The U.S. Department of Energy has outlined the potential benefits of an Appalachian ethane storage hub in a new report to Congress.
The report – “Ethane Storage and Distribution Hub in the United States, commissioned by congress – says the shale oil and gas boom has transformed global energy markets and made the U.S. the largest combined crude oil and gas producer in the world. … The Appalachian Basin’s shale resource endowment is so bountiful that, were it an independent country, the region would be the world’s third largest producer of natural gas today.”
Natural gas liquids, it says, are a valuable component of the shale gas, and ethane in particular plays a vital role in the petrochemical industry – for making plastics and resins.
Ethylene is the most common product derived from ethane and right now, the report says, more than 95 percent of ethylene production is concentrated in Texas and Louisiana. This isn’t so much as national energy security concern as an economic security concern.
In its characteristic bland language, the report says, “The establishment of an ethane storage and distribution hub near production from the Marcellus and Utica plays could provide benefits to the broader petrochemical and plastics industries along the lines of supply diversity. The present day geographic concentration along the Gulf Coast of petrochemical infrastructure and supply may pose a strategic risk, where severe weather events limit the availability of key feedstocks.
“Petrochemical expansion beyond the Gulf Coast would increase geographic diversity,” it continues. “This geographic diversity could provide manufacturers with flexibility and redundancy with regard to where they purchase their feedstock and how it is transported to them. Moreover, this flexibility and redundancy, as well as the overall increase in U.S. feedstock production, could mitigate the potential for any price spikes in petrochemical feedstocks that could be caused by a severe weather or other disruptive event in any one region of the U.S.”
Report highlights
Here is a tour of notable observations form the report. It uses the abbreviations NGL and NGPL for natural gas liquids and NGPL for liquids processed at plants.
The Energy Information Administration projects NGPL production will double from 2017 to 2050, with most coming from the Marcellus/Utica and southwestern Permian play through the next 10 years.
NGLs are stored underground in pressurized caverns. “Storage of NGLs is necessary to balance seasonal supply and demand variations. … Storage is particularly important for ethane crackers that use furnaces and complex processing that are laborious to restart. Having ethane feedstock available in storage helps large petrochemical plants ensure continuing operations.”
Several hubs already exist, including three major ones in Mont Belvieu, Texas, Conway, Kansas and Sarnia in Ontario, Canada.
A storage hub is more than just the hole in the ground where the liquids get stuffed. It’s the infrastructure to transport the gas, processing plants to prepare it for storage, cracker plants to turn the ethane into ethylene, and downstream plants to turn the ethylene into plastic products.
Storage hubs can evolve into market hubs – as in Texas and Kansas – where liquids are physically transported and financially traded as commodities.
Here in the Marcellus/Utica, one cracker plant is under way: Shell Chemical’s in Monaca, Pa., northeast of Pittsburgh. Two others are proposed have experienced delays: Odebrecht/Braskem in Wood County and PTT Global/Daelim in Shadyside, Ohio, between Wheeling and Moundsville. The area could support a total of four to six crackers, based on various estimates.
And Appalachia Development Group is developing the actual storage facility. In January, the Department of Energy invited the group to submit a Part II application for loan guarantee for a $1.9 billion loan, which will require securing another $1.4 billion in equity.
Three sites are in view: one in the Northern Panhandle; one spanning portions of north-central West Virginia, southeast Ohio and southwest Pennsylvania; and one in the Kanawha River Valley. The Appalachian Oil and Natural Gas Consortium, housed at WVU, considers the Kanawha site the most promising.
The Appalachian hub’s potential can be seen in the existing chemistry industry’s economic activity inside a 300-mile radius of Pittsburgh as compared to the Gulf Coast. The industry around Pittsburgh produces $308.8 billion in revenue and supports 943,000 jobs, compared to $171.1 billion and 333,000 jobs for the Gulf.
“Growth in the petrochemical industry would also impact other industries, and additional required supporting infrastructure would be needed. For instance, increased electricity demand could require additional power plant capacity; increased truck traffic could impact existing road infrastructure. These impacts could be mitigated to some degree through coordinated planning and infrastructure development.”
Lawmaker comments
People familiar with the report and the process required to bring one here noted that this will largely be a private-sector operation. The government’s role will be in such things as the DOE loan program and in evaluating and approving the many permits that will be required.
Rep. David McKinley, R-W.Va., sent out notice of the report and said, “Natural gas production in the region has grown by leaps and bounds over the past decade. The next logical step is to take full advantage of this resource and develop a petrochemical industry in the region.
“With the vast majority of America’s petrochemical industry located on the Gulf Coast and vulnerable to disruptions by hurricanes, it is in the national interest to diversify and build a secondary hub in West Virginia, Ohio, Pennsylvania, and Kentucky,” he said.
“West Virginia and surrounding states are poised to become a leader in petrochemicals and manufacturing, but we need to build the necessary infrastructure to make it work.” He’s committed to working with DOE Secretary Rick Perry and other stakeholders to make it happen.
Sen. Shelley Moore Capito, R-W.Va., said, “I’ve said time and time again that a regional ethane storage hub would do a lot to benefit West Virginia—like driving economic growth and enabling us to make the most of our natural resources.
“When we began this process, I requested that the Department of Energy explore the effects this kind of project would have in our region, and I was excited to see Secretary Perry and the department release their report this week. The study – the second I requested – further confirms why I have been a strong advocate for this project by highlighting its many benefits, including economic security, growth, and job creation.
“I’m excited about the benefits this could bring to the Mountain State, and I will continue working with Secretary Perry, the Department of Energy, and others to see this project through,” she said.
