Springfield officials mull over options for vacant Sony facility.

Byline: Sherri Buri McDonald The Register-Guard

SPRINGFIELD - As Sony moves out of its sprawling compact-disc factory in the Gateway area, who might move in? And when?

The property - a 365,000-square-foot facility on 34 acres - is huge by Lane County standards, and large even by national standards for vacant industrial buildings.

Amid the national economic slowdown, not many national companies are scouting for big new factories right now, so finding another user for this unique property won't be easy, real estate experts say.

"The problem is there is just not a lot of relocation activity today," said Dennis Donovan, director of global site selection for The Wadley-Donovan Group in Edison, N.J. "It probably won't pick up much until the third or fourth quarter of this year, and there's a wealth of (buildings) on the market. There's been a lot of downsizing and consolidation nationwide."

Since suddenly closing the factory on April 2 and laying off 277 workers, Sony hasn't indicated when it plans to vacate the space. The company also hasn't said whether it will try to sell the facility or find someone to lease it to.

For the Eugene-Springfield area, the big question is whether any users that might want the site will be able to match Sony's heft as a major employer and economic engine, bringing in wealth and jobs.

The Lane County assessor's office places the market value of the building and its 34 acres at about $66 million. That's excluding the $5.3 million worth of manufacturing and packaging equipment, computers, desks and other movable items in the building.

The property is in a campus industrial park, with special zoning that encourages large-scale light-industrial firms, regional distribution centers, research and development companies, corporate headquarters and some supporting commercial businesses. Heavy, gritty manufacturing is not allowed.

For months, in a debate unrelated to Sony, there has been discussion about exactly what kinds of firms should be allowed in the park, Springfield's prime campus-industrial area.

An advisory panel, whose chairman is Springfield Councilor Stu Burge, will review the zoning rules and make recommendations to the City Council by the fall, said Springfield Mayor Sid Leiken.

Leiken said he wants the rules to be flexible enough to allow software, biotech and other companies that aren't major manufacturers. But he said he also wants the rules to be strict enough so that prime industrial land isn't frittered away on uses that could be put elsewhere in the city.

Filling the Sony property quickly - and finding a user that provides good jobs - may be incompatible goals.

"We'd love to get someone in there right away to replace those jobs, and we know that's a big piece to bite off," said Jack Roberts, executive director of the Lane Metro Partnership, the county's main business-recruitment agency.

Roberts cautioned against rushing. "It's not just a question of getting a live body in there," he said. "We want to have good jobs and a sustainable industry in there."

Roberts said he'll talk with outside firms as well as any local firms looking to expand.

Bob Warren, regional development officer with the Oregon Economic and Community Development Department, said he'll focus on recruiting an industrial user "because it's the kind of jobs we just lost."

Any new industrial user is unlikely to pay as well as Sony, experts said. Entry production workers at Sony started at $9.50 an hour, and could increase to $10 an hour after six months. The company also had skilled personnel such as engineers who earned much more than that.

"Rarely do you ever replace a company with equal or higher wages," Donovan said. Over nearly eight years, the Sony workforce had matured and employees had climbed up the ladder. When a new company comes in, workers start at the bottom and have to be trained, he said.

The building was designed for CD manufacturing, so another CD maker would be likely to see the most value in it. But finding another CD maker is unlikely given the sluggish state of the music industry. Slack demand for CDs is what prompted Sony to close the plant.

Roberts and others, however, hope that a company that makes DVDs, or perhaps gaming software, might be interested in the plant.

The building could be converted to other light industry, such as metal fabrication, electronics, or instrumentation, Donovan said.

Given the size of the building, it may have to be subdivided, he said. But splitting it up might be difficult because it has many characteristics that are suited to a single user - for example, one large central cafeteria.

The Eugene-Springfield area already has two large factories left vacant when other manufacturers closed: the 107,500-square-foot former HMT Technology Corp. building and the 104,000-square-foot Rosen Products LLC complex, both in west Eugene.

The Portland area also has several large vacant industrial properties, including the 435,000-square-foot Komatsu Silicon America wafer factory in Hillsboro.

Some companies that close plants are able to find buyers. Semiconductor manufacturer Fujitsu Microelectronics sold its shuttered Gresham facility last August to another chip maker, Microchip Technology, for $183.5 million.

But finding buyers takes time, said Michael Ogan, senior manager of business development for the Portland Development Commission. "It just sort of happens on its own schedule," he said.

CAPTION(S):

At 365,000 square feet on 34 acres, the Sony plant is big by national standards for vacant industrial buildings. INSIDE Dwight Silverman on software for CDs / B2 Bill Husted on raising the dead / B2 Sony: Site might interest a company that makes DVDs Continued from Page B1