Manufacturer selects PIC West at its halfway point

Last edited 1:28 p.m., July 27, 2016

Springfield-based industrial washer parts manufacturer JRI Holdings Inc.’s expansion into Partnership Industrial Center West comes as the public-private partnership nears the halfway point in development.

Ryan Mooney, the Springfield Area Chamber of Commerce’s senior vice president of economic development, said roughly 135 acres have been sold at the 300-acre industrial park.

The development-ready land costs $65,000 per acre, which is based on a cost-recovery model partners created to recoup expenses, Mooney said. The chamber’s economic development arm, the Springfield Business Development Corp., and the city of Springfield jointly own PIC West, and sales decisions are made by an administrative council with representation by both partners.

JRI Holdings, the parent company of JRI Industries and Jensen Fabricating Engineers Inc., plan to lease a 66,000-square-foot building from general contractor Rich Kramer Construction for undisclosed terms, said Ken Edstrom, JRI’s chief financial officer. The contractor bought 10 acres – equating to around $650,000 at PIC West’s listing price – for the project scheduled to wrap in January 2017.

Development strategy
Officials say the $13.8 million PIC West – which could take another $2.5 million to build out for future tenants – was designed more as a development tool than a moneymaker.

“Our intent is to have development-ready ground as an economic development marketing asset and a tool,” Mooney said. “The whole idea behind this is not to make a profit.”

Development partners had a similar goal in mind with Partnership Industrial Center on the east side of Springfield, but differing economies meant one filled sooner than the other.

Mooney said PIC’s first lot sold in January 1994 to Buckhorn Inc., and lots were fully sold in 13 years. The partners reached an agreement for the first lot at PIC West in November 2001, which puts it now at the 15-year mark.

“It’s a completely different time than it was then,” he said, noting when PIC was going up in the 1990s, an economic and manufacturing boom was in play. “As Partnership Industrial Center West came online, we were headed into the recession caused after Sept. 11 and the downturn in manufacturing that occurred along with that.”

Post-recession, Mooney said interest in PIC West has picked up. In recent years, manufacturer Tank Components Industries and EFCO Corp. added facilities. Now, he said a couple tracts have options and some have first rights of refusal, though he declined to disclose potential buyers.

“JRI is the first of what we hope to be several,” he said.

Time to clean
Edstrom said the manufacturer would double its workspace when it consolidates two Springfield facilities on Cedarbrook Avenue and Florida Street next year at PIC West.

“We’re out of room,” he said. “We need bigger machines, and we don’t have enough room for the volume of work that we’re not only doing currently but where we want to go.”

Declining to disclose sales figures, Edstrom said JRI makes 500-650 cleaning units a year between the Springfield facilities and a plant it operates in Connecticut after buying out Jensen Fabricating Engineers in 2013.

The companies build small- and large-scale machines for clients in the automotive, aerospace, oil and gas, food and medical industries. Local clients include SRC Holdings Corp., and JRI also builds cleaning machines for such Fortune 500 companies as Boeing Co. (NYSE: BA), Eli Lilly and Co. (NSYE: LLY) and Safety-Kleen Systems Inc.

Large clients often travel to Springfield to try out the machines before purchasing, so PIC West represented a prime location for JRI given its proximity to Springfield-Branson National Airport and Interstate 44.

“Anytime we can make a trip to Springfield a pleasant experience, that always sticks in their mind in a positive way,” Edstrom said.

Springfield had competition, as JRI also considered expanding at the Berlin, Conn., home of Jensen Fabricating Engineers.

Edstrom said it came down to a lower cost of doing business, as well as a strong workforce in the area.

JRI plans to invest $5.6 million on the project, including the addition of 13 full-time employees to its local workforce of 73.

Local and state incentives also played a role.

Amy Susan, director of communications and marketing for the Missouri Department of Economic Development, said JRI was approved for an incentives package valued at $92,820 through the Missouri Works program.

“Our incentives are performance based, meaning they can access benefits for the jobs they create if they meet the criteria,” she said.

Locally, Mooney said JRI qualified for Springfield’s Enhanced Enterprise Zone, which allows companies to receive property tax abatement on 50 percent of the new investment for 10 years. He said companies can qualify if they create at least two new jobs and make $100,000 worth of capital investment.

With the new facility, Edstrom said JRI expects sales to double within five years. He declined to disclose how many machines the new plant would build.

“We are aggressively going for additional market share,” he said.