Sen. Joe Manchin, D-W.Va., said, “I have long supported the environmentally responsible development of a natural gas liquids storage hub that will create good-paying jobs, and I am pleased that the Department of Energy’s report recognizes the benefits of the development of an ethane storage hub in Appalachia. Given the high concentrations of natural gas in our region, I look forward to working with the Department of Energy to examine the potential national security benefits of a hub that can support all natural gas liquids.”
Black Diamond Realty would like to formally congratulate Mark J. Nesselroad on his selection as a WV Executive Young Gun. This award proudly witnesses Mark’s inspiring passion, boundless success, and will to accomplish great things within the community.
West Virginia Executive magazine established this honors program to recognize those who drive the success of the Mountain State. These ‘Young Guns’ represent West Virginia’s next generation of leaders who are already accomplishing great things through their careers both in the business world and their communities.
ClickHERE to learn more about Mark J. Nesselroad and his commitment to serving the Morgantown community.
Do you know Marcellus & Utica? Let us introduce you to Mid-Atlantic’s most popular household names.
Throughout the latter part of the past decade, most people in north central WV and southwestern PA had never heard of Marcellus or Utica. Fast forward ten years, Marcellus and Utica have become household names. How did it all happen? What changes in the energy field have we experienced in the past decade? Where are things heading in the future? What challenges must we overcome in order to maximize natural gas’s potential? This article drills down (pun intended) into Mid-Atlantic’s next energy powerhouse.
During the first wave of oil and gas energy expansion, which started in 2008 and began declining in 2013-2014, drillers were using key geological metrics to “explore” Marcellus and Utica shale plays. In the early years, positive results led to increased drilling activity. Other companies took notice. Before we knew it, north central WV and southwestern PA had a natural gas and oil boom occurring in its backyard. Heavy drilling activity led to many service providers flocking to the area to secure profitable service contracts. Service contract work includes all aspects of servicing a well, from start to finish, such as engineering, excavation, fracking, pressure control, water hauling, valve repair/monitoring, amongst many others. Thousands moved to the area. Many of the workers were brought in from out-of-state because, our local workforce did not have the experience and expertise these companies needed. Many of these workers stayed in local hotels/houses, ate at our restaurants/taverns and shopped in our malls and retail outlets. Some businesses experienced exponential growth during this period. As drilling activity continued to increase, OPEC nations flooded the global energy market. Saturation led to quickly declining commodity pricing. Once the commodity pricing dipped to a level close to or at “break even”, it no longer made economic sense for drillers to drill. Over a period of a couple years, drillers slowed or completely halted drilling plans. Why? Supply outpaced the market. Additionally, infrastructure, via pipelines, was not in place to efficiently transfer the gas to larger markets.
For 24-36 months thereafter, Marcellus and Utica activity slowed dramatically. Market saturation, which lead to depressed commodity pricing, were the primary culprits for the lull in drilling activity. Most O&G drillers capped their wells and halted production. The industry retracted and many companies went out of business or were absorbed. Major producers developed strategies to control growth and mitigate risk. Many out of state service providers, who had moved to the region to capitalize on lucrative contracts, struggled to justify having a location within the Marcellus and Utica. Many witnessed numerous businesses vacate in the middle of the night or file for bankruptcy protection against creditors. In turn, this tailspin left some landlords in precarious positions with a tough decision of whether to “throw good money at bad money” in the way of hiring a real estate attorney to file suit or simply move on by looking for another tenant. At Black Diamond Realty, we saw industrial real estate demand and office demand, albeit to a lesser extent, decrease dramatically.
What has changed? Has there been a resurgence? Many have considered natural gas the cleaner wave of the future. For decades, numerous challenges, which included regulatory, economic and intellectual constraints, existed making extraction and transmission difficult. The story is changing. North central WV and southwestern PA are in the midst of a second wave of oil and gas expansion. Unemployment rates are near record lows and wages are rising. Hotel occupancy and ADR are sharply on the rise. Restaurants are enjoying a resurgence in top line revenue. All of this is the trickle-down effect sparked by a growing energy industry.
There are three major economic drivers which are in various stages of planning, construction and implementation. The first demand driver is natural gas pipelines. Pipelines provide the infrastructure needed to deliver the natural gas to primary and secondary markets. Simply put, northern West Virginia and southwestern PA are collectively sitting on more natural gas than the 250-mile region could ever feasibly consume. Several, large-scale projects are in process which will forever change the landscape and natural gas economics.
The Atlantic Coast Pipeline (ACP) project, stretching 600 miles from Bridgeport, WV through Chesapeake, VA and ending in Robeson County, NC, is currently under construction. According to Atlantic Coast Pipeline, “The infrastructure project will generate $377 million a year in energy cost savings, $28 million a year in new local tax revenue, 17,240 new jobs in the construction industry and 2,200 new jobs in manufacturing and other new industries.” Another major pipeline is called the Mountain Valley Pipeline (MVP). The Mountain Valley Pipeline, stretching 303 miles from northwestern West Virginia to southern Virginia, will be up to 42” in diameter and will have a 50 foot easement (post-construction). There will be three compressor stations along the route which include locations in Wetzel, Braxton and Fayette Counties in WV. Both pipeline projects have faced several regulatory hurdles, including federal injunctions to halt construction, but many are optimistic the challenges will be overcome. Many other pipeline projects are in the planning, construction and implementation phases. ACP and MVP are just the tip of the iceberg. According to MarcellusDrilling.com, “There is more than $23 billion in planned pipeline investment to build more than 3,200 miles of pipelines – for the Marcellus/Utica region. If you add these 15 projects together (see chart), they will move another 17 billion cubic feet of Marcellus and Utica natural gas and 345,000 barrels of natural gas liquids (NGL) per day.” Marcellus Drilling has provided a chart showing pipeline projects in various phases of the planning and implementation process. See below. The second demand driver is natural gas fired power plants. Coal provides about one third of the United States’ electricity. Tides are turning with an abundance of gas available within the Marcellus and Utica Shale plays. On November 1, 2018, Sara Welch of Shale Gas Reporter, wrote an outstanding article (View Article Here) which forecasts natural gas powered plant production. A few key takeaways can be found in the following statements, “Over the next several years, 26 combined-cycle gas-tubing power plant projects are planned for Pennsylvania, West Virginia and Ohio. Pennsylvania will house the most with 15 to be built, contributing 14,730 MW of capacity. Ohio will be home to eight projects that would add 7,695 MW of capacity. Lastly, West Virginia is slated for three gas-fired power projects that would add more than 2,000 MW of capacity.” Ms. Welch went on to translate how the electric power generation will translate into natural gas consumption: “The proposed power generation in the Appalachian Basin is expected to come on line by 2020, adding about 1.16 Bcf/d of gas demand.”
