WINSLOW — Johnny’s Selected Seeds has bought part of the Winslow building it has leased from the town since 2002, according to officials.

The sale of 81,500 square feet at 955 Benton Ave. closed Tuesday for $1.65 million, and brings the town a step closer to ridding itself of landlord duties, according to Town Manager Michael Heavener.

Officials are drafting a letter of intent to sell a connected building to its current tenant, Orion Ropeworks, for about $2.1 million, Heavener said.

The town manager said he anticipated that sale to conclude by the end of 2020, although Matt Gagnon, owner and CEO of Orion Ropeworks, said discussions are “very preliminary” right now and that coming up with the money to buy the building is “one of the primary hurdles” his company faces. The lease expires in 2022.

Johnny’s Selected Seeds is spending $1.65 million to buy part of the Benton Avenue building it formerly leased from the town of Winslow.

Johnny’s currently rents 45,900 square feet of the front building on the lot for its order fulfillment center and a small retail shop. The purchase nearly doubles the company’s footprint in the building, expanding its square footage by 44%.

Orion leases the remaining 35,600 square feet of that building as well as 112,200 square feet in the attached building, the latter of which it is considering purchasing. A walkway that currently connects the two structures will be removed after Orion purchases its share or after its lease expires.

A representative of Johnny’s said in an email Monday that “we are not able to do an interview at this time,” and a representative said in person in Winslow Tuesday that “no one is available to make a comment” about the sale. An email and a call to Johnny’s public relations department inquiring about what the company plans to use the additional space for went unreturned Wednesday and Thursday.

 

PROPERTY A BURDEN FOR THE TOWN

The Benton Avenue structure, often referred to as the town’s industrial building, is the only one Winslow currently leases to private tenants and has placed a financial burden on the town for several years. Winslow came into possession of the building after its former occupant, Crowe Rope, went bankrupt. Officials approved a Tax Increment Financing arrangement for the site when Crowe Rope moved into town in 1996. At the time, the law allowed the town to co-sign a mortgage as part of that agreement, Heavener said.

“Crowe Rope ended up going under, and so by default the town took ownership of the building including the mortgage payment,” Heavener said. “The town had to look for a tenant and fortunately found Johnny’s and Orion.”

Seed order packer Falon Morin boxes orders of seeds at Johnny’s Selected Seeds shipping warehouse in Winslow on March 6, 2018. Johnny’s has bought the building housing the fulfillment center from the town of Winslow. Morning Sentinel file photo

From 2002 to 2017, Winslow had to take over the payments for the $6 million bond included in the TIF agreement and that Crowe Rope had agreed to finance. According to previous reporting from the Morning Sentinel, Crowe Rope left Winslow $5.1 million to repay on the loan and owed the town $1 million in back taxes and debt payments when it went bankrupt.

The town made a net gain of $192,193 in 2017 and $488,071 after it paid off the building bond in 2017, according to Heavener. But he said the town does not have interest in continuing to lease the property.

“We really don’t want to be a landlord — that was not our original intention,” Heavener said. “The mortgage was paid off a few years ago, so the town has obviously benefited from the lease payments and we’ve had to maintain the building. But there is a cost to owning a building, so the town feels it’s in our best interest to get out of being a landlord and let the tenants take care of it.”

Heavener estimated Johnny’s annual property tax to be $30,756 and Orion’s to be $37,280, if it proceeds with a purchase.

Town Council Chairman Steve Russell said that while the town generates more money annually through leasing the space than it will through collecting property taxes, there are other factors that pushed officials toward selling.

“When you add up that the building is on the older side — it requires regular maintenance and capital improvements — and we have better places to spend that money — we’ve got roads to fix, fire trucks to replace — the council felt it was better to put that building in private hands and collect the property taxes,” he said.

Russell added that the lease money was “good income,” but the bills for maintenance expenses and necessary capital improvements would have caught up with the town eventually.

“If we still owned money on the bond, we might continue to lease it,” he said. “But the bond is paid off, we came out of that clean and the council felt like it was a better decision to sell the building to private (entities). … I think the council was pretty unanimous that we didn’t like being landlords.”

 

ORION’S ROLE

Gagnon, of Orion Ropeworks, said that in order to secure financing to purchase its share of the facility, the company will need to get appraisals and environmental assessments done on the ground and some of the materials in the building.

“It’s just a process,” Gagnon said. “Johnny’s started it a lot earlier than us.”

Seasonal employees fill seed orders between tall stacks of herb, flower and vegetable seeds inside Johnny’s Selected Seeds warehouse in Winslow on March 6, 2018. Johnny’s has bought the building housing the fulfillment center from the town of Winslow.

A “reasonable” real estate market and a valuable location on Benton Avenue are factors the company will consider as it decides whether or not to buy, he said.

“The local real estate market is fair. It’s not a market that is inflated at this point, and there is a good labor pool within that area,” said Gagnon, who also owns Ontario-based Canada Cordage. “(Winslow) is not a big hotbed for industry, and there’s really no need for us to consider leaving, so investing in it may be a good option.”

Orion employs 50 people at the Winslow facility, where it manufactures rope for bridge wire, big rigs, barges and marine purposes as well as rope for various other industries. The company also makes polypropylene fiber out of resin pellets in Winslow, which it then uses to make rope.

Gagnon said he and representatives of Johnny’s have not yet decided what will happen to the space it currently leases in the front building that Johnny’s just bought.

“I think we’re just going to sit down and look at space we need,” Gagnon said. “We know the owners of Johnny’s well, and we’re not concerned. Our lease is valid for another three years, so we’re technically in the driver’s seat there. We’re going to get together to figure everything out. I’m not sure how it’s going to work out, honestly.”

Aside from the Winslow space, Johnny’s has a business office and contact center in Fairfield and its research farm, where it gives tours, is in Albion, according to the company’s website.

The Benton Avenue site originally housed a warehouse for LaVerdiere Super Drug Stores. Crowe Rope added additional square-footage in the 1990s.


Only subscribers are eligible to post comments. Please subscribe or to participate in the conversation. Here’s why.

Use the form below to reset your password. When you've submitted your account email, we will send an email with a reset code.