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Friday, Oct 7, 2022

Can Maker Opens Up More Space in South Bay

Like the beer and soda cans it used to produce, the Ball Corp. plant in Torrance is now an empty shell.

The Broomfield, Colo., company is decommissioning the plant after shutting down operations this month, moving one production line to Canada and expanding a plant in Texas, which will produce the other line.

What will replace the factory, which employed 120 workers? Likely a warehouse.

That’s been the replacement of choice for former manufacturing facilities across Southern California, but especially in the South Bay, where real estate brokers say there’s a lack of modern, high-quality warehousing and distribution space for imported Asian products passing through the ports of Los Angeles and Long Beach.

Xebec Realty Partners, a Seal Beach commercial developer that’s buying the Ball site, won’t talk plan specifics, but acknowledged many former factory sites have become warehouse and distribution centers.

“There’s a lot of manufacturing leaving the state for a lot of reasons, and they are getting backfilled with warehousing and distribution,” said Neil Mishurda, executive vice president of Xebec, who added that the market for Class A warehousing and distribution space is extremely tight.

Other brokers say the market, coupled with regulations that have made it more difficult for manufacturers to operate in Los Angeles County, means the Ball plant will almost certainly be turned into warehousing.

“The powers that be chased all the manufacturing out of here a long time ago,” said Erik Knirk, vice president of real estate development at brokerage firm Fremont Associates in Torrance. “It’s all warehousing and distribution now.”

The county had 389,000 manufacturing jobs in 2009, down 38 percent from 10 years earlier, according to the Los Angeles County Economic Development Corp.

Ball announced in January that it planned to shutter the Torrance plan. Company spokesman Scott McCarty said Ball has lost business on the West Coast while retaining contracts with bottlers and brewers in the East.

Shipping empty aluminum cans more than a few hundred miles isn’t cost-effective, so the company is expanding a plant in Fort Worth, Texas, and moving one of the Torrance production lines to a plant in Whitby, Ontario. The Torrance plant, which produced 12- and 16-ounce cans, had 120 employees in January and about 100 as of Sept. 1, the last day of production.

About a dozen employees will remain through November, helping ship remaining product and decommissioning the facility, McCarty said.

Preliminary discussions

Ball started making cans at the plant 1998, when the company acquired the facility along with the rest of the metal beverage container unit of the now-defunct Reynolds Metals Co. The plant opened in 1965.

The prospective owner of the site, Xebec, yet to close the acquisition, has a portfolio that includes a warehouse and distribution center in Long Beach and another outside of Dallas, as well as industrial parks in El Monte and Fort Worth. It also owns apartment complexes in Colorado and Texas.

The Long Beach site, called 100 Victoria, is a 187,000-square-foot transloading and warehousing facility located just off the Long Beach (710) Freeway. The site is advertised as ideal for trucking companies because of its proximity to the ports.

Mishurda said Xebec plans to demolish part of the Ball facility, which comprises three connected buildings and a fourth separate one. The company will keep but redevelop the newest space, a 116,000-square-foot building, then put up a building next to it.

Xebec has had preliminary discussions with Torrance city planners but has not submitted a formal plan. Mishurda said the site will be used for “general industrial use, which obviously is a wide gamut of uses.”

Mishurda said Torrance is different from the rest of the South Bay, with more high-tech and corporate users. “There are a lot of companies that have a manufacturing component. We’re trying to attract those types of uses,” he said.

However, brokers say warehousing is the most likely use for the site.

“It’s very rare that we’ll have a classic manufacturer, someone who makes things, come into our market. That’s just the nature of our marketplace,” said Jim Biondi, a senior vice president with Grubb & Ellis Co. who specializes in the South Bay real estate market.

On the other hand, there’s a shortage of modern warehousing and distribution space with larger yards, bigger loading docks and higher ceilings.

“I think good-quality Class A space, functional space, is in pretty good demand. We’ve been transformed from a manufacturing region to a more distribution and warehousing region,” Biondi said.


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