They say that great minds think alike, so if you were interested in yesterday’s message about real estate in Kannapolis N.C. (https://www.garyascott.com/archives/2004/10/13/1097/index.html), take a look at what a reader shared about this investment opportunity.
“Gary, FYI – here are two articles on the Pillowtex facility purchase in Kannapolis:
“From OCTOBER 4 Charlotte Business Journal:
A year after the Pillowtex Corp. ceased operation, there's growing interest in the defunct textile maker's assets — both its largest manufacturing plant and two of its four principal brands.
“Manchester Real Estate & Construction in New York has submitted the high bid for the 5.9 million-square-foot Kannapolis Plant 1, according to sources familiar with the offer. But the bid price and plans for the plant weren't disclosed.
“Richard Kalikow, a principal at Manchester Real Estate, couldn't be reached for comment.
“Manchester Real Estate is a New York development and construction company. Kalikow, its president and founder, serves on the board of the Grand Central Partnership, one of the largest U.S. business improvement districts. The partnership's goal is to revitalize the 68-block area around Grand Central Terminal in Midtown Manhattan.
“Now Manchester's high bid becomes the starting point for an auction of Plant 1, says Mark Power, the attorney representing Pillowtex unsecured creditors in the company's bankruptcy.
“Other proposals for the building, such as Ken Lingafelt's $3 million bid to build his long-discussed $50-million World Sports Center at the Plant 1 site, could be considered, observers say.
“But Lingafelt would have to raise his bid for the property. Power says Lingafelt's bid is lower than the Manchester bid, which becomes the minimum bid for the auction of Plant 1.
“This isn't Manchester Real Estate's first run at Pillowtex assets. The company had previously submitted a failed bid of $10 million for Plant 4 on South Main Street in Kannapolis and a warehouse in Macon, Ga. Also two of the four of Pillowtex's main brands of products — Royal Velvet and Fieldcrest — have purchasers. Products will be on the store shelves next year, the winning marketers say.
“Kohl's Corp. will market Royal Velvet in its stores and on its website, the company says. Target Corp. is the exclusive retailer for Fieldcrest bed and bath products, the company says.
“Agreements for two other former principal Pillowtex lines — Charisma and Cannon — haven't yet been reached. Just what happens to the sprawling 158 acres of Plant 1 is vitally important to Kannapolis, says Jennifer Woodford, Kannapolis spokeswoman. 'We're really interested in what type of project would come downtown because it's a block away from city center,' she says.
“The city would prefer to deal with Lingafelt because it already has an agreement to buy the 130,000-square-foot former Pillowtex corporate office for $1 million, says Mike Legg, Kannapolis city manager. ‘The city will back him and be involved in that project.’
“Lingafelt proposes a 300,000-square-foot arena that could be used for a variety of sports, from basketball to skateboarding and soccer to track and field. Many of the buildings at the site would be razed to make room for the arena and parking at the site.
“Legg believes Atlantic America Properties Inc., which owns the $50 million Cannon Village, located across the street from the former Pillowtex headquarters, will also join in some aspect of the development of the Plant 1 site.‘With its investment in Kannapolis, we believe it will emerge at some point in the process,' he says.
“Lynn Scott Safrit, president of Atlantic American, which has seen two bids for Plant 1 fail in the last year, is upset that the Manchester Real Estate bid has gotten so far without details disclosed about the company's plans for the site. ‘I find it disturbing that the offer is taken seriously,’ she says. 'Meanwhile, Atlantic American is watching to determine if it should again submit a bid for the property,' Safrit says.
“A 2002 appraisal of Plant 1 buildings and land states the property is worth $44 million. The Cabarrus County tax value of the property is listed at $27.6 million.
“Pillowtex stopped production in July 2003, eliminating 4,300 jobs in Cabarrus and Rowan counties. All told, 7,650 Pillowtex workers lost their jobs. The demise of Pillowtex also put Plant 1 and 15 other manufacturing or distribution plants up for sale around the country. Some of the plants have been sold, including Plant 4, a 687,000-square-foot facility that is being converted into a mixture of retail, office and residential uses.”
The second article is from the Salisbury Post:
“The announcement of a deal to sell Pillowtex Plant 1 to a New York real estate firm may bring a West Coast player to the bidding table.
“David H. Murdock, the California billionaire who owns Cannon Village and once owned Cannon Mills, is 'weighing his options,' according to Kannapolis City Manager Mike Legg.
“Last month, Murdock agreed to buy Plant 4 from a Charlotte businessman, who is currently salvaging brick, metal and wood from the South Main Street site.
“Legg made clear city officials are not pleased with Pillowtex Corp.'s announcement Tuesday that a creditors' committee had endorsed a bid by New York real estate developer Manchester Real Estate & Construction to acquire Plant 1.