The third demand driver, which also poses the greatest downstream opportunity, is cracker plants. Why? Think chemistry. Cracker plants have sophisticated equipment in which the “cracker” takes ethane, a component of natural gas and breaks it down into ethylene. Extreme heat is used during the process to break apart the molecular bonds holding it together. Ethylene is the root chemical for plastics, resins, adhesives and synthetic products used in every aspect of modern life. Our society depends on this natural gas extraction process in order to enjoy many of the end products and daily conveniences, such as plastic containers, shirts, and plastic bags. Cracker plants and large industrial facilities are necessary to make this happen. One is already in the construction phase. According to MarcellusDrilling.com, “Shell Chemical Appalachia LLC broke ground in 2017 on the $6 billion complex in Monaca, PA, about 30 miles northwest of Pittsburgh. It is Shell’s first petrochemical plant built outside the Gulf Coast in decades.” Two additional cracker plants are in various planning stages. The two other potential cracker plant locations are Belmont County, OH and Wood County, WV.
To fully capitalize on the O&G boom and recognize significant downstream economic opportunities, this region needs to overcome three primary challenges.The challenges listed below can be overcome via collaboration and cooperation amongst various public and private sectors.
Black Diamond Realty continues to work to resolve some of the commercial real estate challenges. John Denver wrote a popular song, Country Roads, in which “mountain mama” is an internationally recognizable phrase. Our landscaping is picturesque. Our mountains are breathtaking. Both also create challenging topography. Moving dirt and expanding utilities requires significant capital which ultimately drives up land costs. Many Marcellus & Utica end-users (drillers, service providers) need large tracts of land for laydown yards, industrial buildings and eventually, as a downstream opportunity, manufacturing operations such as the plastics industry. Industrial land is typically on the lower end of the commercial real estate value spectrum. Industrial acreage in north central WV, on average, ranges in value from $75,000/acre to $225,000/acre. Our mountain-filled region provides us with natural beauty and scenic enjoyment, but it also creates a reality in which there are few opportunities to secure large tracts of land at reasonable pricing.
We would like to explore two cases that include many stakeholders, mixed with private investment, that resulted in positive outcomes for the community and business. Both assets are currently being marketed by Black Diamond Realty. Please spend a few minutes reviewing our detailed marketing flyer.
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In 1910, Michael J. Owens opened Owens Bottle Works on a 40 acre site in Fairmont, WV. During its peak, Owens Illinois employed over 1,000 people and produced 180,000 bottles a day. The site was operational from 1919-1982. After closing its doors in the early 1980s, the site sat vacant for roughly 35 years. A local entrepreneur and developer, Tom Laurita, purchased the asset with the intent of revitalizing Fairmont’s east side. Mr. Laurita and his team, including Russell Bolyard, worked tirelessly and diligently with numerous federal, state, county and local agencies including WVDEP, City of Fairmont, amongst others. Over a two year period, a plan was formulated then implemented to remediate and convert the brownfield site into a thriving business park. Soil remediation, FEMA considerations and stream preservation were key factors in revitalizing this site. For their efforts, Merit Development received 2016 Brownfield West Virginia Environmental Impact Award. Today, infrastructure improvements are well underway and steel is rising from the once motionless dirt. Boasting 40 acres less than one mile from I-79, Exit 137, Speedway Business Park has three new tenants with a fourth building under roof. Explore this project via our detailed marketing flyer. Click HERE to view. Source:Merit Development’s Development Conference Powerpoint slides.
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Formerly 825 acres of farmland near the Monongahela River, today’s Morgantown Industrial Park started to take shape in December 1940. In November 1941, the property was dubbed “Morgantown Ordinance Works” with a purpose of supporting the United States war efforts in World War II. A plant was built to produce ammonia for army ammunition. At its peak, the plant had more than 1,400 employees and produced about 18,700 tons of ammonia monthly. Alcohol, hexamine and formaldehyde were also produced in the plant. Near the end of World War II, operations ceased. Morgantown Ordinance Works, owned by J.W. Ruby, took over the property and turned it into an industrial park.
Fast forward several decades, and local entrepreneurs, Kevin and Glenn Adrian, purchased the park under Enrout Properties LLC. They were attracted to the investment opportunity partially because of its tremendous access (truck, rail, river and barge) plus abundance of developable land. The Adrians worked with state, county and local officials to create a tax increment financing (TIF) district. According to Wikipedia, “TIF is a public financing method that is used as a subsidy for redevelopment, infrastructure and other community-improvement projects.” Establishing a TIF in the industrial park allowed the Adrians to invest significant capital into excavation, site stabilization and infrastructure with the purpose of creating large industrial pads which are rare in north central WV. In addition to TIF, the Adrians have worked with federal and state agencies to mitigate brownfield areas within the park.
