Stuart Lichter has big plans for the former Goodyear plant in Tyler. Lichter, president of California-based investment firm Industrial Realty Group, or IRG, bought the 1.12 million-square-foot facility a few weeks ago and plans to reinvent the space to attract new businesses.
"Our plan basically is to release it," he said of the building, which sits on 155 acres on Texas Highway 31 West. "Take down pieces of it to make it more suitable for smaller users and leave pieces of it up so that it's a series of buildings that are more right-sized for the market."
He said breaking it down will attract companies looking for smaller spaces, and a company coming in to fill the entire facility is probably not going to happen in Tyler.
"It's just huge," he said of the building.
Mark Whatley, of Burns Commercial Properties, was the broker for the deal and said the Goodyear facility is one of the largest buildings that has sold in this part of the state in quite a while.
"It's very unique, not only for the region, but for the state," he said. "You don't usually see buildings of that size on the market, especially in East Texas."
Whatley said IRG looked at the property before Goodyear closed.
Goodyear began closing the manufacturing plant in 2008, and when the building went on the market in April 2009, the company was still in the process of shutting down small operations being done there.
Whatley said the closing process of IRG buying the building happened rather quickly, in a span of about 60 days. He said the company offers a lot more flexibility for something to be done with the building than Goodyear did. IRG will carve it up into smaller pieces to rent or sell the spaces to businesses.
"I think it could happen this year," he said. "We're getting a lot of activity from larger users."
Whatley said that if a company wants to come into a 100,000 or 150,000-square-foot space, the facility is really the only available property in the area.
'MAKING IT WORK'
Lichter has gotten to know Goodyear pretty well over the years.
The business relationship began when IRG bought a building from the tire manufacturer in Huntsville, Ala., several years ago. Since then, IRG has bought all of Goodyear's real estate, including its corporate headquarters, in Akron, Ohio, and leased some of it back to the company. And as a developer, IRG is now building Goodyear's new headquarters in Akron.
"We knew of this (Tyler) property and just started talking to them (Goodyear) about it," Lichter said.
Lichter said he is talking to a couple of possible users for the Goodyear building in Tyler now and just about any kind of business could be housed there.
"The building has great power; it has wonderful infrastructure; there's a lot of land," he said. "It's a great manufacturing building and parts of it are a great warehouse building. So there isn't much that could not fit into it."
But he said the size of the building could scare off some prospective businesses.
"I think the biggest issue is a lot of users look at it and get scared because if they are a 50,000- or 100,000-foot user, it's hard for them to imagine how a big building like this works for them and that's what we specialize in -- making it work for smaller companies, as opposed for the big company that had it."
The first round of changes to be made to the former Goodyear building in Tyler will be done to adapt the building and should be completed in a few months. He said IRG will do additional work for any specific company that wants to move into the building, to make it work for their needs.
The tire manufacturing building was built in the early 1960s and was Kelly Springfield before becoming Goodyear, Whatley said. The building was continually added onto and more land acquired into the 1980s, making the property the massive size it is today.
At the height of its operations, Goodyear had about 1,500 employees, Whatley said.
He said IRG buying and carving up the building gives them more options to lease or sell property to multiple smaller users instead of one big one.
For the last 35 years, IRG has specialized in taking over big, closed corporate and governmental facilities.
"We've done that umpteen times with umpteen corporations all over the country, and then we figure out what to do with them (the buildings)," he said, adding that IRG is probably the largest company in the country that does what it does.
Lichter, 63, started the company when he was 25 years old. Born and raised in New York, he worked as a real estate appraiser and lender before leaving the career to start his own business. IRG is based in Los Angeles.
IRG is a privately held investment firm specializing in the acquisition, management, development and adaptive reuse of commercial real estate across the country. The company boasts more than 100 properties totaling more than 50 million square feet of facilities in 25 states, according to a corporate overview provided by IRG.
IRG manages all aspects of the real estate process, from acquisition through asset management and disposition. Services include property management, leasing and marketing, financing and fundraising and investor relations.
Most of the projects take a piece of real estate that is no longer required by its current users and rehab and renovate it to meet market requirements. Certain projects also involve lease-back transactions with major corporations, where IRG reduces operating costs at the property so that the tenant can remain in their facility. IRG gas completed these types of transactions with major corporations such as Goodyear & NYSE and Lockheed Martin.
In 2007, Lichter approached his corporate and government connections at Goodyear and the State of Ohio because Goodyear was planning on shutting down its headquarters and manufacturing facility in Akron and moving operations to North Carolina. He presented a plan to purchase Goodyear's 500-acre corporate campus and institute an energy safety plan to make the company more profitable at its site, according to IRG's corporate overview. IRG worked with the state of Ohio to secure development grants. IRG bought the property for $16.18 million in 2009 and is finalizing the financing to construct Goodyear's new 550,000-square-foot world headquarter building there, the overview states.
IRG's leasing and marketing services are designed to procure new tenants, using a nation-wide network of leasing brokers, as well as its own internal leasing team.