Relocating and Consolidating Manufacturing Processes In New England

While the economy recovers, we are seeing a number of companies in manufacturing industries pursuing relocation and consolidation projects. As some manufacturing companies begin to return to stronger financial positions, they are able to take advantage of opportunities in industrial real estate created by the economic downturn.  They are consolidating operations into large industrial buildings which have remained vacant. These opportunities can result in improved manufacturing efficiency, space for expansion, and even tax benefits.

Taking Over an Old Building & Local Support

Northeast Quality Services, in Cromwell, CT, is one company taking advantage of the unusual real estate climate.  The company will pay $100,000 in tax liens, a small fraction of the $1.4 million in taxes and interest that had accumulated over 15 years from the previous owners.  That payment will allow them to negotiate the purchase of, or, foreclose on the property.  Northeast will then be able to purchase a vacant building for a good price, allowing them to expand and improve their process.

Because many cities and towns are looking to boost economic development and attract strong employers, projects like this one are receiving support from local governments. Specifically, this building and land were contaminated (a brown field site) and the previous owners owed a large sum in taxes over the last 15 years.  To entice the company, the government is providing tax breaks for taking the space and the state Department of Energy and Environmental Protection is cleaning up the site with the previous building owners. Northeast Quality Services is taking what would be considered an undesirable building and turning it into a positive business-viable situation for the town, the environment, and the local industry.

Zoning Laws & Growth

Cheerpack in Plymouth, MA outgrew its current location soon after its launch and had to look for new space.  Eventually it was enticed to a vacant building in another town.  While the company had hoped to stay in Plymouth, the neighboring town of West Bridgewater provided more industrially zoned property and therefore better opportunities to move into a larger space.  Plymouth, which historically, had more industrial space, had been creating more commercially zoned property in recent years, leaving fewer options for the growing company.  West Bridgewater has welcomed heavy industry and is working with the company on permitting.  Because the new location is so close the existing location, workers can keep their jobs without moving.  By moving to a more industry-friendly town, Cheerpack found a great building, local support, and potential tax breaks.

We continue to see more manufacturers relocating and taking advantage of well-priced, vacant industrial real estate, and government support for growing employers.   Sometimes these moves provide the additional benefit of improving the environment by prompting the remediation of contaminated real estate.  While vacant industrial buildings may not be a great fit for all companies, and can even seem like a tough sell, for the right industrial client, they present an excellent opportunity.