Muskegon Lake’s transition

B.C. Cobb Power Plant today

Consumers Energy is in the process of divesting the 115-acre Cobb site to Forsite Development of North Carolina. The developer plans to demolish the power plant, and replace it with a deep-water marine terminal operated by Verplank Dock Co. for cross-Lake Michigan shipping — likely to the port of Milwaukee. The state of Michigan must approve the sale; it could be fall before it takes action.

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Investments coming to Muskegon County

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Speaker says Whiting site development can boost Luna Pier, region

If all goes as expected, the former J.R. Whiting Plant in Luna Pier will be demolished in two years with efforts well in progress for transforming the power plant site into a rail-to-truck terminal and distribution center.

While that plan was made public about a month ago (See Whiting acquired), local business and government officials had a chance to hear more about the concept and timeline during Monroe Bank & Trust’s Economic Update Wednesday night at the MB&T Headquarters in downtown Monroe.

“There’s certainly a lot of potential with this site,” said Tom McKittrick, president and founder of Forsite Development of Charlotte, N.C., the company that is working on redevelopment plans.

This was the 17th annual event in a speaker series that the bank launched for developers and those interested in real estate, but over time expanded into other business and industry topics.

The event includes presentations of the latest economic trends affecting southeast Michigan, specifically Monroe County, and a keynote speaker on a timely topic.

With a crowd of about 145 people, MB&T officials said the audience was one of the top three in attendance for speaker series.

Officials said the future of the site has a huge impact not just on the tax base for City of Luna Pier but also ripple effects into the region.

In addition to Mr. McKittrick, Dennis Dobbs, vice president of enterprise project management, engineering and services for Consumers Energy, which owns the power plant, also gave some remarks. The Forsite acquisition proposal is still under review by the Michigan Public Service Commission, which is expected to give its decision this fall. But the two explained what happened so far, and what may happen later.

Mr. Dobbs said Whiting had an outstanding record in performance and that the employees took pride in being good stewards of the area. But Consumers Energy concluded in 2011 that it was time to close the plant. It had run 64 years when it stopped operations in 2016.

“We didn’t take this decision lightly,” he added.

But in the meantime, the question became “What is the best use of this property?”

The related question for local government officials involves how to recover at least some of the now-lost taxes. Luna Pier Mayor Dave Davison explained the existence of the power plant helped the city incorporate in 1963 and provide municipal services such as water and sewer lines. The shutdown of the power plant resulted in a huge drop in revenue for the city.

That’s where Forsite comes in. That company’s niche is converting and repurposing former industrial sites. And while the site has cleanup challenges that include abatement of asbestos material, “they’re all manageable,” Mr. McKittrick said.

There’s also easy access to I-75 and an electric substation. More uniquely, the existing infrastructure allows for 360 rail cars to be parked. That’s how the idea of an intermodal truck and rail terminal in support of heavy manufacturing or a distribution center came about.

“We’ll do whatever we can to turn this site into something productive,” Mr. McKittrick said. But “you’ll only hear real projects from us and what we can do.”

By the numbers

The economic data that Monroe Bank & Trust provided in its packet to attendees included:

    • The average single famly home sold in Monroe County during 2016 was valued at $155,000, or approaching 2007 values.
    • The number of people employed in Michigan has been rising since 2011 and was estimated at 4.914 million in March. This is the first time that number has risen above the spring 2007 number.
    • The number of people employed in Monroe County was 77.2 thousand in March, above last year’s 75.32 thousand.
    • There were 279 new construction permits issued in Monroe County during 2016, slightly below the 285 issued in 2015. While this is the first slowdown since 2009, it is still noticeably higher than the 2008-2013 numbers.

For these and other regional statistics, go to www.mbandt.com/EconomicUpdate

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Port project at former Muskegon coal plant aims to tap into region’s ag industry

From MiBiz.com

MUSKEGON — As a result of the challenging economics of maintaining decades-old coal plants, communities nationwide have wrestled with how to replace lost tax revenue and repurpose large industrial brownfield sites when those facilities close.

For the B.C. Cobb coal plant in Muskegon, whose towering smokestack is an unmistakable feature along the east end of Muskegon Lake, Consumers Energy has selected North Carolina-based Forsite Development Inc. to capitalize on the site’s deep-water dock location.

Forsite President Tom McKittrick told MiBiz he envisions two features for the 115-acre property going forward: maintaining and consolidating aggregate delivery on the east end of the lake and developing a shipping market between Muskegon and Milwaukee “that doesn’t exist currently.”

“We think there’s a lot of potential” for a cross-lake shipping route, one that could support more agricultural food processing in the area, McKittrick said. 