Today, Morgantown Industrial Park boasts 20+ diverse businesses that offer a range of industrial services and products. On November 1, 2018, Dominion Post quantified the park’s success with the following TIF update: “Established in 2008 with a base amount of approximately $39 million, the district was last assessed at about $79 million.” The Adrians set out to further the legacy of 825 riverfront acres in Monongalia County. Statistics show they have been very successful in overcoming challenges and capitalizing on industrial demand growth. They are far from done. Dirt is currently being moved to create two 6+ acre sites and by mid-2019. The park will add over 30 acres of additional industrial sites including one site which will provide 20+ flat acres. It doesn’t stop there. Currently, the Adrian’s are working with the appropriate county and state organization looking to improve interstate access to the park which would provide over 100 acres of additional industrial sites. The Morgantown Industrial Park understands the potential downstream impact that the oil and gas boom could have on North Central WV. They plan to be ready with sites and infrastructure to support that growth. Explore this project via our detailed marketing flyer. Click HERE to view. Source:http://www.uppermon.org/news/dominion%20post/DP-MIP-22Aug11.html, http://wajr.com/monongalia-county-commission-receives-good-news-on-tif-districts/
Coal will, most likely, always be a source of energy in the United States. It is virtually impossible to completely eliminate it as an energy source. However, coal’s days of being the “black diamond” of West Virginia, are fading. Marcellus and Utica have taken center stage.
Bridgeport Listed by USA Today as One of “America’s 50 Best Cities to Live” in Online Money Section
In an edition of USA Today’s on-line edition, the City of Bridgeport received a little bit of love from the Money section of the newspaper. The publication released its “America’s 50 Best Cities to Live” and Bridgeport made the cut. In fact, it was the only municipality in the Mountain State to make the list.
Bridgeport came in at No. 46. The Web site states that “24/7 Wall Street created a weighted index of over two-dozen measures to identify the best American cities to live in. The communities on this list span the country from coast to coast but are disproportionately concentrated in the Midwest.”
According to the article, in the city “45.3 percent” of adults have graduated from college, nearly the highest share of cities in the state. The high college attainment rate has likely contributed to the town’s relatively high median household income of $80,462 a year.”
The project director for the planned PTT Global Chemical ethane cracker in Belmont County said having such a surplus of the natural gas liquid so close to Eastern Seaboard population centers makes the Dilles Bottom location ideal.
Paul Wojciechowski said the Thailand-based petrochemical firm will make a final decision on construction by early next year, during the Ohio Valley Regional Oil & Gas Expo at the James Carnes Center Tuesday.
If built, the cracker construction would generate thousands of temporary jobs and hundreds of full-time permanent jobs, along with the millions of dollars in wages paid and associated economic activity generated. Wojciechowski also told the several hundred attending that any plans to burn the liquid are counterproductive. “Friends don’t let friends burn ethane. That would be a waste,” he said. Developers of the proposed $615 million Moundsville Power natural gas power plant previously announced intentions to burn ethane in their facility.
Also, some producers now blend ethane into their methane streams to heat homes. Wojciechowski said he plans to meet with Ohio Environmental Protection Agency officials this week to discuss some of the permits for which PTT Global Chemical will soon apply. Such a project would create certain types of air pollution, according to documents filed with the Pennsylvania Department of Environmental protection for the Royal Dutch Shell ethane cracker planned for Monaca, Pa. Although Wojciechowski emphasized he could not promise the plant would be built, he said the nearly 500- acre site between Ohio 7 and the Ohio River would be preferred. “It was important for me to show you just how perfect this area is for our plant,” he said, displaying an aerial photograph of the site.
Contractors working for FirstEnergy Corp. are demolishing the closed R.E. Burger power plant. The massive project would include the Burger site, along with another nearly 300 acres to the west. Wojciechowski said plans call for having infrastructure that would “crack” the ethane into ethylene, which then would be transformed into ethylene glycol for antifreeze polyethylene for plastic. “Hundreds of rail cars of polyethylene pellets per month,” Wojciechowski said of how much completed material the plant would ship via railroad.
Expo attendees also heard from Rob Wingo, senior vice president of Rice Energy, on Tuesday. Rice is one of the largest producers of natural gas in the region, claiming eight of the 10 most prolific natural gas wells in Ohio during the final quarter of 2015 — all in Belmont County. “We do have a great technology team that keeps us ahead and gives us great well results,” Wingo said. Wingo said every driller in the region is waiting for more interstate pipeline capacity to come online.
Presently, the Federal Energy Regulatory Commission continues reviewing the Atlantic Coast Pipeline, the Mountain Valley Pipeline, the Rover Pipeline, the Leach XPress pipeline, the Mountaineer XPress pipeline and the Nexus Pipeline. Rick Frio serves as chairman of MPR Transloading & Energy Services in Bellaire and is one of the expo’s organizers. The business serves to supply fracking sand and other materials producers need. “This industry is safe, it’s effective — it’s a great thing for our communities,” he said.
Mon Health EMS officials were at The Gateway on Sept. 20 to show off their new digs — a two-story, 15,780 square-foot facility that serves dual roles as doctor’s office and EMS substation.
While the majority of the building houses Wedgewood Family Practice, roughly 1,000 square feet of the building contains a drive-through vehicle bay large enough for two ambulances and the needed accommodations — a day room with a kitchenette, seating and television, office space with multiple work stations, storage and restroom facilities.
Mon Health EMS Director Dave Custer saidEMS operations began rolling out of the new facility earlier this month. “This is replacing and upgrading our station we had in Osage,” he said. “It’s a better location for us to respond, not only to the interstate quickly, but to Star City, Westover and the Blacksville area.” Custer said one ambulance is operating out of the new building, but a second could be added permanently or temporarily in the event of anticipated traffic disruptions or other circumstances. He went on to say that Mon Health EMS is looking at the Grafton Road area and the Pierpont/Cheat Lake area for additional ambulance staging locations.
