction, Inc.

The revised contract will be reviewed on or before the date of the IDA’s May meeting.


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