Buyer of mill site revealed
The corporation that has taken on the task of converting the former site of the Newberg paper mill to developable land was revealed to the public last week: Commercial Development Company Inc.
The St. Louis, Missouri-based company announced it had purchased for an undisclosed amount the 200-plus acre former mill site and adjoining land from WestRock, the Georgia-based papermaking giant that bought and then shuttered the facility in 2015.
The purchase includes 120 acres of industrial land, 4 acres of multi-family residential land and 1.5 acres of commercial land located within state-designated opportunity and enterprise zones primarily south of the city limits. The site includes a large tract of undeveloped land on Wynooski Street adjacent to the Cal-Portland concrete plant, a portion of Rogers Landing marine park and two tracts of residential land on either side of the Newberg-Dundee bypass.
CDC officials said in a press release on Sept. 29 that as part of the purchase it has released WestRock from responsibility for the environmental liabilities through its subsidiary, Environmental Liability Transfer. Since the 1880s, the land has held a series of lumber and newsprint mills and is likely to require extensive environmental cleanup.
"We are excited to expand our redevelopment efforts into the greater Portland area," said Adam Kovacs, CDC vice president. "Our acquisition of this retired plant is the first step in repurposing the property and moving it back into productive use — the site has phenomenal development potential and we are eager to see the economic benefits this transaction brings to the region."
Kovacs added that the company will be meeting with local economic leaders to find potential buyers "who could benefit from the large amount of land available and a prime location," as well as proximity to the I-5 corridor, rail access, "significant" water rights and access to considerable electrical power.
Initial plans for the site including removing waste, selling off equipment and demolishing most of the buildings on the site. The company, the release said, expects the site to be ready for redevelopment by late 2021.
"CDC will prepare the site for a variety of end uses, including lot sales, build-to-suit and for lease properties," said John Kowalik, vice president of marketing at CDC. "We are still very early in the planning process, but we reposition the property for its highest and best use."
Although likely privy to negotiations between CDC and WestRock, city officials were nonetheless exuberant upon learning of the sale last week.
"I am thrilled that such an experienced and proven corporate partner has seen the vast potential in the Newberg mill property," said Newberg Mayor Rick Rogers. "The site has been unproductive for far too long and we all look forward to the coming transformation. For Newberg, the redevelopment will result in expanded resources [and] economic and employment opportunities for residents and visitors alike."
The city is in the midst of instituting its riverfront master plan, which calls for development of land adjacent to the mill site into commercial, recreational and residential uses over the next several decades. The plan calls for developing a thin tract of land along the bluff that sits between the Newberg-Dundee bypass and the Willamette River into a commercial, residential and recreational zone that abuts the mill property on the east. If the plan — recently adopted by the city after years on the drawing board — wished to include the mill site, then the land would have to rezoned by the county as it is designated for industrial use.
"Yamhill County and the city of Newberg have so much to gain from the sale of the defunct mill site," Yamhill County Commissioner Casey Kulla said. "We stand to have a legacy site cleaned up; we stand to gain excellent jobs in the community. With our county's strong manufacturing base and this large-scale industrial site, I anticipate that we will attract additional successful businesses to the site and build our community's resilience. I am so excited."
The principal broker of the acquisition between WestRock and CDC, Philip Higgins of Newberg-based Pacific Crest Real Estate Advisors, opined that redevelopment of the mill site will be a boon for the local economy.
"This site represents a tremendous opportunity for not only Newberg and Yamhill County, but the surrounding region to create jobs now and well into the future," he said. "Large format, 100-plus-acre industrial sites are a rarity in our land-constrained market and this brownfield redevelopment will be a meaningful win for our local and regional economy."
Not its first rodeo
The CDC bills itself as a privately-held company that has acquired and developed "underutilized, distressed or environmentally challenge properties" at more than 300 sites in the United States and Canada since 1990. The company specializes in reclaiming industrial parks, corporate campuses, quarries, landfills, retail centers and environmentally-impacted buildings and land, primarily in the Midwest and on the East Coast. The closest example of the company's work is in Mead, Washington, a suburb of Spokane, where CDC purchased a 1.8 million-square-foot former aluminum smelter on 192 acres from Kaiser Aluminum. Cleanup of the site required removal of cyanide and asbestos.
Much like the plans for the former WestRock mill, the CDC sold the surplus machinery and equipment in Washington, addressed the environmental issues and demolished the smelting line of the factory, where more than 2,000 pots had produced aluminum since World War II.
Idle for many years
The Newberg mill has been closed since fall 2015 after Atlanta-based WestRock purchased it in a deal that included a second mill. The company initially said it would make improvements to the facility to make it more viable, but then suddenly shuttered it, first laying off its more than 200 workers then firing them outright a few months later.
The mill was listed with Colliers International soon after its closure. The company sought an $8.25 million contract with the caveat that the paper-making machinery inside be destroyed.
The company received at least three sales offers for the facility, including from an Idaho company that wanted to demolish the mill for the scrap metal but later withdrew its offer. Two other paper companies made unsuccessful offers to purchase the plant for undisclosed prices as well.
WestRock took the mill off the market for a short time before relisting it in May 2018 after, company officials said, there was renewed interest in its purchase.
WestRock Senior Vice President and Treasurer John Stakel said then that the company came to believe selling the mill for a possible mixed-use development would provide the best value for WestRock and the city.
"(We) believe there is a great opportunity for a buyer to completely redevelop the property in line with the city's proposed riverfront master plan and for the long-term benefit of local residents," Stakel said.
The move came about after the city had convened a subcommittee to consider asking WestRock to donate a portion of the tract to the city.
"We would not rule out any options at this point, but we are very early in the planning process," Kowalik said.
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