The agency already has an agreement with the Blacksville Volunteer Fire Department that allows an ambulance to be staged at the fire station. “By having stations out in all four quadrants of the county, we really can cover this county pretty well,” Custer said. Mon Health invested $5 million to build and equip the entire facility.
Are you interested in The Gateway as a new or additional location for your business? Click HERE to view our detailed marketing flyer for The Gateway and see what’s available within the park.
In many ways, WVU President Gordon Gee said, the land-grant university he leads is the heart of West Virginia. The university, in turn, put its recent focus on the hearts of West Virginia.
WVU reinforced that commitment Wednesday with the announcement of the state’s first heart transplant program, to be part of the WVU Heart and Vascular Institute. Gee was joined by West Virginia Gov. Jim Justice and WVU Medicine President and CEO Albert Wright, among others during a press conference held in the institute’s first-floor conference room.
According to a WVU Medicine press release, a letter of intent was filed with the West Virginia Health Care Authority on Aug. 10. A certificate of need was filed Aug. 20. Wright said he anticipates the program will be up and running in 2019. He explained that WVU invested hundreds of millions in heart and vascular care over the last three years, including the construction of a 10-story, $200 million tower attached to J.W. Ruby Memorial Hospital and the recruitment of Dr. Vinay Badhwar to lead the institute.
“What we’ve found is when we put people, programs and the physical plant together, we can really do magical things here,” Wright said. “The results we’ve seen in these last 24 to 36 months are nothing short of amazing.” Badhwar said those results include the creation of the state’s first advanced heart failure program and the implementation of emerging artificial heart technology. There are currently 22 West Virginians awaiting a new heart. Being on a heart transplant list requires the patient live within four hours of a transplant center.
“What we’re trying to do is make sure people have the best possible health care in West Virginia. We should not have people going away to other places,” Gee said. “There’s no reason people should not come to this beautiful state and get the best possible health care, and that’s what we’re celebrating today. I want all of you to know you’ve made possible something very special.” Justice said the strides both West Virginia and WVU have made would be unbelievable as recently as 20 years ago. “Think about John Doe in West Virginia, how much he needs you. How much he needs the ability to not have to travel all over the place for decent health care, how much he needs you to be a star,” Justice said, later adding, “I mean it. There’s no way to be more proud of our state university than I am.”
Gee noted that heart disease is the state’s leading cause of death. He said WVU and WVU Medicine has the talent and determination to tackle it head-on. “If we have the will and courage to be great, we will be,” he said.
Westover mayor seeks support for possible new interstate exit
Westover Mayor David Johnson encouraged citizens of Westover and council members to attend an upcoming Morgantown Monongalia Metropolitan Planning Organization meeting to show support for a possible new exit coming out of the Industrial Park.
Johnson informed Westover council members about the meeting at the Westover city council meeting Monday. The MPO meeting will be from 4-7 p.m. Thursday, September 20th. “This Thursday, we have an MPO meeting at the council chambers,” he said. “What they are going to discuss is the possibility of another way in and out of this Industrial Park out here. The first initial idea was to go on past, out to where the overpass goes over the interstate and make that a full-fledged exit.”
Second ward council member Leonard Smith said, “I thought that’s what they were going to do.” Johnson said with studies on various possibilities, alternative routes and ways of doing things are necessary in case of problems arising, but the exit would be a good thing for Westover and its residents.
“The first option that we discussed was coming out where the Master Graphics Road is,” he said. “Just before you get to the overpass, there’s a road that turns down to your left. They want to come out of the Industrial Park and come out about where that road comes out because that Industrial Park comes clear out almost to the interstate, with the exception of a few properties between the two. They would have the off and on ramp there.” “The significance of this is that we would be able to get about 90 percent of this big truck traffic out of Westover because about 90 percent of it will be able to get off and on at that exit, and we’d never see them on Dupont Road or on our streets, making the turns down there by the bank. You’d still have some local traffic, but you wouldn’t have the traffic like the big garbage trucks, especially the sand trucks from the oil and gas industry. They could all use that exit, and they’d be right on the interstate.”
Johnson said another benefit would be for the residents that live near the Industrial Park. “That coupled with the fact that everyone who lives out that way will not have to come all the way down by the school, all the way out Dupont Road, all the way down to the interstate,” he said. “They can get on the interstate right there and switch on and off. It will be very successful.” Johnson said funding would be the main issue to work through. “The exit at Star City is going to be completely redone in the next year and a half or so, and that money, that’s going to be funded by TIFF money. They already have the money for that” he said. “The problem with this new exit, or whatever alternative route we decide on, there’s no funding for it yet.” “I do know this much, the MPO is going to put in whatever we decide on, they are going to put in for a—they have to change their long-term control plan and get that approved by the federal government. It’s going to be a process.”
After the meeting, Johnson issued a statement requesting residents to attend. “The meeting on Thursday is very important,” he said, “and I’d like to reach out to a lot of people that live on River Road and in that area, and everybody in Westover because we are being impacted by the trucks here in Westover. Not only do the people of River Road have to come through Westover and deal with that truck traffic as well, so they can just jump on the interstate.” “I think the important thing is to have a good showing and have people here to voice their opinions to the MPO, and the people at the MPO will listen. They’re open-minded. Several of us think this interchange is the best option we have to look at.”
Doctors and administrators gathered at WVU Medicine Children’s newest facility – a Neurodevelopmental Center on Baker’s Ridge Road – to celebrate its opening Thursday.
