Longmont ponders Butterball site

LONGMONT – Butterball LLC, the owners of the recently closed turkey processing plant in downtown Longmont, will give the city “the right of first refusal” if it wants to purchase the 26.8-acre facility, a top executive said.

Butterball plans to work with Longmont to determine the future of the seven lots it owns near the corner of First Avenue and Main Street, Butterball chief operating officer Joe Nalley said.

“In my opinion, they have the right of first refusal,” Nalley said.

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The city government is keenly interested in what becomes of the properties, which are at the southern entrance to downtown. The city and Regional Transportation District are in the planning stages of building a transit facility about a half-block away from the site on First Avenue, setting the stage for a major transit-oriented development.

“Something like this is a generational opportunity,´ said Brad Power, Longmont’s director of economic development. “It represents a pretty large opportunity to do something that would augment the vitality of downtown.”

But while the city is considering ideas, Butterball, as the property owner, is in the driver’s seat at this stage of the process, Power said.

Butterball, as expected, will look to sell the facility.

“We have no reason to hang on to the plant,” Nalley said.

Although Butterball announced it was closing the plant Sept. 14, the search for a buyer just started in early January, Nalley said. The company’s efforts since the announcement had been focused on winding down operations in Longmont, transferring activities to other facilities and bringing in career counselors and job fairs to help the 350 employees transition to new jobs.

A few employees remain to wrap up loose ends and remove some equipment, but otherwise the buildings are vacant, Nalley said.

Butterball in the second week of January started hosting tours of the plant for companies and local real estate professionals that might have an interest in purchasing the plant, but it has yet to hire a commercial broker to handle sales inquiries and marketing, Nalley said.

Plans are in such a preliminary state that Butterball does not even have a price target for which it would like to sell the plant. Feedback from the tours will help Butterball generate a market assessment and sort out how serious interest is.

“You never known how serious any of it is until they get a chance to take a look and come back to us and give us their thoughts,” Nalley said.

Butterball expects to go over potential options with the city by mid-February, Nalley said.

Butterball has not given up hope that the buyer will want to use the plant for food processing.

The food processing industry is always in flux, as companies are highly vulnerable to fluctuations in the prices of commodities like fuel and feedstock, Nalley said. He doesn’t know whether there’s a company interested in adding a plant, but Butterball will leave some equipment behind if that would help the new operators.

Butterball likely would get its best offer from a company in the industry, Nalley said.

“That’s probably where the facility would have the most value, because that’s what it’s set up to do,” he said.

Longmont Foods built the core of the plant on a 6.46 acre lot at 150 Main St. in 1950. The lot now has about 272,000 square feet of manufacturing and storage space. Additional storage and manufacturing facilities and parking lots were added to lots around the original plant over the next few decades.

While the plant is not up-to-date – for example, modern poultry plants are built on a single level in a single building, not spread over multiple floors in several buildings – the plant is not obsolete. Its fatal flaw was its location. Butterball’s other facilities are in Missouri and the Southeast, and the company had to ship turkey halfway across the country for it to be processed, Nalley said.

“It’s not like it was a bad plant,” he said.

The city has ways to help the new owners if the right plan comes along. Because a portion of the plant is in an urban renewal district, tax-increment financing might be available for the new owners, Power said.

Plans for the transit facility will be flexible enough to incorporate a range of possibilities, Power said.

RTD’s plan is to build a transit hub that would be the terminus of the Northwest Rail Line and also serve the U.S. 36 Bus Rapid Transit line. Plans for the rail station are in jeopardy after RTD told local mayors FasTracks might run out of money before it can build the rail line.

RTD has allocated $17 million for the bus facility and a park-n-Ride on First Avenue. City planners are hosting an open house from 6 to 8 p.m., Wednesday, Jan. 25, at the Longmont Public Library to discuss plans.

No matter what happens, Longmont is breaking new ground. As parts of Longmont reach the city’s growth boundaries, the government is paying more attention the possibilities for redeveloping old parts of downtown.

“I think this would be by far the largest redevelopment we’ve had,” Power said.

Whether environmental remediation will be required is unknown, Power said. The project also would require considerable demolition work.

Longmont has a precedent for turning around major commercial buildings that became vacant “white elephants,´ said John Cody, president and chief executive of the Longmont Area Economic Council.

Storage Technology Corp. owned a 553,000-square foot plant that sat on 153 acres. The plant was vacant for years until Intrado Inc. and Digital Globe Inc. moved in, Cody said.a