Regal Beloit plant under contract again

The Springfield area’s largest vacant manufacturing facility is under contract. Again.

Seven months ago, it seemed new life would transform the former Regal Beloit manufacturing plant on East Sunshine Street into a retail center when a real estate development company that includes the owner of the St. Louis Rams agreed to buy it.

Those plans fell through, but listing agent Dave Murray of R.B. Murray Co. said the 325,355-square-foot building on 43 acres was placed under contract again about a month ago. He declined to disclose the latest would-be buyer or the plans for the property. The current contract expires at the end of the year.

Kroenke and company
R.B. Murray listed the 2401 E. Sunshine St. plant for sale in 2014 at $11 million for Beloit, Wis.-based owner Regal Beloit Corp. (NYSE: RBC). The manufacturer announced in July 2013 it was laying off roughly 330 workers over an 18-month period to move the manufacturing of motors and components to other Regal operations in the United States and Mexico.

Murray first connected with St. Louis-based UTW Realty LLC, which includes real estate mogul and Rams owner Stan Kroenke as a partner, in December 2014.

The property is zoned heavy manufacturing, which means a rezoning would have been required to convert the property into a retail center. UTW Realty sought incentives to help pay for redevelopment, but the company walked away from its plans before making a formal request with the city.

Alan Bornstein, a St. Louis attorney and partner with Kroenke at UTW Realty, said the development company considered tax increment financing, transportation development districts and community improvement districts through the city.

“We reached our conclusion before we reached any final conclusion on the specifics of those programs,” Bornstein said.

Kroenke is a partner in certain UTW projects, and Bornstein expected the Columbia businessman would have been involved in the redevelopment of the Regal Beloit plant via The Kroenke Group, which co-developed James River Commons in Springfield with Ron Stenger Cos. in 2009. The development is anchored by Sam’s Club and Academy Sports & Outdoors. Kroenke, who is married to Ann Walton Kroenke – niece of Wal-Mart Stores Inc. founder Sam Walton – also holds ownership stakes in the Denver Nuggets, the Colorado Avalanche and British soccer club Arsenal.

Bornstein said the development plans in Springfield did not involve Wal-Mart Stores, but UTW was seeking retailers in hardware to sporting goods.

He said UTW left the project with no ill will toward the city or the sellers.

“It was a combination of the costs associated with doing the redevelopment and converting the property from an industrial manufacturing warehouse use to a retail use, the timing and complexity of the entitlement and incentives that we thought would be necessary, the initial response of retail users to the particular site and other opportunities we have outside the marketplace that, on balance, we concluded were a better use of our time than continuing with the Regal Beloit site,” Bornstein said, pointing to a retail project in the works in Rolla.

Springfield Planning and Development Director Mary Lilly Smith said city officials would not comment on preliminary discussions with potential property owners.

“Until an application is filed for some official action – rezoning, incentives, et cetera – I cannot comment on development cases,” she said via email.

Second contract
Murray said the current entity under contract asked him not to discuss its plans while it works through the due-diligence phase.

“I can’t say anything about use. I can’t say anything about what they do or what they plan. That would compromise what they’ve asked me to do,” Murray said. “I am going to know by the end of the year whether it goes or not. This one is not anywhere near as complicated as the first contract I had. It’s much simpler, even though none of them is simple.”

Though the property’s future is uncertain, Springfield Area Chamber of Commerce President and CEO Matt Morrow is confident the versatile land use will attract a suitor.

“Whatever ends up happening to it, whatever type of buyer comes along, it will generate significant capital investment and jobs,” he said. “That particular location is very versatile. There’s rail access, which makes it a good fit for a lot of industrial uses. There’s highway access, which makes it nice for distribution. There’s proximity to cars and rooftops, which makes it potentially a real good fit for retail. It’s just a real versatile location.”