“It’s unbelievable,” Dr. Jodi Lindsey, center director, said of the 9,000 square foot space on Baker’s Ridge Road. Lindsey said there’s always been a need for this type of service in West Virginia and her dream, even before medical school, was to build a center like this. The center brings all levels of child neurodevelopmental disability treatment under one roof including diagnosis and evaluation, medical workup and treatment and therapy services she said.
Albert Wright,president and CEO of the West Virginia University Health System, said the center was designed for a very specific purpose – helping pediatric patients with neurodevelopmental disabilities. Those disabilities include Autism Spectrum Disorder, developmental delay, cerebral palsy, and Tourette Syndrome. The best treatment is “intensive and early behavioral intervention,” Nikki Shriver, an applied behavior analyst (ABA), said.
There are 10 individual rooms where ABA’s can work with their patients one-on-one and help build skills. Shriver said helping improve communication skills is a big focus because the ability to ask for what one wants and needs is important. The early part of “intensive and early” refers to the age patients start treatment. Shriver said the best time to work with kids is between the ages of 2 and 6 when their minds are still growing. She said anyone can learn, but the younger treatment starts the better. Intensive refers to the amount of time patients spend at the center. Some patients spend the equivalent of a school day in treatment – five days a week, Joseph Shane, ABA, said.
The goal of treatment is to prepare patients for the next environment they will be in and for most that means getting them ready for school he said. The center also has a large play area where kids can work on group skills such as sharing and taking turns, Shane said. Kids will also eat lunch in the play area during their treatment and lunch is another opportunity to work on skills. If treating patients is the primary goal, one that’s almost as important is training the next generation of care providers.
There are two assessment rooms used by pediatric psychologists connected by an observation room. Jenna Wallace, pediatric psychologist, said the observation space is about double the size of the previous space. Lindsey said she hopes that this center becomes a model used across the state where a team based approach is used in treatment.
A former medical office at 300 Wedgewood Drive will be undergoing renovations to upgrade its space and will also provide “aesthetic love,” according to David Lorenze, principal for Black Diamond Realty LLC. “Structurally, it is a very sound building — it just needs some TLC,” Lorenze said. He said the facility will begin renovations in the first quarter of 2019 to develop a more modern look.
The developer for the project is Glenmark Holding LLC. Lorenze said the building will be a versatile space that incorporates all types of businesses. The space offers more than 19,000 square feet, and the buyer is investing more than $1 million to redevelop the property. The funds for the renovations will allow the buyer to redesign the interior and exterior — permitting more creative liberty to make it a modern space, according to Lorenze.
In addition to the aesthetics of the building itself, new landscaping will be another priority and there are plans to put a playground in, as well. “We have multiple floor plans at this point — that the Mills Group has put together in conjunction with the buyer — that lay out a number of different scenarios,” Lorenze said. “The goal is to cater to all office-use types.”
Photo Caption: This submitted artist rendering shows the plans for 300 Wedgewood Drive, a former medical office that is getting 1 million in renovations. (Artist Submitted Rendering)
Lorenze said his company is looking to market to child care facilities, medical facilities and other professional office uses. The building will provide a space to suit the needs of the user, as well as give more opportunity to a range of businesses. “There are thousands of rooftops within a one-mile radius, and the way the property lays from it being all single-story, it just seems like a natural fit,” Lorenze said. “As Morgantown continues to grow, taking older facilities like this that served a purpose for many years and served the community, there is a point and time where it needs money injected into it to repurpose it, to further serve the market and growth in Morgantown.”
Black Diamond Realty LLC’s role is to sell the property to the developer, then work with the developer to market and lease to businesses in the Suncrest area. “Suncrest as a whole is in high-demand, it has a lot of major employers,” Lorenze said. “Being in the Suncrest area is attractive for many folks, and our goal is to target businesses that want an affordable location outside of city limits.”
For more information about this property, contact Black Diamond Realty at 304-413-4350.
Monongalia, Preston enjoy hotel occupancy spike that beats even state’s solid year
As West Virginia tourism officials celebrate increases in hotel occupancy, the numbers in Monongalia and Preston counties outpace even the state’s rise. Gov. Jim Justice recently touted a 16.1 percent increase in statewide hotel occupancy comparing June 2018 to June 2017. The local area has enjoyed a 17.9 percent hike in that same comparison, said Susan Riddle, executive director of the Greater Morgantown Convention and Visitors Bureau.
“We put a pedal to the metal since the beginning of last year, and we haven’t looked back,” Riddle said, adding that she can look at any month and see an upward trend in bookings. Justice also said there was a 20 percent revenue increase in a year-over-year comparison to June 2017. In Mon and Preston, revenue was up 20.2 percent June over June. Every region of the state has seen increases, Justice said, with the first two quarters of 2018 showing hotel occupancy up 11.7 percent, with revenue growth of 14.9 percent.
“One of my first decisions in office was to launch a new tourism campaign that would spread that message like never before,” Justice said July 25. “West Virginians should be proud of what we’ve done here, because it takes all of us, telling our story and rolling out the welcome mat, to make this happen.”
“From day one, the governor had a vision for what could happen with West Virginia tourism,” said state Tourism Commissioner Chelsea Ruby. “The success we’ve seen this year is a direct result of that vision and the governor’s commitment to growing our tourism industry. Tourism means jobs, and the numbers that the governor released today translate into more West Virginians working in a sector that still has enormous room to expand.”
STR, a global hotel research company, reported the statewide hotel occupancy rates. In Mon and Preston counties, there has been a significant increase since January 2017. Riddle said that means jumps in all categories from occupancy to revenue to demand. Mon and Preston have 28 lodging properties combined, resulting in 2,600 rooms available daily. Filling up those rooms with travelers generates sales tax dollars.
