Protomet Corporation has purchased about 20 acres of former federal land on Bethel Valley Road in south Oak Ridge, and the company is evaluating that property as one option as it plans for a $30 million expansion that could add 200 jobs over a five-year period.
On Tuesday, Protomet founder and Chief Executive Officer Jeff Bohanan said the company prefers to stay in Oak Ridge, but there is no guarantee. The 19.47-acre parcel on Bethel Valley Road will have to be cut and filled, and drainage will have to be redirected, Bohanan said. It’s not clear yet how much that work might cost.
Protomet needs about 100,000 square feet for its expansion, which was announced in February. Protomet now has 70 workers in a 40,000-square-foot building on eight acres, so the company could more than triple in size.
“The new facility will dramatically increase Protomet’s capacity and capabilities for the customers it serves,” Bohanan said. “We have already started purchasing equipment for the new facility, and some of it is already in use at our current facility.”
Protomet bought the Bethel Valley Road land from the Oak Ridge Industrial Development Board for $103,000 on October 20. The property, which was previously owned by the U.S. Department of Energy, is west of Protomet and east of Oak Ridge National Laboratory.
“This is a big step in our ability to evaluate this site as an option,” Bohanan said.
Topography can be challenging, and there isn’t much flat land available in Tennessee, Bohanan said. The Bethel Valley Industrial Park is tucked between a ridge and Bethel Valley Road, although it’s not clear how much sloping property might have to be leveled for the Protomet expansion.
Protomet is also considering other options that involve existing facilities in South Carolina and south toward Chattanooga. There are three-plus sites, with three leading options, Bohanan said. There is an existing facility for sale in Tennessee that would meet the company’s needs, according to a company press release.
Bohanan has previously said it could be most cost-effective to stay at the current site. The company wouldn’t have to move its existing equipment. And Protomet has had a very successful relationship with the City of Oak Ridge, Bohanan said.
On Tuesday, he said there are three reasons that acquiring the former DOE property in Oak Ridge was important.
First, the company wasn’t sure it could acquire the land because there were no recent transfers in the area. Also, transferring federal land can be a long, bureaucratic process. In this case, there were reportedly 17 signatures required between Oak Ridge and Washington, D.C.
But Bohanan said Protomet had a lot of support from local, state, and federal officials. The staff of U.S. Senator Bob Corker has visited and so have U.S. Representative Chuck Fleischmann and Tennessee Economic and Community Development Commissioner Randy Boyd. Protomet has also had strong support from David Wilson of the Oak Ridge Industrial Development Board and Parker Hardy of the Oak Ridge Chamber of Commerce, said Bohanan, a former employee at the Y-12 National Security Complex.
“They know what we’re trying to do, and they are trying to help us make that happen,” Bohanan said. “Because of our location, that isn’t always as fast or as easy as it sounds.”
Hardy said DOE used the federal General Services Administration to complete the land sale in six months. Earlier this year, the IDB was told the land transfer could take a year or more. Hardy said the Chamber of Commerce and IDB, which served as a conduit on the land sale, “pulled out all the stops.”
“This is a company that started here,” Hardy said. “We want to see them stay here. It’s very important.”
But Bohanan and Protomet have to do their due diligence, Hardy said.
Still, the land sale eliminated the first big roadblock to keeping the company in Oak Ridge.
“We’re optimistic that that expansion will happen here, and we’ll do what we need to do,” Hardy said.
The second reason the Oak Ridge land acquisition is important, Bohanan said, is because the company can now put a timeline on the option of staying. If Protomet stays in Oak Ridge, it would break ground in the first half of next year on what would be a 12-month expansion project. The company would occupy the expanded facility, wherever it’s located, in 2018.
Finally, the land acquisition now allows Protomet to draft a budget to develop the Oak Ridge property. When the parcel was owned by DOE, Protomet couldn’t evaluate it. Bohanan said civil engineers and architects at the site can now develop a budget and site plan.
“Until we got this land, we didn’t really know if this would be an option,” Bohanan said.
Protomet is an engineering and manufacturing company that has served customers in the marine and boating, automotive, homeland security, energy, and power industries, including companies such as Mercedes-Benz and Boeing.
Recently, it’s had growth in the marine industry. During a February tour, some employees on the factory floor were making guard rails and arm rests for boats. Protomet has a proprietary line of products marketed under the award-winning PTM Edge Watersports brand that makes and markets boat mirrors and wakeboard tower components for boats.
Protomet started in 1997, and it more than doubled the size of its Oak Ridge operations when it opened a $10 million plant expansion in 2013 that included 22,000 square feet of new space and high-tech automated manufacturing equipment from around the world. The company has been named one of Tennessee’s Fast 50 (the state’s fastest growing companies) and has experienced more than a 500 percent increase in sales since 2005.
Three years ago, Bohanan said earlier this year, Protomet committed to invest $6.25 million in an earlier expansion and add jobs.
In February, he said the company could announce it actually invested more than $10 million and exceeded the job growth numbers.
“We have exceeded our projections by more than 50 percent,” he told reporters then.
The company also added a $1.5 million aluminum finishing line. That means Protomet can take aluminum all the way from raw material to finished product, a unique capability.
The Oak Ridge City Council approved a five-year, 100 percent tax break for the last Protomet expansion in April 2013. That payment-in-lieu-of-taxes, or PILOT, agreement applied only to new investment at Protomet’s eight-acre site in the Bethel Valley Industrial Park.
Plans then called for another 21,000 square feet of space, an enlarged assembly area, and more space for machining tools. The expansion was also expected to allow the company to consolidate with 4FinalFinish, an aluminum finishing business that Protomet took over in 2008. 4FinalFinish had previously operated independently in Blount County.
In June 2013, Bohanan was already considering another expansion.
Protomet’s first expansion was in 2005. The company received a four-year, 100 percent tax abatement for its first expansion. The company continued to pay taxes and only received the abatement on incremental growth, Bohanan said Tuesday.
He said other sites that Protomet is evaluating now are offering similar tax incentives. He said Protomet has satisfied the requirements of its last tax abatement with Oak Ridge. Over three years, the company was supposed to employee 60-something people, but it has more than 80 workers now, Bohanan said.
He said state aid could be available for infrastructure in Oak Ridge, although the need would have to be articulated.
More information will be added as it becomes available.
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