Whirlpool says plant has ‘suitors’

Closed Fort Smith site’s pollution called manageable

The Whirlpool Corp. building in Fort Smith, seen here soon after it closed in June, is attracting interest from buyers.
The Whirlpool Corp. building in Fort Smith, seen here soon after it closed in June, is attracting interest from buyers.

FORT SMITH - The vacant Whirlpool Corp. property in Fort Smith - one of the largest industrial sites for sale in America - is attracting interest from would-be buyers despite disclosures in recent weeks of groundwater contamination, a company spokesman said late Wednesday.

“We have a couple of fairly serious suitors,” Whirlpool spokesman Jeffrey Noel said in an interview. “We’re going through due diligence to make sure they understand the facts and can produce a vision in repurposing the property to be successful.”

At 2.19 million square feet, the building where Whirlpool stopped production last June is on the market for $19.2 million, according to the Arkansas Economic Development Commission’s website of properties.

The company doesn’t expect a spill of the solvent trichloroethylene, discovered more than 20 years ago, will stop an interested buyer. The chemical is widely found at industrial sites nationwide, and investors are accustomed to dealing with the issue, he said.

Another reason the problem won’t deter a sale, Noel added, is that Whirlpool has said it is taking responsibility.

“Whirlpool has already said we’re responsible. We continue to be responsible. We’ll be responsible until it’s resolved,” Noel said. The pollution and any liability would be spelled out in a sales agreement involving the building, he said.

Helping Whirlpool market the property are the Fort Smith Regional Chamber of Commerce, the Arkansas Economic Development Commission and international commercial property brokerage firm Jones Lang LaSalle.

“I can’t tell you how often it happens, but environmental issues do occur at times with industrial properties,” said commission spokesman Joe Holmes. That’s why environmental studies “are always done on any industrial-type building as part of due diligence before sale.

“Buyers understand what will need to be dealt with, whether big or small, and who is going to deal with it.”

The state has seen success marketing big, vacant industrial buildings, Holmes said.

A former Target distribution center in Maumelle closed its 850,000-square-foot facility in April 2009 and laid off about 500 workers. Maumelle issued $42 million in bonds to buy and renovate the building for Little Rock-based Dillard’s Inc. The retailer started an Internet fulfillment center there last year employing more than 300 workers.

Whirlpool stopped production at its Fort Smith site in June and laid off more than 800 workers. Just a few weeks later, in early September, the company announced it had a buyer for the building, Infinity Asset Solutions Inc. of Concord, Ontario. The company disposes of assets for private and public companies.

But Nov. 28, Whirlpool said Infinity Asset Solutions had withdrawn its offer. The Canadian company wouldn’t discuss the transaction then and did not return calls Thursday. Noel said this week that trichloroethylene pollution wasn’t a factor in halting that sale.

It’s not uncommon to find trichloroethylene contamination associated with industries across the U.S., according to state and federal environmental protection agencies. The chemical was used in solvents to remove grease from fabricated metal parts and textiles, and in adhesives, paint removers and cleaning fluids, according to a report from the federal Environmental Protection Agency.

As of March, EPA data showed that trichloroethylenehad been detected at 776 of 1,730 sites on its National Priorities List of places that warrant further investigation. Exposure to the chemical can cause cancer as well as kidney, liver and neurological problems, according to the EPA.

Noel and two other Whirlpool representatives were in Fort Smith Tuesday through Thursday to talk with property owners one-on-one about the pollution.

The appliance manufacturer has said it discovered the trichloroethylene spill in 1989 when workers removed an underground storage tank. In 2001, the company notified the state that pollution had spread into the neighborhood north of the factory, and officials say they issued a news release that year.

Neighborhood residents say they didn’t learn about the problem until early this year, when Whirlpool asked Fort Smith to ban groundwater well drilling on the factory property and in the affected neighborhood of about 35 homes.

The company said it wanted to eliminate the chance of human exposure to trichloroethylene. City directors rejected the proposed ordinance on March 27. On April 8, Whirlpool submitted a risk management plan to the state promising to monitor the decomposition of the chemical and establish controls to restrict access to the contaminated groundwater. The vacant factory and nearby homeowners all are served by city water.

Whirlpool has sold or repurposed other manufacturing facilities it has owned in the U.S., Noel said, and expects to sell its Fort Smith property.

“The reality is that it’s an extremely large building. The type of manufacturing and business that exists today is very different than 20 or 30 years ago,” Noel said. “We don’t have as many large users who need that much space.”

But the property sits on 127 prime industrial acres, he said. “The right investor can reconfigure, and might include selective demolition. … There’s a number of ways to look at taking full advantage of the property. I have every belief that we will close with just such a developer.”

Business, Pages 25 on 04/19/2013

Upcoming Events