Related to this story
Topics Mergers & Acquisitions, Packaging, Injection Molding
Companies & Associations Erie Plastics Corp.
After several years, the former Erie Plastics plant in Corry, Pa., finally has a buyer.
The Corry Area Industrial Development Corp. purchased the building, Erie’s former headquarters, from Berry Plastics Corp. for $2.7 million.
The roughly 500,000 square-foot building will be divided up and leased to four tenants, said Rick Novotny, executive director of the development corp.
One, a packaging company that manufactures custom wooden and metal pallets for industrial applications, has already signed a lease. Two other companies, both involved in the oil and gas industry, have also expressed interest, he said.
Novotny would not name the companies until leases are finalized, likely in the next week or so.
Packaging giant Berry obtained the facility in 2008 when it acquired the assets of bankrupt Erie Plastics. The company put it on the market in 2010 and, through commercial real estate agency Jones Lang LaSalle, listed the property at $10 per square foot or about $5.1 million, according to previous Plastics News stories.
The plant never attracted a buyer, however. Berry took the building off the market and considered using it for its own operations.
The development corp. approached Berry about purchasing the building. The group was very interested in the facility for Corry’s sake and had tenants lined up, and because Berry was not going to use the building, the company sold it, said Kevin L. Wilson, director of corporate development at Berry.
Berry has facilities throughout the United States, many of them in small- to medium-sized communities where a manufacturing business is one of the drivers of the local community. The facility “is important to [the community] to keep the [economic] engine running,” Wilson said. “If we didn’t need the building, it made sense for them to have it.”
The $2.7 million was the market price for the building as-is, he said.
The development corporation purchased the building in a private transaction. The two parties negotiated within a very tight bid spread and did not take the building’s previous list price into account, he said.
“I think it was a good transaction for everybody involved,” he said. “It was a good business decisions both for them and for us.”
The building’s first tenants will bring 50-70 jobs to the area. When the building is filled to capacity, it could employ 250-300, Novotny said, adding that it could take 3-5 years to reach that point.
It’s not at the level of Erie Plastics, which employed close to 400 people before shutting down, but reflects changes in technology and improvements in automation, he said.
“[The plant] has been empty for four years. It was nothing for a long time. Putting 50 [people] in there is something,” he said.
Though the facility “was a really nice building set up for plastics companies,” it unfortunately hasn’t attracted any of them yet, Novotny said. He added that the companies interested in the building are all involved in northwest Pennsylvania’s oil and gas boom.
The facility, situated on 30 acres, was built in the 1960s and renovated in the early 2000s. Erie moved into the building in 2001 and ran 67 injection molding machines.
The plant was built in a way that makes it easy to subdivide. It’s hard to find one company that needs a half-million square foot building, but easier to attract several companies that need about 125,000 square-feet, Novotny said.
The building needs some minor repairs, but is move-in ready. If a plastics company did want to move in “They’d find a gorgeous plastics set-up with feedstock system silos, chillers… all that kind of stuff. It’s all still there” he said. “We’d be happy to get the company going.”
The Corry Area Industrial Development Corp. is part of the city’s industrial and community development arm. The group offers business support services including leasable facilities, low-interest financing, economic assistance and training and development.