Denison Buys, Leases Closed ConAgra Site

The Denison Development Alliance paid $725,000 for a 1970s building that ConAgra had listed for $1.1 million in separate agreements with four brokers over the last three years, Tony Kaai, the alliance president, tells GlobeSt.com. The costs for acquisition and the build-out for SignWarehouse.com, which penned a 10-year lease for the property at 3401 Texoma Dr., were covered by sales tax revenue, which totals about $1 million per year for the rural Texas town, he says. The strategy gives some leverage for "an aggressive approach for a small community" that faces competition from larger suburbs closer to Dallas, Kaai emphasizes.

The alliance is assuming a property management role for empty buildings in Denison's bounds to backfill dark spaces with long-term tenants. Like the ConAgra site, the same strategy was applied to an 85,000-sf shuttered Wal-Mart, where all but 3,000 sf is now filled in a building owned by a non-profit private industrial foundation. The alliance also is pushing another 85,000-sf, climate-controlled industrial building, vacated two years ago.

SignWarehouse.com, now located at 1515 S. Sam Rayburn Freeway in Sherman, is planning a Jan. 1 move to Denison. The building will be gutted and divvied into 10,000 sf of office space and the balance as warehouse for the distribution of all types of supplies to sign manufacturers. Terry Wright of the Wright Group in Carrollton is the project architect. Kaai hopes to be floating general contracting bids in 30 days.

SignWarehouse.com, which will be paying about $4 per sf gross, was looking for expansion space and none was to be had in its hometown, about eight miles from the ConAgra site. Kaai says the deal was struck with Sherman officials' knowledge so as not to cause a rift with its Grayson County neighbor. But, SignWarehouse didn't sign without looking around, surveying the scene as far north as the Red River and into southern Oklahoma.

ConAgra acquired the property in the mid-1980s, taking over the operation of a margarine-processing facility when it acquired Beatrice Foods Inc. of Chicago. Kaai says 100 employees were displaced by the ConAgra plant shutdown in March 2000. The factory fronts US Highway 84, sits about a half mile from US Highway 75 or Central Expressway and is roughly 75 miles north of Dallas.

Tom Pearson of Cushman & Wakefield of Texas Inc. and PJ Morgan of Omaha-based PJ Morgan Co. negotiated the sale for ConAgra. Kaai was the city's "point man."

Pearson says a "steady stream" of manufacturers from candy to fiberglass looked at the site. "But at the end of the day," he says of SignWarehouse, "this company was the best fit for it." Denison, he adds, got "a good deal, but it is requiring some work to bring it into good condition."