“A lot of agricultural products are grown in West Michigan, and a great percentage of those are being shipped out of the state to be processed,” he said. “If Michigan companies move into those markets, a route that allows them to bypass the congestion in the Chicago market could move it more efficiently to Milwaukee markets.”

When the Cobb plant shut down in April 2016, officials voiced concerns about jeopardizing federal funding for harbor dredging if shipments through the port fell below the annual 1 million ton threshold for commercial ports. 

However, local officials involved with the B.C. Cobb project say federal lawmakers have spent the past year making that requirement more discretionary and based on a formula, and aggregate shipments to the port have since increased to replace the loss of coal.

In addition to its unique shipping port, Muskegon also drew McKittrick in with its “massive” wastewater treatment plant east of U.S. 31, which he believes can help support agricultural processing facilities.

“Food processing needs wastewater treatment — that’s a huge piece of the puzzle for site selection for food processing projects,” McKittrick said. “With that wastewater treatment capacity and a potential new transportation route to get agricultural products into Midwest markets, I think the combination of those two things has potential to attract food processing companies to Muskegon and the region.”

McKittrick, who is originally from Indiana and has spent much of his career in commercial real estate, wants to transform the Cobb site into an industrial park that is tied to the wastewater treatment plant. Any kind of vertical development has been largely off the table due to the unstable soil at the site. 

“There are opportunities specifically in the food processing arena that could be created by linking those two assets,” he said. “In my opinion, that hasn’t been done effectively yet.”

SUBJECT TO APPROVAL

In late April, Consumers announced a plan to offer Forsite $1 million to take over the property, decommission and demolish the site and remove environmental contamination.

Because Consumers is divesting electricity-generating assets in Muskegon and at the J.R. Whiting coal plant in Monroe County, the plan is subject to approval by the Michigan Public Service Commission. A preliminary hearing is scheduled for May 31 and a final decision will come within 180 days of the filing.

Consumers Energy spokesperson Roger Morgenstern is optimistic the plan will receive approval before the end of the summer. It will take roughly two years thereafter to demolish the site. Morgenstern said the roughly 60 employees at the plant have relocated to other Consumers facilities in West Olive and Ludington, or have retired.

According to MPSC filings, Consumers said it would be cheaper to leave the decommissioning and demolition to Forsite rather than perform that work itself.

The utility first announced plans to close the Cobb plant in 2011. Since then, the debate over coal plant economics has largely turned political. Republicans criticize the Obama administration for stringent air pollution regulations that are leading to widespread closures, and thus a downturn in the U.S. coal sector. However, the prevailing thinking among industry analysts and utilities holds that the decline in natural gas prices, in particular, has made coal less attractive.

“We felt that continued investment in these older coal plants is not in the best interest of our customers,” Morgenstern said. 

Along with DTE Energy, Consumers has shifted investments toward natural gas plants and infrastructure, as well as to wind and solar projects. Officials with Michigan’s two largest utilities have said publicly this transition was happening regardless of how the Trump administration aims to change U.S. energy policy.

“We are looking to cleaner, less carbon-emitting plants and not continuing to invest in some of our smaller (coal) plants,” Morgenstern said. “These plants have served us well for the past 60-70 years. It’s like an old car: You have to decide when to stop putting money into it.”

Erin Kuhn, executive director of the West Michigan Shoreline Regional Development Commission, said the B.C. Cobb redevelopment could be transformational for the city of Muskegon, as the port has been identified in numerous reports as a regionally significant economic driver. That it’s taking place at a former coal plant is all the more symbolic.

“We’re helping the community redefine the next phase of Muskegon Lake as an economic engine for that community and region,” Kuhn said.

‘ECO-INDUSTRIAL’ REDEVELOPMENT

Founded in 2004, Forsite specializes in acquiring industrial properties and returning them to use with an emphasis on environmental preservation and creating “ecological assets,” McKittrick said. Adding clean energy features to these sites is part of what the company describes as “eco-industrial” redevelopment. Forsite’s ReVenture Park project in Charlotte, N.C., for example, included extensive habitat restoration projects, a major aquaculture facility and a biomass plant.

Forsite broke into this particular type of redevelopment as “surplus real estate” in the Carolinas became available when textile furniture manufacturing moved overseas, McKittrick said. Now, the energy transition happening nationwide — a shift that relies less on coal and more on natural gas and renewable energy — is creating similar opportunities, he said.

“With all of these coal-fired plants shutting down at one time, we think there’s tremendous opportunity to go repurpose those sites and do the exact same thing,” he said. “With coal plants in general, if people look at them through a different sense, they can be turned back into assets and maybe help foster more renewable energy development because of interconnection (assets).”

