Adena plans second $13 million spec building near Mansfield Lahm Airport

MANSFIELD — Adena Corp. CEO Randy Payne is bullish on the future of Mansfield and Richland County.

“I am a firm believer that we need to keep pushing forward with what we are doing to keep the momentum going. We need to have new stuff available,” he said Thursday.

Payne made it clear he and his company plan to help with that new stuff.

Payne’s comments came during a meeting with Richland County commissioners, who approved his application for a state low-interest, loan program that will assist in the construction of a new $13 million spec building near Mansfield Lahm Regional Airport.

The new 160,000-square foot building will be constructed immediately north of the $9 million building Adena finished building in 2022, which was leased to Hedstrom Ball, Bounce and Sport in December.

He was joined at the meeting by Ellen Heinz, president and CEO of the Richland Area Chamber & Economic Development and Barrett Thomas, the chamber’s director of economic development.

Thomas said it’s the first time an entity in Richland County has applied for the state’s Rural Industrial Park Loan Program.

The program is an Ohio Department of Development effort that could loan Adena between $500,000 and $2.5 million at a lower interest rate than otherwise available commercially.

“We don’t have this conversation very often because we don’t have this kind of partnership with somebody who can do a building of this size very often,” Thomas said.

“But Randy came to us and said, ‘Hey, we’ve got the land, we’ve got this site plan, we’re ready to go, but it’s on hold because the project doesn’t pencil.’

“So we found out the RIPL program fits what we’re trying to do here. We said here’s a great opportunity. And so that’s why this is moving forward when it wouldn’t otherwise,” Thomas said.

Payne said he would not plan a new spec building without the program due to current high interest rates.

“We would not do it without this. If we do not get this part of the thing financed (through the state load), it’s not viable to do it.

“Lease rates are not keeping up with the cost of construction and the interest. So it would sit until either interest rates came down or lease rates went up,” Payne said.

He said interest rates he paid from his initial spec building are now nearly double.

“This program just simply provides access to partial funds for the project. They’ll allow it to be feasible at the rate that it’s at,” Payne said.

“We looked into the (state loan) program (with) Barrett. I think this checks all the boxes here. We’re willing as a developer to move forward to provide the (building) inventory in a speculative manner to help with the attraction for companies here,” Payne said.

“If we were still sitting (on the first spec building), we wouldn’t be creating more,” he said. “But in the market, you have to have stuff available.

“People move fairly quick, and if it’s not (ready), it’s 18 months until you can have stuff permitted, in place and built. We all know what can happen to an economy in 18 months,” Payne said.

Thomas said the three key factors in recruiting businesses to town are speed, risk and money. He said having a building in place helps to eliminate many of the speed and risk issues.

“It’s a huge deal for us,” Thomas said.

Payne said if the loan is approved, likely by mid June, Adena would be prepared to start construction in the fall and complete the new spec building by the fall of 2025. He said his initial plan is to again lease the building, but would also be open to selling it to a prospective company.

“We’re designing this, so it’s on approximately the same amount of acreage (as the first), but this can be a 300,000-square foot building. So we’re building in half of what we can be in that footprint.

“So if you have got a really large company that wanted to come in during the process and we’ve got something in motion and they say they need 300,000 square feet, which would be great, we can adapt on the fly there and provide a 300,000-square foot building,” he said.

Payne controls about 50 more acres at the site and plans for now are to use about 15 of those for the new building.

Richland County administrator Andrew Keller said the state loan program is competitive, with funding available to many areas of the state.

“Most of the state is eligible, not all, but the majority of the state is eligible for RIPL dollars. And so Randy and Barrett, bringing these dollars into Richland County is a win for the county,” Keller said.

Thomas agreed and said it could be the first of additional RIPL efforts in the future.

“It helps to build that capacity so we can go back to the RIPL program again for another eligible project. Having this institutional knowledge of how to be successful with that application makes big difference,” he said.

Payne said Adena has another million square feet it could develop around that site.

“We’ve got a runway of projects we just want to continue to keep going. Obviously as a developer, you can’t sit on empty buildings and inventory, so you can’t build them all at once.

“So we’ve tried, done our homework, tried to build the size that that fits, that Barrett sees coming through that we can subdivide if there’s three, 50,000-square foot users there.

“So there’s some risk versus how long we sit on it. I mean we could build this thing and it could sit for five years. We’d have to pay the RIPL note back. We’re certainly at risk with it,” Payne said.

He said there is momentum on the north side with the broadband internet along U.S. 30 underway and the city’s planned study for improvements on Ohio 13 between U.S. 30 and the airport.

“That Route 13 study is big for this type of project for truck traffic. When we get potential people that come in, they want to know how far it is to (Interstate) 71. How quick can they get out of there? Things like that are important.

“The focus that’s going on out there is everybody’s helping each other out with what’s happening,” he said.

He said the second spec building would look largely like the first. He said Hedstrom is using the entire building and company officials are pleased with the site.

“They looked all over to try to try to find something to relocate to and it was because this one was available. They looked at buildings they looked at other stuff. But the reason they came here is because the facility was available and then they’re happy with it,” Payne said.

Payne joined Adena in 1988 and became president 13 years later. Six years after that, he became the sole owner. He said providing ready-made space can be essential in recruiting companies into the area.

“Obviously, we’re in construction. We’ve been around. I’ve been in probably every warehouse building in Richland County. People are wanting space and the roof leaks or the floor is cracked … there is just nothing there to come (to). So we need to do something to get out of that thing.

“It’s not necessarily ‘build it and they will come.’ There’s a lot of other factors with labor, tax abatements are huge for when people come to look (for a space),” Payne said.

In enticing Hedstrom to the initial spec building, the Ohio Tax Credit Authority approved a 1.3 percent, seven-year tax credit for the company, which pledged to create $2.4 million in new, annual payroll in Mansfield with the addition of 35 new employees.

“We’re trying to do our part. We’re located here. We’re committed to here and we just want to make a difference. That’s what we bring to the table. We can’t change the labor force. We can’t enact tax abatements,” Payne said.

“But we can do our part to hopefully help other people do their part.”