Former KBI site bought for $52M

PERKINS TWP. — A company recently finalized the multimillion-dollar sale of a notable former factory site. The company, listed as Aligned Data Centers (NEO), invested $52 million to acquire a prominent industrial site at Hayes (Ohio 4) and West Perkins avenues near Sandusky High School, according to Erie County auditor records. Records list the seller as "JCA Hayes LLC & DS Hayes LLC." Not much more information — including the company's background, its intentions for this land, a project timeline or additional financial pieces — has been released to the public. Furthermore, little information is known about Aligned Data Centers, including its offering, services and interest in this Sandusky site. Perkins Township officials, however, did put out a statement shortly after the auditor's office recorded this sale on Aug. 1. The township "believes that this assistance and the removal of the existing structures on this property, which is ongoing, served as a catalyst for this transfer," the statement read. "The township supports the redevelopment of this property and its return to productive use," it continued. "Our township looks forward to working with the new ownership of this property and the future opportunities that will be created at this site in connection with the redevelopment." Dismantling history Carnage from one of the area's most historic industrial facilities can be seen by passersby. The 129-acre property at 2509 Hayes Ave. (Ohio 4) — which is remembered by names like Delphi, KBI, New Departure or New Departure-Hyatt — employed thousands of local manufacturing workers dating back to the 1940s. Totaling 1.3 million square feet, this area is being razed in hopes to make the property "shovel-ready" for redevelopment by the end of 2023, according to Nico Samaniego, the Erie County Economic Development Corp.'s business development coordinator. "To best position this site for future development, the building owners felt that demolition was the best way to make it an attractive site," Samaniego said. The property was bought in 2008 by a company known as 2509 Hayes LLC. It's been abandoned, however, since 2017. The Register asked the Ohio EPA about possible environmental contamination at the site that might have accrued over the manufacturer's seven decades in operation. The company, 2509 Hayes, chose to take its property through the state's voluntary action program, according to Dina Pierce, an Ohio EPA spokeswoman. The program is a route in which individuals are: • Permitted to privately investigate environmental contamination • Clean up what is necessary • File a report with the Ohio EPA • Enter an agreement with the agency stipulating if any additional action is necessary If companies adhere to the agreement's terms, then they "receive a promise from the state of Ohio that no more cleanup is needed," according to the state agency. When the cleanup requirements are met, then the EPA issues a covenant not to sue for future investigations and cleanup. An environmental assessment and remediation processes continue to march forward, according to Pierce. This comes as the demolition is also well underway. The next step of the program is to investigate whether or not any oil or other hazardous substances have contaminated the property. Executives overseeing 2509 Hayes previously submitted an assessment for review and have received comments back from the EPA, Pierce stated, adding that the process remains ongoing. Earlier this summer, the Ohio EPA also learned of four notifications for asbestos abatement. Pierce said the Ohio EPA inspected the property and confirmed 2509 Hayes is meeting the state's asbestos regulation requirements. Even if no issues arose from such an assessment, this site presents other problems. "Ultimately, the 1940s-era structure has proved difficult to work around for modern manufacturers and other users," according to a state-issued statement. "Most national site selection searches require newer facilities and fast timelines. By clearing the site, we believe we are maximizing the potential for new development." Making sense of the dollars and cents Last year, the company secured $6 million in brownfield remediation funds from the state. Funds cover the costs of cleaning up properties potentially contaminated by industrial operations. But "$6 million is only a portion of the costs associated with it. So I know that the building owners themselves are having to invest quite a bit of money," Samaniego said. It's not yet clear what the total cost of the demolition will be. "Our goals are to be as transparent as possible about the process and make sure that the community knows that we're working hard to make sure that this becomes the economic driver it formerly was," Samaniego said. History lesson Across generations, the prominent property — whether known as Delphi, KBI or New Departure — employed thousands of locals. Though, since 2017, one of Erie County's largest employers from generations past has remained eerily empty. In spring 2016, Kyklos Bearing International, or KBI, announced it would cease operations on Dec. 31 of that year, sending about 300 people into the job market. The bearings plant at Perkins and Hayes avenues is rooted in the very start of the U.S. automotive industry. KBI opened as New Departure Bearings, a name that dates back to 1888. New Departure Bell was founded by brothers Albert and Edward Rockwell of Bristol, Connecticut. They formed the company to manufacture a new type of electric doorbell they'd invented. In 1900, the company received a trial order for 120 bearings from the Old Motor Works, the largest automotive manufacturer of the time. But it was more than six decades before New Departure moved to Sandusky, and war factored into the decision. During World War II, New Departure manufactured bearings for the war effort. "Why Sandusky was chosen as the spot for this development is an interesting story in itself. It is sufficient to say that the natural advantages of the city, its shoreline location, its ample supply of water, its east-west transportation facilities and other factors were the determining considerations," an article in the Register Star Journal dated Jan. 30, 1945, states. In addition, the new location in Sandusky lessened vulnerability to enemy attacks. The new bearings plant would be safer in Ohio, a harder target for enemy aircraft to reach, than the plants on the East Coast. New Departure in Sandusky opened June 14, 1947, covering 14 acres under a single roof. That same year, the United Auto Workers organized hourly employees, and the first union contract was negotiated and became effective in August 1948. After the war, the plant continued to operate and fully focused on making parts for automobiles, and it prospered considering: • In 1965, General Motors combined New Departure with Hyatt Roller Bearing division to form New Departure Hyatt Bearing Division in Sandusky. The company also brought 450 new families to Sandusky beginning in 1965 as workers transferred from plants in New Jersey and Connecticut. • In 1973, New Departure employed 2,839 people. • In 1974, the plant directly contributed $64 million into the local economy via payroll and local purchases, according to local newspaper articles. • In 1975, stable employment continued with 2,900 people working at the plant. • From the mid-1970s into the 1980s, considered the golden era of this operation, the plant employed about 5,000 people. It was considered the area's largest employer. It happened again in 1989 when New Departure started a process of transferring 112 employees from Bristol to Sandusky when the factory consolidated a spindle-bearing operation. "Some of the workers called Sandusky 'the frontier' because of its lack of shopping and other amenities. They thought it was treeless, wind-swept, flat," one New Departure executive told the Register at the time. The end of bearings manufacturing in Sandusky almost happened in 1986, when New Departure-Hyatt made the decision to leave the commercial ball bearings business, the industry it virtually invented in the 1900s, according to reports published at the time. GM merged Delco Moraine and New Departure-Hyatt into Delco Moraine. The restructuring and changes to survive continued when, in 1995, GM named the division Delphi Automotive. Delphi declared bankruptcy and was purchased by KBI, a subsidiary of HHI Group Holdings Inc. in 2008. Many locals expressed the feeling that the beginning of the end occurred with a judge's 2008 order in the Delphi bankruptcy proceeding. The judge required General Motors to subsidize KBI payroll until 2015. The subsidy meant KBI could not actively seek other contracts for years. Employees and union representatives have said KBI could not be competitive with overseas manufacturers they accused of "dumping" bearings into the U.S. market.