Megaprojects draw service companies to parish
Color/Paper“With all of the plants and plant expansions, the interest is just tremendous.” Color/Paperdeveloper L.J. Grezaffi, owner of Ascension Commerce Center
Companies that will service the many multibillion-dollar, mega projects under construction or in the planning stages are already scouting industrial-commercial sites in the Ascension Parish area.
Developer L.J. Grezaffi, owner of the 700-acre Ascension Commerce Center, said he is fielding calls from Houston firms as well as area companies.
“With all of the plants and plant expansions, the interest is just tremendous,” Grezaffi said.
But so far, most companies haven’t quite reached the comfort level — in the economy and in the projects — needed to pull the trigger, Grezaffi said.
Todd Pevey with MIE Properties, an expert in the local industrial real estate market, said although a few firms have bought properties, more are still in the kicking-the-tires phase.
Subfeeders to the petrochemical industry, the automation, instrumentation and engineering companies, make up the bulk of the callers, Pevey said. Service companies are looking at properties now because it takes time to find a piece of land that meets their needs, draw up plans and construct a building.
“It’s a one-and-half- to two-year process for these people to get up and running from the time they buy a piece of property,” Pevey said.
There will be many new facilities to service in Ascension Parish. Methanex is spending $1 billion to move two methanol plants to Geismar from Chile; CF Industries is putting $2.1 billion into an ammonia plant in Donaldsonville; and Westlake Vinyls has a new $467 million chlor alkali facility in Geismar. And, more could be on the way.
Mike Eades, chief executive officer of Ascension Economic Development Corp., said potential projects are rated A, B or C. The “A” list consists of projects with an 80 percent likelihood of being built, although not necessarily in Ascension. The “B’s” are projects with around a 50 percent chance of happening. The “C’s” are below that.
“I like to say the C’s are toads. The B’s are pretty toads. And the A’s are princes,” Eades said.
AEDC’s project list consists of six C’s, 16 B’s and 18 A’s, Eades said. Altogether the projects have a potential capital investment of $12.8 billion and would create nearly 2,700 jobs.
Both Grezaffi and Pevey have fielded calls from out-of-state firms offering $5,000 to $10,000 for purchase options on likely sites. Both men laughed at the idea of accepting such a low offer.. Pevey said he has never seen anything like it.
“The last six to 12 months, crazy stuff like that is happening,” Pevey said.
On the other hand, when was the last time a company shipped two plants from Chile to Geismar?
Eades said the parish is doing its best to help companies looking for industrial sites.
AEDC’s website lists 17 industrial sites with addresses, acreage and links to maps of the properties. In addition, four of the sites listed are state-certified, which means they have completed a rigorous review process from Louisiana Economic Development and URS, an independent engineering firm. The most recent addition is the 83-acre Gateway II on La. 30.
Grezaffi is also making ready.
He’s spending $1 million to build the last mile of a road that will run through his park and connect La. 30 to La. 73.
“It’s not going to be a small street like it would be in a commercial subdivision or an industrial subdivision,” Grezaffi said. “It’s going to a major thoroughfare.”
The concrete road will be 8 inches thick, 27 feet wide and have 8-foot shoulders. It will meet all the parish and state requirements and allow Grezaffi to develop the second half of the 700-acre park.
Grezaffi expects the park to draw 60 or 70 more companies who will occupy lots ranging in size from around an acre up to 15 acres.
The Ascension Commerce Center is now in its fourth phase. The park is home to around 50 companies, all of whom serve the petroleum and chemical industries. The occupants include James Construction Group, Bengal Transport, Total Energy Solutions and Fabricated Pipe.
“We adjust to the need. Someone needs 10 acres, we got 10 acres. Someone needs 340, I got 340,” Grezaffi said.
Grezaffi began developing the park more than a decade ago. He originally bought the land for its timber. But Grezaffi quickly realized the high, dry land with close to 2 miles fronting La. 30 and around 1.5 miles fronting La. 73 made a lot of sense as a commercial property.
“After that I realized the potential was there to do a development without a hell of a lot of infrastructure costs,” Grezaffi said.
Entergy Corp. ran the power lines tying lines on La. 73 and La. 30, and Grezaffi installed the water lines himself. He also built a concrete road for the first tenants.
The park developed slowly but gained momentum until 2008, when the recession hit and buying slowed.
But with all of the interest and activity generated by major projects, Grezaffi doesn’t expect the second half of the park will take long to develop.