Eastman Business Park for sale
For years, Eastman Kodak Co. has sold off bits and bites of its sprawling Eastman Business Park complex as it lured tenants into space left empty by the decline of its film empire.
Now the company is officially putting a "For Sale" sign up on the entire 1,200-acre industrial park.
The Rochester-based printing technology company said Tuesday it formally was marketing its industrial park and looking for a developer or group of developers to purchase the entire thing. The company declined to divulge an asking price.
Before now, "We never had it formally for sale," company spokesman Christopher Veronda said. "We've been exploring options. That's the difference — the level of commitment: 'Yes, we do want to sell it.' We've been more in the exploring stage. (Now) we are completely behind this being the way we should go."
Eastman Business Park could end up being a hot item, at least in industrial real estate circles. It's a mix of buildings and vacant land that is its own self-contained city — complete with its own power generation, water supply, steam and compressed air generation capacity and fire department.
When looking at business parks and former manufacturing sites that have come on the market — particularly in former auto manufacturing strongholds in the Midwest — "There are many, many, many markets across the country who have been in similar situations and would love to have the challenges you guys have in front of you," said Jason Tolliver, vice president with Washington-based commercial real estate services firm Cassidy Turley. "It's going to be a lot easier to repurpose this site.
"I don't know I've ever seen a facility this size come on the market with everything lined up for its advantage. You have great space. You have a strong workforce. And the infrastructure's there."
However, that buyer is going to face some particularly significant hurdles, said Rochester-area developer Larry Glazer. "A lot of what I call the low-hanging fruit at the park, the good buildings — my definition of being good, easy deals to do — those have all been spoken for," said Glazer, CEO of Buckingham Properties. "Building 600. 604. What's left is sophisticated, more challenging space. You have to find the right user for the space. Having said that, there's a market for this. Someone's going to come in and make a lot of money with this, but they're going to have to work for it."
Citing its already full portfolio of redevelopment work, Glazer said Buckingham wouldn't be a potential buyer.
2012 file video: Eastman Business Park tour
Eastman Business Park's for-sale process arguably began in the fall of 2008, when Kodak renamed Kodak Park to Eastman Business Park as part of an effort to market it as a potential location for outside tenants to set up shop there. At the time, it was home to roughly two dozen companies, many of them created from spun-off or sold-off Kodak operations, such as Carestream Health Inc. and Ortho-Clinical Diagnostics.
Today, more than double that number of companies operate there. And the company has been marketing individual parcels of land and buildings such as the 759,000-square-foot Hawkeye building on St. Paul Street.
While the footprint of Eastman Business Park is roughly 1,200 acres, Kodak today owns closer to 900 acres.
To sell the entire park, Veronda said, "There's a community of large developers and we'll be contacting many of them and sending them the overall basic descriptor and trying to elicit interest."
If no buyers emerge, Veronda said, "We're committed to continuing our operations in the park, maintaining the operations of the park."
However, he added, "Based on our previous explorations, we know there's some interest."
If the park gets sold, Kodak would keep its manufacturing and R&D operations there, but operate as a tenant, paying rent to the new owner, Veronda said.
Companies frequently consider selling property as a way of freeing up money for other uses. Last year, another of the Rochester region's major corporate employers, Xerox Corp., sold its downtown Xerox Square office complex to Buckingham Properties and now rents that space.
Selling Eastman Business Park "allows us to focus on what we do best," Veronda said. "That's not being an industrial and technology park developer, but pursuing our strategic technology businesses. Put our focus on that, on the business. This is a big potential opportunity, but it's a big potential opportunity for someone who is a developer, not a company that wants to focus on strategic technology businesses."
Selling the park meanwhile could be a boon to those existing tenants and the local economy, said Rochester Business Alliance President Sandy Parker. "It brings in someone whose sole focus is the development of that park and not someone doing other things," she said. "Kodak as a landlord has many things on its plate."
Glazer said that while Eastman Business Park is unquestionably a lucrative opportunity for a developer, "It's also a challenge."
"You have this power plant, this infrastructure that's very hard to duplicate," Glazer said. "If you can find and match the users with the property, then you have something to offer on a competitive basis. But you're trying to find needles in haystacks here. Those users, who need massive amounts of water or chilled water or steam for certain processes, they're hard to find."
And despite the U.S. Environmental Protection Agency last month signing off on a deal creating an independent trust to fund and oversee ongoing environmental cleanup at the park, environmental cleanup concerns will likely remain a hangup for some potential buyers, Glazer said. "There are certain people who don't want to be in projects like this regardless of the warranties and guarantees in place."
The creation of that clean-up trust fund was a big reason why the park now is for sale, Parker said. "Before Kodak had any ability to put this park up for sale, the environmental issues had to be put to bed. Nobody would've touched that park beforehand."
Overseeing a successful sale would perhaps be one of the first major accomplishments of new CEO Jeffrey Clarke, who took over the wheel of Kodak earlier this month.
Veronda said that while the move to put the business park up for sale was in motion before Clarke, he "affirmed moving along in this direction. His imprint as CEO is definitely on everything."
The sale would not include Kodak's headquarters at 343 State St., roughly 2.5 miles south of Eastman Business Park. When asked if Kodak would pursue any kind of similar sale of the iconic tower complex, Veronda said, "We have to look at any options and opportunities, but there are no current plans."
MDANEMAN@DemocratandChronicle.com