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Thomas Russell

Wetlands issue delays Ashley

Ashley Furniture ChairmanAshley Furniture Chairman Ron Wanek points to an area that has been deemed wetlands on a 640-acre site that it is developing for its Mid-Atlantic Manufacturing and Distribution Facility in Davie County, N.C. The discovery of four acres of wetlands on the site is delaying the project by about a year.
ADVANCE, N.C. - The discovery of four acres of wetlands on an Ashley Furniture manufacturing and distribution center here has caused a reconfiguration of the project as well as millions of dollars in unanticipated costs.
     But the company told Furniture/Today that it will move forward in spite of these challenges - which include $1 million a month in unanticipated operational costs, and $1 million in engineering costs to reconfigure the project to protect the wetlands.
     The company has about 120 workers on site and still plans to employ up to 550 over time.
     Ashley Chairman Ron Wanek invited Furniture/Today to the site last week. He said the discovery of wetlands last summer had suspended construction activity at the site.
     The 4.1 acres of wetlands are on a 640-acre piece of land that houses former R.J. Reynolds production and tobacco storage facilities. The one-square-mile area contains about 1.7 million square feet of buildings, including 32 former tobacco storage units that are each about 36,000 square feet.
     Just over three acres of the wetlands is a low-lying area that captured treated wastewater from a former RJR plant. The balance surrounds a ravine and a pond that held storm water runoff.
     After initial due diligence, Ashley officials didn't believe the site contained any wetlands, Wanek said. This was based on opinions of third party experts and other officials that a permit from the Army Corps of Engineers wasn't necessary - an opinion that was later revised.
     Last week, the largest area of wetlands appeared dry, even after a recent rainfall. Yet the determination of wetlands is more complicated than whether a piece of land looks dry or wet. The Army Corps of Engineers definition is based on a number of factors, including the moisture and molecular content of soil beneath the surface, along with vegetation on the site.
     Ashley could have proven that the wetlands were created by a man-made irrigation system and other natural runoff. However, that would have required testing that could have taken three to five years, officials said.
     The company started work on the site soon after announcing the land acquisition last April. It has now received approval of its new construction plans, contingent on the approval of a storm water treatment plan.
     If that plan receives approval as expected, Ashley could resume construction on its warehouse and distribution facilities by April and have the facility up and running by March of 2014.
Ashley is using partAshley is using part of this 418,000-square-foot building, formerly an R.J. Reynolds tobacco products plant, for distribution and administrative offices.

     After that, plans call for the conversion of a current 418,000-square foot facility it is now using for distribution and administrative offices into a case goods and upholstery manufacturing plant.
     About 200,000 square feet would be for upholstery production and another 200,000 square feet would be for case goods production. The rest would be used mostly for administrative offices and employee training.
     The company was originally going to add 620,000 square feet of distribution near this building, with additional space to be added later.
     Now it plans to build a one million-square-foot facility all at once, in a first phase to be completed as early as next March. Additional square footage would be added in a second phase.
     Officials were still analyzing how the wetlands delay would affect that timing.
     Wanek praised the engineering work that R.J. Reynolds did on the site and said that it remains an excellent property for Ashley's needs, particularly as it is well buffered from neighboring properties.
     "This has to be the most perfect site I have ever seen," Wanek said, later adding, "With all the sites we have that we have outgrown, this was a dream."
     Yet, Wanek, who has built his business around efficiency, was also frustrated by the delays. The additional operational costs does not factor in lost business, with the company only doing about half the volume at the facility that it had expected at this point.
     He said dealing with government regulations involving the project has taken added time and effort.
     "They are making it tougher and tougher," Wanek said. "They are making it difficult to do business in the U.S. compared to other places around the world."

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