It’s official. After a decade in the making, the industrial megaplex that is Stillwater Business Park has signed its first tenant.
After agreeing to a non-binding letter of intent in November, which was passed by the city council in December, Southern Aluminum Finishing Company signed a binding letter of intent for the 16.75-acre parcel Jan. 4.
Southern Aluminum distributes, processes and custom-finishes aluminum for commercial construction. Family-owned and Atlanta-based, it has had a Redding facility off Caterpillar Road since 2007. There are currently eight employees at that location.
The finishing company will be a good match for Redding’s 678-acre industrial park, and the city is seeking more tenants, said Pat Keener, economic development liaison for the city and broker of Stillwater parcels.
“We’ve been trying to take a hard look at the companies that are able to send out goods through trucking, as there is no rail access at Stillwater,” Keener said. “Typically it’s been companies focusing on medical devices, plastics, and others in four or five sectors, but we certainly haven’t closed the door to any possibilities.”
Keener opened discussions with SAF about four years ago when the aluminum company’s West Coast orders (primarily in California, Oregon and Washington) began to increase, and the business looked to expand its operation.
“We first scouted out Redding in 2006,” said Jim McClatchey, who owns the company along with two brothers. “It’s halfway between Seattle and L.A., and we had good experiences in Redding,” McClatchey said.
There are a number of other business parks in the state, and Southern Aluminum scouted out some in Galt, outside Sacramento, and in Livermore, in the East Bay area, “but they were too crowded and expensive. It’s important to be wanted, and we felt wanted in Redding,” McClatchey said.
McClatchey and his wife moved to Redding for several months, from February to May of 2007, in order to set up a Redding location. During that time, he went through a “lengthy process” trying to secure some land in an area next to the Clear Creek Waste Water Treatment Plant, which didn’t amount to more than a use permit. “But when the ‘Radical 10’ came along,” McClatchey said, “we talked with Kurt Startman about the free land.”
The “Radical 10 in ’10” were 10 ideas hatched to help stimulate the local economy. As the first tenant of the business park, Southern Aluminum benefits from one of the ideas proposed by Shasta Builders’ Exchange CEO Kent Dagg: the “First Lot Free” program. The “First Lot” agreement includes a list of benchmarks and criteria Southern Aluminum must meet to receive the full list of incentives, including reduced electric utility rates, impact fee waivers, job credits, tax credits and others. The most appealing of the incentives, however, is that if all criteria are met, the $1.86-million purchase price of the parcel will be waived.
Stillwater Business Park has been carried by the city from idea to construction to completion, said Greg Clark, assistant to the City Manager. “It’s fairly unique for a city to do this start to finish, and it usually isn’t the case, but the city decided this was the best way to help build an economic base and bring jobs to the area.”
The City of Redding will carry a silent second deed of trust on the Southern Aluminum parcel, and will forgive in 20-percent increments the balance of the purchase price over the period of four years of successfully meeting benchmarks.
Part of the agreement requirements include benchmarks for job creation – at least 25 jobs by June 30, 2012, and a minimum of 50 jobs over a four-year period. Average pay rates of those jobs would be more than $17 per hour, and would include health benefits.
The company intends to first build a 50,000-square-foot building. Plans in the future include two additional buildings, for a total of 188,000 square feet.
“We want to start on this ASAP. An aggressive timetable would be that we’re in the building by the end of the year,” McClatchey said.
Stillwater is one of only five such parks listed on the California Certified Site Program. Under Governor Schwarzenegger’s plan, the sites would be certified move-in ready, having environmental, planning and development processes taken care of in advance, allowing project development and initiation of use in the shortest time possible. A 678-acre project with 314 acres of shovel-ready parcels, Stillwater is by far the largest of the five certified sites.
The park’s ribbon-cutting ceremony was in April of 2010. Since then there have been companies interested in the park, including one other non-binding letter of intent that did not come to fruition.
“They’ve got some internal stuff to work out, but their first choice is still Redding. We’re still No. 1 on their list,” Keener said of that company. Even the non-binding letter helped attract other businesses, he said. “It’s been like a shot in the arm. The first customer signs and all the others seem to get their head out of the sand. We consider this the first of many opportunities.”
Clark also mentioned that an incentives package is already in place for future businesses signing to Stillwater. There are already talks with ancillary and supporting businesses of Southern Aluminum seeking tenancy.
“Essentially, anyone interested in locating to Redding, the City would sit down with them and talk about what they’re looking for,” Clark said. “We’re competing with other business parks offering sometimes very enticing incentives, and we’ll look at whatever we can to compete, but it’s gotta be a win-win.”
Joshua Corbelli wears a number of hats these days – journalist, small business owner and team builder. He’s always had a place in his heart for the written word, and works, though not as much as he’d like, to keep his skills sharp. Contact him at joshua.corbelli@gmail.com.
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