Now that the town of Phillipsburg, N.J., owns a large piece of the former Ingersoll Rand tract, town officials are closer to landing a developer to revitalize the site.
“We are looking for a developer,” Phillipsburg Mayor Harry Wyant. “We may parcel it out individually; ideally we would want to have a developer come in and purchase the entire site.”
Wyant said the site currently is in a court-appointed receivership status since former owner Preferred Unlimited Inc. had defaulted on its loan obligations. Richard Wenner, an attorney for Phillipsburg, said Preferred owed hundreds of thousands in back taxes and donated the property to the town for $1 for forgiveness of back taxes.
The town now owns 220 acres of the vacant Ingersoll Rand land surrounding the site and there are another 100 acres in neighboring Lopatcong Township that are owned by Ingersoll Rand, said Wyant.
“I don’t think we’ll get a large manufacturer for the entire site, but possibly smaller manufacturing,” he said.
The site would offer facilities for storing and distributing product and also offer retail potential, he added.
“It’s unique in both size and location,” said Wenner. A rail line for The Norfolk Southern Railway runs through it, he added. “The existence of rail does make the site attractive.”
Wenner said the North Jersey Transportation Planning Authority commissioned a Morris/Warren County rail corridor study that would examine the primary rail freight corridor serving Morris and Warren counties, running from Phillipsburg to Morristown.
The study will look at ways to improve the infrastructure and operational constraints along that corridor, including vertical clearances along the corridor that prevent the movement of plate “F” rail cars, a standard rail car used throughout the industry.
The study aims to help make existing rail-served industries along the corridor more competitive and attract new industrial development, a move that could aid the economic development of the Ingersoll Rand site.
“At this point, the state Economic Development Authority has provided us with a list of potential developers for the site,” said Wenner. Town officials are scheduled to meet with the EDA and their real estate and marketing staff on this week, he said.
The site is ideal for light industrial, although the redevelopment plan could be modified based upon advice from the state and its experts, said Wenner.
“The town is looking for ratables but they are also looking for jobs,” Wenner said. “I just don’t see retail happening just in terms of the economy right now. I’m not sure there’s a need.”
In addition to the site’s proximity to Route 22 and Interstate 78, another incentive for a developer would be the tax benefits of the Urban Enterprise Zone, which is part of the property, Wyant said. In this case, a developer could buy any materials, including construction materials, office equipment and interior furnishings such as carpets and lighting, tax-free for as long as the developer occupies the site.
At the EDA meeting, Wyant said town officials will work with the agency to develop a package of what the state could provide for tax incentives.
Though Wyant declined to name names, he said the town is talking with a couple of developers who have expressed interest in the site, including one based in New Jersey and another in California.
With improved industrial sites in the Lehigh Valley going for $140,000 per acre and higher, the value of the Ingersoll Rand site is probably closer to $80,000 to $90,000 per acre, or $16 million total value, said Michael Adams, vice president of NAI Summit, a commercial/industrial real estate firm in Allentown.
“If it will be sold to a developer, it will be worth less than $100,000 per acre,” said Adams.
As a comparison, land at Lehigh Valley Industrial Park VII in Bethlehem goes for about $100,000 to $125,000 per acre, said Adams.
Adams said the Ingersoll property would be good for a developer looking to buy or lease out industrial/flex buildings with a retail component.
Ingersoll Rand also is required by the state Department of Environmental Protection to remediate the entire site, and there’s been a tremendous amount of remediation done already, said Wyant.
Wenner said the DEP is overseeing the remediation and that the vast amount of contamination has to do with foundry sand, which was spread throughout the property by Ingersoll Rand operations.