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Wednesday, July 23, 2014

Boeing Wichita plant could be tough sell for new businesses

By Molly McMillin
The Wichita Eagle

A state official said he has had inquiries about Boeing’s Wichita plant, but two site selection executives think the facility will remain vacant for some time.

Boeing announced in January that it would close its historic site in south Wichita by the end of 2013. The plant includes dozens of hangars and buildings on 400 acres of land.

Kansas Department of Commerce Secretary Pat George calls the facilities a “great asset” for Wichita.

“We’ve had a number of inquiries,” he said. “Boeing’s been fielding inquiries, too.

“Of course, it’s a long way from having a done deal. But it makes you feel good when you put a house on the market and you have a few people who show up for the open house, to use that analogy.”

He described those interested as coming from aviation-related businesses.

“They’re more than tire kickers,” he said.

Boeing spokesman Forrest Gossett said “it’s far too soon for us to begin actively marketing the properties.” He said Boeing needs the site for another year and a half.

He said the company’s shared services group, which works with site planning and real estate, will handle any inquiries about the property.

Jay Garner, president and founder of Garner Economics, an Atlanta-based economic development consulting firm, said that because the site is so specialized, it likely will be used for aircraft-related assembly or aviation maintenance and repair.

Boeing owns the property and the 97 buildings that appear on the tax rolls. Those buildings include everything from large hangars to tool sheds and guard buildings.

“It’s hard to find quality hangar space,” Garner said.

Still, the space has a limited niche market, especially in light of cuts in the federal defense budget. Those cuts will affect the demand among defense contractors for extra space.

“My guess is there’s a great chance it’s going to be empty longer than shorter because of fewer potential customers,” Garner said.

Dennis Donovan, a principal with Wadley-Donovan-Gutshaw Consulting, a site selection consulting firm, agreed.

Like Garner, he says he’d feel a better about the opportunities for it if the military budget wasn’t getting cut. There aren’t a lot of companies that need that kind of facility, he said.

“I’d plan on it sitting vacant for several years. … But you might get lucky.”

Boeing announced in January that work now done in Wichita would move to Oklahoma City and San Antonio. Tanker finishing work that was to come to Wichita will now go to the Puget Sound area in Washington. Boeing employs 2,160 people in Wichita.

What the city and state want to avoid is a huge, vacant complex that stays empty for a long time, said U.S. Sen. Jerry Moran.

Soon after Boeing announced the closure in January, government officials approached Boeing about deeding the property to the city of Wichita or another public entity in Kansas, such as Sedgwick County, so marketing could begin, he said.

“What my hope is that Boeing has a plan that involves early conveyance or leasing of that property,” Moran said. If there’s any chance Boeing might sit on the property, he said, “then let’s get control of it so we can move quickly.”

Whether that would be the best course of action has been part of the discussion, George said.

Gossett said the company is studying its options for the facility, but it’s not publicly discussing them.

“It’s a great asset for the community,” Suzie Ahlstrand, interim president and CEO of the Greater Wichita Economic Development Coalition, said of the site. “The community would love to use it for opportunities to further economic development or expansion.”

Spirit AeroSystems, directly across from Boeing, leases Boeing’s south hangar for its 787 work.

Spirit isn’t interested in the site at this time, said company spokesman Ken Evans. It’s not necessarily the right kind of space for the company.

“We don’t have a need for those facilities at the moment,” Evans said. “It’s not to say we wouldn’t consider it, but not at the moment.”

It would likely be quicker to replace the jobs that will be lost if the property turns into a mixed-use business park, said Donovan, the site selection executive.

That might not be an option, Ahlstrand said. The sprawling facilities share sewer and electrical services and it would be expensive to break up, she said.

“The clock is ticking,” Ahlstrand said. “We’d like to do something.”

Contact Molly McMillin at 316-269-6708 or mmcmillin@wichitaeagle.com.

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