“Legg said he spoke with a Manchester official who said the company has no development plans for the property. 'He made no bones — they want the tax credits short term. Long term, they do some type of redevelopment. Now they have absolutely no plan,' Legg said.
“In its announcement, Pillowtex said Manchester would pay $3 million in cash and pledge a future payment of $1.5 million. Manchester would acquire the 158-acre Plant 1 site, which includes 5.8 million square feet under roof, and 119 acres off West C Street and Glenn Avenue that includes the wastewater pre-treatment facility. Manchester would set up a new limited liability company, and Pillowtex would get one-third ownership in the company. That one-third share would be transferred to the unsecured creditors. To accomplish that, Pillowtex would reorganize and provide shares of stock to its 30 unsecured creditors, including Duke Power, SouthTrust Bank and UNITE (Union of Needletrades, Industrial and Textile Employees), which represented many of the 4,000 plus workers who lost their jobs when the company closed on July 30, 2003.
“Pillowtex's decision to sign a letter of intent to sell to Manchester is a formality, a starting point for a bankruptcy court auction. Under court procedure, any other bidder must top Manchester's offer of $4.8 million.
“Legg said the city still wants to buy the main office building at Plant 1 for city offices. But city officials are primarily interested in finding a developer who has good project for the whole property.
“In closed session Monday night, City Council discussed the Pillowtex property situation and the role the city hopes to play.
“The city has worked with Cabarrus County developer Ken Lingafelt, whose investment group wants to build a sports complex on the Plant 1 site. Lingafelt had offered $3 million for Plant 1 and had agreed to sell the main office building to the city for $1 million.
“Legg said Tuesday he isn't sure what Lingafelt's position is following Tuesday's announcement. Lingafelt did not immediately return a call from the Citizen.
“But Legg said Murdock is doing his own investigation and weighing his options.”
This is where great real estate opportunity can arise, when a small town shifts utility from a small town to something that serves a large city. These big developers in Kannapolis and all over could cause this to happen.
Until next message, good investing!
P.S. Join us at our upcoming International Business Made EZ course where we will also be joined by Thomas Fischer of Copenhagen and will also have a Small town USA and international real estate review.
Here are what others shared about our course last weekend.
“We tremendously enjoyed the time with you, and the intellectual life, and the food, were great, as, of course, were the people.”
“Dear Gary, Many thanks to you & Merri for an extraordinary weekend. I'm definitely thinking of coming to Ecuador in February with perhaps a month's stint, in advance, at the Spanish school. Kind regards,”
“Dear Gary, Just a short note to say that I enjoyed the Seminar this past weekend. Thank you for all the good and nutritious food as well as the gracious hospitality provided by you and Merri.”
“Gary & Merri, Just wanted to drop you a quick line and let you know that I was completely recharged after only three days of 'intensive care' rest at Little Horse Creek Farm. As usual, there were several extremely beneficial contacts made. I got the direction I needed (without your even knowing it) on how to approach my 'story' to the Moderns vs Patients (more CC's) in the brochures I am creating for the surgery hot/cold wrap. Your reminder of the possibilities with genuine foreign corps will come in handy if I have future production made in China or elsewhere overseas. The US Virgin Island idea is off the map and I would definitely attend a seminar in the spring (why wait?) there. Ed, with his background in the Oil business with Shell, gave me a pearl of unimaginable value concerning a 'friendly' pesticide that we can use in our wood/paper waterproofing business. I talked to the president of the company and he will be coming to the next seminar with me because he is a closet CC and our water proofing process will be about the best thing to ever happen to the rain forest and wood industry — I can see where we can actually cut back wood production in the near future if the wood we do use has a multiplied life expectancy. 'Green' is written all over this whole process. Lastly, I believe I told Merri, that I have lost about 15 lbs on the South Beach diet and I lost another 1.5 pounds at your place. Truly unbelievable since you usually gain weight on trips. Merri, you may have to publish some recipes soon so all of us can continue the excellent nutrition we experienced at Little Creek. Put it all together: the perfect mix of the right people, blended with just the right progression of ideas and nurtured by the healthiest fuel and plenty of relaxing restful sleep in a beautiful setting — not to mention being properly acclimated by one of Tom Brown's books. What do you get? Renewal!”
“Dear Gary and Merri: Thank you for hosting the wonderful seminar. It was very fulfilling both mentally and spiritually. In addition, there was the great sharing and building of friendship with Karl and Bill. I feel a bit like a boa constrictor that has swallowed a rabbit. I need to slither out into the sun and digest a bit. Warmest regards,”
“Gary, Great seminar, thank you. Your command of the greater global view of investing, cultural trends and finance raised the bar for me and stimulated a much broader perspective. As Michael Douglas said about money in one of his movies, 'there's an ocean of it out there'. It seems that all one has to do to be successful is choose enterprises and investments that are aligned with their values, interests, knowledge and passions. I appreciate the spiritual component in the perspective that you inspire.
Many blessings. See you in November.”