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Steel Dynamics seeks part of former Olin site: Metal recycling operation would serve expanding Hendricks County mill

March 27, 2006

The site of the former Olin Brass factory on the near-west side might soon roar to life again if a plan to erect a metal recycling operation there comes through.

A joint venture between Fort Waynebased Steel Dynamics Inc., Chicagobased Metal Management Inc. and local hauler Ray's Trash is seeking city approval to install a metal shredder and recycling operation on about 40 acres at Holt Road and Airport Expressway.

The venture, called Metal Dynamics LLC, would accept scrap metal from individuals, factories and salvage yards via pickups, semitrailers and rail cars. The metal would be processed and shipped to Steel Dynamics' Pittsboro steel mill by truck.

The petition is pending before the city's Department of Metropolitan Development, which must approve a variance allowing a shredder on the southern half of the site. The land is already zoned I-4, the heaviest industrial classification. A hearing on the petition is scheduled for March 28.

Olin Brass occupied about 88 acres at the site until 2003, when it shuttered the plant and moved its production of copper products to Illinois. About 200 people lost their jobs.

Boston-based First Highland Management and Development Corp. purchased the property and razed Olin's massive factory, leaving only a small office building. First Highland is known locally for redeveloping industrial properties; it owns the former Maytag building at 30th Street and Shadeland Avenue on the east side, now close to full occupancy with Pratt Corp. and other tenants.

In the mid-1990s, First Highland sold several redeveloped industrial properties to Chicago-based First Industrial Realty Trust, which continues to own and manage them.

First Highland has been marketing the Olin property for sale or lease as a whole or in parts, several industrial brokers said. Representatives of First Highland declined to comment on plans for the entire site, and officials at Steel Dynamics didn't return calls seeking comment.

Metal Dynamics might be negotiating to buy the entire Olin site. In plans filed with the city, the partnership mentioned the possibility of including a warehousing and processing center in addition to the recycling operation. Sources said that would likely go on the northern half of the site if the land purchase is successful. Such an addition likely wouldn't require zoning approval.

Metal mania

Last fall, Steel Dynamics announced an expansion of its Pittsboro mill, which it bought in 2002 and opened two years later. The mill originally was built for startup Qualitech Steel Corp., which went bankrupt before the mill became fully operational.

The Fort Wayne company has been in expansion mode for years, becoming one of the leading mini-mills, or scrap metal processors, in the country. It was founded in the early 1990s by CEO Keith Busse, a former executive at North Carolina-based Nucor Corp.

In 2004, its first year of operation under Steel Dynamics, the Pittsboro mill produced 315,000 tons of steel bars and squares used for industrial and automotive applications, the company said. In 2005, it expected to ship 400,000 tons. The plant employs 300 people.

The $18 million expansion announced in November added processing operations to the mill, including turning, polishing and cutting capabilities. It is expected to employ an additional 55 people when fully operational this spring. Steel Dynamics received more than $1 million in tax and training credits from the Indiana Economic Development Corp. for the expansion.

Adding the metal recycling operation on Holt Road would spread the wealth of Steel Dynamics' success into Marion County and add much-needed tax revenue and jobs in Wayne Township, which has been hit hard in recent years with factory closings by Olin and DaimlerChrysler Corp., said Jeff Gearhart, executive director of West Indianapolis Development Corp.

Although noisy metal shredders typically inspire passionate "not in my back yard" campaigns, the site of the proposed Metal Dynamics operation alleviated most neighbors' concerns, he said. Largescale shredders, which can convert entire automobiles to multiple 8-inch-by-8-inch steel squares in a matter of seconds, can be several stories tall.

"Shredders are never a good operation for a neighborhood, but they are necessary," Gearhart said. "And this one is next to land that is never going to be used for residential [development]."

The Olin site lies near locally based Reilly Industries Inc.'s plant and the Indiana National Guard Armory.

It's also adjacent to Airport Expressway and a rail line, meaning materials will enter and exit the area quickly. Perhaps most important, Gearhart said, the shredder will be enclosed, minimizing dust and noise.

"We hope this is the new standard" for other shredders in the city, Gearhart said.

Industrial revival

Neighborhood and city officials are encouraged by the redevelopment efforts on the Olin Brass site. Faced with the loss of hundreds of jobs and the prospect of acres full of rusting equipment, they hope other sites, such as the recently shuttered DaimlerChrysler Foundry several blocks north of the Olin site along Interstate 70, are also quickly redeveloped.

Interest from users and developers in such properties is high, industrial brokers said. Marion County lacks large tracts of land available for industrial development. Even more rare are sites that carry the heavy-industrial I-4 zoning.

"The first driver is zoning," said Pat Lindley, principal at the local office of St. Louis-based Colliers Turley Martin Tucker. "The second is rail access, and the

third is the size of the site. In Marion County, you can't find property with those three components."

Environmental contamination is always an issue with old industrial sites, but once those are alleviated, heavy-industrial properties generally go quickly, said John Demaree, a principal at locally based Summit Realty Group.

Remediation might be the key to moving the DaimlerChrysler complex. The automaker is in the process of demolishing the foundry and cleaning up the site. It began marketing the 52 acres last year as the foundry was closing, but pulled it from the market pending the completion of cleanup later this year, said Michael Cook, a local vice president for Chicagobased Equis Corp., which handles real estate matters for DaimlerChrysler.

"We figured it probably has a higher value this year than last year," Cook said, adding that several developers expressed interest in the property during the time it was listed.
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