In 2015, NorthPoint Development swept into a forlorn commercial district in a St. Louis, Missouri, suburb and went to work.
“It was an area that the city had annexed, and it was kind of a mess,” said David Cox, Hazelwood City’s economic developer.
NorthPoint promised to finish the cleanup and build six industrial/commercial buildings in five years.
They’ve exceeded that, and now they’re on track to build eight in three years, Cox said, adding NorthPoint successfully lured Missouri’s first Amazon distribution center to the industrial park earlier this year.
The same young company, which has built a reputation attracting high-caliber companies to its commercial properties, has been scooping up real estate in Northeast and Eastern Pennsylvania starting around the top of 2016.
A Times-Shamrock review of its properties shows NorthPoint so far has bought, built or is building more than 4 million square feet of commercial and industrial space in Schuylkill, Luzerne and Lackawanna counties.
Most recently, NorthPoint spent $19.4 million on two industrial buildings on 21 acres in the Jessup Small Business Center through a subsidiary, NP 81 North Industrial LLC. The Sept. 14 purchase of 7 and 15 Alberigi Drive marks NorthPoint’s northernmost acquisition in Pennsylvania.
“They’re the real deal, and they’re not afraid to spend money,” said John Augustine, president of Penn’s Northeast, a cooperative charged with attracting large firms to the region. “They’re fulfilling promises, and I think that was seen in Hanover.”
A NorthPoint official did not respond to several interview requests.
The company built the hulking 800,000-square-foot Chewy.com distribution center in the Hanover Industrial Park and has two other buildings under construction nearby on the 172 acres it bought last year.
It recently bought the bankrupt Schuylkill Mall in New Castle Twp. near Frackville at auction and is in the process of leveling it for two new industrial buildings. Its mall project follows its purchase of a three-years vacant building in the Highbridge Industrial Park, which is now leased to another firm.
In Hanover Twp., NorthPoint built the Chewy.com center and is still scooping up more real estate in the area. In the last month, It bought a warehouse near the Chewy.com site for $10.7 million.
“We buy buildings across the country,” Brent Miles, a NorthPoint vice president said to a Times-Shamrock reporter last month. “We like the area.”
Like many other firms, NorthPoint typically locks in some type of business development tax incentive where it builds, ensuring it will save millions on property taxes for the first few years of operation.
In both Hanover Twp. and at the Schuylkill Mall, NorthPoint received Local Economic Revitalization Tax Assistance, or LERTA, status from the local governments and school districts.
LERTA status gives companies a temporary tax break on any improvements made to the property. They still pay taxes, just not as much as they would if the government considered the improved property.
One of the Jessup properties is partly occupied by paper products maker LBP Manufacturing LLC. The other, now vacant, enjoys Keystone Opportunity Expansion Zone status — in which a number of state and local taxes are suspended until 2020.
NorthPoint boasts a portfolio of industrial, residential and self-storage space across the country totaling over 21 million square feet. Square feet are the stock and trade among real estate developers.
Its rapid-fire acquisitions in Northeast Pennsylvania prove it can punch in the same weight class as some of the region’s biggest commercial real estate names, and that the region has room for more than one alpha.
“Whenever major developers come into the market and build on speculation, it’s a sign that the market has matured as a preferred location for major industrial projects,” said Jim Cummings, the marketing vice president at Mericle Commercial Real Estate Services based in Plains Twp.
Mericle owns and manages 13 million square feet of commercial, office and medical real estate.
The company has developed more than 20 million square feet and has played a key role in growing some of the region’s most notable business parks, including the CenterPoint Commerce parks in Pittston and Jenkins townships, Hanover Industrial Estates and Humboldt Industrial Park, Hazle Twp.
As the cost of business swells in larger cities like New York and Philadelphia, what Cummings described as the Interstate 81/Interstate 78 corridor — from the New York border to the Maryland border — has become more attractive to growing transportation and warehousing firms.
His company competes with builders throughout that corridor, and he doesn’t see NorthPoint as a threat to Mericle’s lead in Northeast Pennsylvania.
“We’re very comfortable that we’re going to remain the premier developer in the marketplace,” he said.