“We target everything we do. Our mission is one more night, one more dollar. It’s as simple as that. We don’t need to make it any more complicated,” Riddle said. “For every $100, CVB receives $3. It’s not just about people spending the night to go ahead and generate lodging tax, it’s what are they doing while they’re here.”
That entails looking at the four types of tourists Riddle claims frequent this area:
Adventurers and explorers (the largest group),
attendees,
planners
and relaxers.
“For us, our big draw, we have a synergy that is the combination of a lot of different benefits,” Riddle said. “We sell our region. We connect our local area with our audience.”
The warmer months are filled with heavy commercial real estate activity. Prospects are looking for market opportunities and deals are getting done at a rapid clip.
On the personal front, summer is also filled with travel, family time and fun adventures. Click on the button below to see a sneak peak of what our team has been up to this summer.
Mark Nesselroad: Mark J. Nesselroad: “Mark and his family are holding onto summer as long as they can. Some of their favorite parts include spending time outdoors, enjoying extra garden vegetables from Mark’s father’s garden, family birthdays, and splashing at the pool. Mark and his son enjoyed WVU baseball’s unique father/son camp at which they camped overnight in a tent at Monongalia County Ballpark. His family also adopted a new family member – a 1.5 year old black and tan coonhound named Lucy!
David Lorenze: Armed with a small computer in his pocket, David was able to enjoy several trips while staying on top of deal activity. David enjoyed a relaxing trip to Sandbridge, VA with his in-laws, explored the growing area of North Myrtle Beach with his parents, sister and three small kids, plus adored some quality time with his wife while attending a wedding in Las Vegas. David’s favorite memory from the summer was seeing his two young daughters work together to capture sand crabs. Their expressions were priceless!
Murphy Holloway: Murphy has made great progress towards earning his CCIM designation. In June he attend the User Decision Analysis for Commercial Investment Real Estate course in Denver, Colorado and just got back from Dallas, Texas for the Investment Analysis for Commercial Investment Real Estate course. He has completed all of the required courses and is excited to take the final cumulative test to earn his designation. Murphy is deeply rooted in Wheeling, WV and has enjoyed multiple trips “back home” to visit with family and friends.
Jeff Stenger: While Jeff’s primary focus this summer was establishing and maintaining client relations at Black Diamond Realty, he was able to get away for a long weekend at a cabin with friends at Deep Creek Lake. Jeff is looking forward to seeing his sister and her family in Charlotte, NC next month when WVU plays Tennessee at the Belk College Kickoff Classic.
Janelle Zeoli: As a native of eastern Pennsylvania, Janelle made the decision, along with her husband, to move back to their hometown in Morgantown, PA. It was a tough decision but they have deep roots in this area. They hope to soon find their permanent location and purchase their first home. In her free time, Janelle enjoys creative crafts and spending time with her husband and their German Shepherd dog, family and friends. She looks forward to making the trip out to West Virginia each month to reconnect with the Black Diamond team.
At Black Diamond, we work hard to maintain a positive and healthy work-life balance. Our substantial growth over the past two years can be credited to our team approach and family atmosphere. In an effort to continue providing top-shelf, quality performance/results to our clients, Black Diamond recently expanded its human capital with the additions of Chris Waters and Jeff Wise. They both bring diverse, extensive and credible experience to our team.
In addition to North Central WV (Bridgeport/Clarksburg to Morgantown), our expanded, strong team of 7 allows Black Diamond to broaden its focus to other areas of our great state and throughout southwestern PA. We look forward to becoming more heavily involved in the Uniontown, Waynesburg, Washington, and Wheeling market areas. Black Diamond is a chamber of commerce member of the three counties that collectively constitute its “back yard,” and we look forward to being more heavily involved in additional communities.
From our family to yours, we wish you a summer filled with many more great memories. Cheers to exciting times that lie ahead!
After 30 years of inactivity, the site of the old Owens-Illinois glass factory is finally seeing new development, as a Morgantown developer has committed to reinvigorating what’s now being called the Speedway Business Park.
In 2015, Merit Development, LLC purchased the land in east Fairmont with hopes to capitalize on the growing economic status of North Central West Virginia, according to Merit Development President Tom Laurita.
“With the growth of Morgantown and the Bridgeport/Clarksburg area, we felt that Fairmont has become sort of a sweet spot and is in a position to experience growth in the near future,” Laurita said.
In the years since the purchase of the property, Laurita and Merit Development Asset Manager Russell Bolyard said that plenty of behind-the-scenes work has been underway, despite development itself not starting until June 1 of this year.
“We’re really still in the early preliminary stages of development,” Bolyard said. “We’re moving the earth. There was a lot of prep work since 2015 that went into the permitting and the cleanup of the site to prepare it for constriction … All of that work had to be done in order to start the earth work…
“It was a good bit of work. There was testing and the studying of the area, and then the development of the cleanup plan and the cleanup. It took about two years. We got our final completion report in late January of this year,” he said.
In addition, Fairmont City Planner Sandra Scaffidi said Merit has been doing some heavy work to make sure that, once completed, the park won’t be affected by heavy rainfall or flooding.
“They’ve been working with FEMA to change the flood-way there to create more developable land,” Scaffidi said. “There’s a channel that runs right through the property, Originally, it was wide and shallow, so now they’re making it narrower and deeper. It’ll retain the same amount of water, but create more developable land.”
Bolyard said that Merit is about 25 or 30 percent finished with the earth-moving, with hopes to be fully completed with this phase of development by the end of autumn.
The development, Bolyard said, would be a huge boom to the area, bringing in businesses, jobs and hope to Fairmont.
“The area is zoned industrial right now, and so it a commercial aspect to that and light industrial work could be done there,” Bolyard said. “We hope to attract business that will improve that area. We’re hoping to provide more jobs and be an asset to Fairmont.”