McKittrick said Forsite has acquired three coal plants in North Carolina and sold two of them to a biomass developer.

Specific features for the Cobb property remain unknown at this point. Renderings provided by the company show the potential for solar energy generation, which McKittrick said would have to be owned by Consumers Energy. Wetland restoration could be another component.

While the company is not taking the coal ash storage impoundments at the site, Forsite will oversee the abatement of asbestos and other contaminants.

“There’s a multitude of environmentally sensitive projects that we can weave into one of these projects that aren’t necessarily adding a lot of cost, but are putting areas of sites to good use that are otherwise unusable,” he said. 

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Forsite Development to Acquire Two Consumers Energy Sites

JACKSON, Mich., April 25, 2017 /PRNewswire/ — Consumers Energy has selected an experienced firm to demolish and redevelop two of its former coal-fired power plants.

Citing the successful track record of Forsite Development Inc. with repurposing industrial property, Consumers Energy tapped the North Carolina company to redevelop its 115-acre B.C. Cobb Generating Plant in Muskegon and 248-acre J.R. Whiting Generating Complex in Luna Pier, near Monroe.

Today, Consumers Energy filed a request with the Michigan Public Service Commission seeking approval to have Forsite acquire the two sites. The MPSC has up to 180 days to act on the request.  It is anticipated the sites will be demolished within two years of the transaction being finalized, pending a positive outcome with the MPSC review. Terms of the transaction were not disclosed.

Consumers retired those two plants, comprised of five generating units and two other units, in April 2016.

Led by founder and President Tom McKittrick, Forsite was selected to acquire both sites on the strength of its plan to improve the properties and return them to productive use. Forsite’s initial vision for both sites includes plans to:

  • Convert the B.C. Cobb property into a deep-water marine terminal on the east end of Muskegon Lake for cross-lake shipping. Additionally, Forsite has begun working with Muskegon-area economic development officials to identify land for a sister industrial park designed to attract new industries that can take advantage of a cross-lake logistics route.
  • Develop the J.R. Whiting property into an inland intermodal terminal, offering rail-to-truck facilities utilizing the site’s extensive rail infrastructure. The site’s immediate access to I-75 and rail capabilities has potential to create spin off economic development opportunities, specifically heavy manufacturing and distribution.

“These properties powered homes and businesses for many decades, and we are pleased that they will generate new economic growth under the stewardship of Forsite,” said Dan Malone, senior vice president of energy resources for Consumers Energy. “We want to leave it better than we found it, and having Forsite, a successful redeveloper with a proven track record, acquire the sites will allow the communities of Muskegon and Luna Pier to see new life for these properties.”

Charlotte-based Forsite has already redeveloped more than 7 million square feet of facilities on 3,000+ acres over the past decade-and-a-half. Forsite’s projects have created or retained more than 1,000 jobs.

Forsite’s most prominent project was the adaptive re-use of a shuttered 667-acre dye manufacturing complex along the Catawba River in Charlotte, North Carolina, now known as ReVenture Park (www.reventurepark.com). ReVenture is now the thriving home of numerous sustainable and renewable energy companies.

For the B.C. Cobb site, McKittrick has selected Verplank Dock Co. to operate the port terminal and help develop the cross-lake deep-water shipping market.

For the J.R. Whiting site, McKittrick plans to begin marketing and pre-development activities for the intermodal terminal concurrent with demolishing the plant, which he expects will take two years.

“Both sites have the benefit of existing heavy infrastructure which we intend to repurpose in a manner to attract new industry,” said McKittrick, who founded Forsite in 2004. “We’re honored and humbled that Consumers Energy chose us to create a new use for these sites. We look forward to working with community leaders in Muskegon and Luna Pier.”

The board of directors of CMS Energy, the parent company of Consumers Energy, has approved the agreements with Forsite with the final transactions needing approval by the MPSC.

About Forsite Development
Tom McKittrick founded Charlotte-based Forsite Development, Inc. in 2004. The privately held firm has since redeveloped 7 million square feet of facilities on 3,000+ acres in North Carolina and South Carolina, and created or preserved more than 1,000 jobs. Its largest project is ReVenture Park in Charlotte, a 667-acre former brownfield Superfund site that is now home to a thriving collection of renewable energy companies and was named “Business Conservationist of the Year” for 2016 by the North Carolina Wildlife Federation.

About Consumers Energy
Consumers Energy, Michigan’s largest utility, is the principal subsidiary of CMS Energy (CMS), providing natural gas and electricity to 6.7 million of the state’s 10 million residents in all 68 Lower Peninsula counties.

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