Scaffidi agreed, and said that the park, once completed, could change the face of the east side for the better.
“Aside from bringing quality jobs into our area and increasing our tax base, they are reusing a piece of land that was considered a Brownfields site,” Scaffidi said. “We can’t make new land in Fairmont, so we have to reuse what we have. I think they are creating a whole new energy on east side, putting new businesses there and encouraging new development.”
Earlier in July, Bolyard and Laurita attended a Fairmont City Council meeting, hoping the city would go along with their plan to name the park’s future roads Glass Avenue, Bottle Works Avenue and Progress Street, each named in dedication to the work done at the site before Merit’s involvement. The council unanimously passed the ordinance to name the streets.
“The actual naming is a play on the historical significance of the site with the Owens-Illinois glass factory,” Laurita said. “It was a major employer at one time, and there’s a lot of history in glass-making on that site, so we saw the history and decided to continue that and make sure people remember what was there and how great it once was. Hopefully, we can bring it back.”
Bolyard shared his sentiment, and said that with the new park, they hope to bring the site back to its former glory.
“It was a productive area at one time,” Bolyard said. “Over 1,000 people were employed there. We actually named one of the streets that will go in there ‘Progress Avenue.’We’re working with the city to bring that area back into a progressive state. It was dormant for over 30 years. We hope people tolerate us while we’re here doing the work so we can bring it back into a progressive state.”
While the park is still a long way from completion, work is being done every day, and Laurita said that soon Fairmont will be treated to a high quality, well-maintained business park.
“I hope it becomes a fully developed, vibrant community business park — a place where Fairmont residents can have a place to work and hopefully shop and whatever they need to do in the area. We can create a vibrant community once again on the east side.”
At Black Diamond Realty, one of our goals is to educate our clients and help them build wealth over time via real estate investments and holdings.
Tremendous perks exist in real estate that are not available through investing in stocks, bonds or other investments. One of those major perks is a 1031 tax exchange. A 1031 tax exchange can be described as a real estate transaction without immediate tax implications to the seller.
It is important for you to understand your tax bracket and effective tax when completing a 1031 transaction. You do not simply sell an asset and walk away with the net amount on the closing statement. Your transaction is, most likely, subject to capital gains and depreciation recapture. We recommend all clients consult their accountant to better understand the ins and outs of their tax liability associated with any contemplated transaction. With that disclosure in mind, consider how a seller’s capital gains tax liability is one wealth building tool permitted by the federal government.
In a traditional transaction, the seller is subject to capital gains and depreciation recapture. This article is only focusing on capital gains. A capital gains tax is defined as a tax on the increase in the value of an investment. Short-term capital gains are characterized as gains from a sale in which an asset was owned for less than one year. Short-term capital gains are taxed according to your income tax bracket (seven total tax brackets in 2018). Long-term capital gains are classified as monetary gains in which an asset was owned for more than one year.
For single filers, the capital gains tax rate ranges from 10% to 37% for short-term capital gains versus 0% to 20% for long-term capital gains. Check out the charts (single versus joint filing) to get a better understanding of your potential capital gains tax obligation if you sell real estate. In addition to the capital gains tax outlined in the chart, high earning individuals (making $200,000+ filing individually or $250,000 filing jointly) are subject to an additional 3.8% tax which the government calls the “net investment income tax”.
So, you may be saying, “I get the tax percentages and know where I fall, but how do the numbers look in a real-world example? And, is there any way I can defer these taxes?”
Let’s take a look at an example. You are successful entrepreneur who found an office building for $500,000. Over the years, the asset increased in value as the economy grew and the market improved. Seven to eight years (average hold on a commercial asset) after your initial purchase, you agree to sell the asset for $1,000,000. In this example, you are facing a capital gain of $500,000. (The basic formula for calculating your capital gain is to take the basis sale price minus the property’s basis (purchase price +/- depreciation, amortization, improvements and selling expenses). The net amount is your capital gain.)
Review the chart above to see what your tax liability would be. We will assume the top capital gains tax rate of 20% plus the 3.8% (net investment income tax). In this example, your federal capital gains tax would be a total of 23.8% which is $119,000. That’s right… $119,000! So, your gain goes from $500,000 down to $381,000. This sounds like a lot of money but your accountant will remind you that is not the money you get to keep. Your accountant will need to give you the calculation for the depreciation recapture you owe. The term is exactly as it sounds… You need to recapture the “paper write-offs” you have been taking over the years, via “depreciation” tax reductions and repay them. Whew, are we done? Not yet. You also need to remember state taxes will apply. Having a trusted real estate accountant is a must when investing in real estate.
You may have been thinking this entire article was slated for doom and gloom. But, what if there were a way you could defer those taxes and continue building your portfolio, tax deferred? Section 1031 of the federal government’s tax code permits a seller to complete a like-kind exchange (real estate asset to real estate asset) in which a replacement property is purchased within 180 days. Completing a 1031 like-kind exchange, often referred to as “1031” or “like-kind exchange,” allows you to roll all of the proceeds of your sale into a “like-kind” asset.
In the sale example used above, a 1031 exchange would allow you to roll the $500,000 into another asset without paying the $119,000 in capital gains tax. Over time, this strategy could allow you to “scale up” into larger assets public, in broad strokes, on the subjects of capital gains tax and 1031 exchanges that produce greater cash flow and potentially greater returns. Completing a 1031 transaction requires the participation of a real estate attorney who specializes in that process.
Please remember to consult your accountant and real estate attorney to better understand your personal options.
The second demand driver is natural gas fired power plants. Coal provides about one third of the United States’ electricity. Tides are turning with an abundance of gas available within the Marcellus and Utica Shale plays. On November 1, 2018, Sara Welch of Shale Gas Reporter, wrote an outstanding article (
