Owners seek new use for Bi-Lo site

Owners seek new use for Bi-Lo site

July 28th, 2012 by Mike Pare in Business Around the Region

George Stokes trims the bushes at the former Bi-Lo office and warehouse facility on Shallowford Road. A&D II recently purchased the building and plans to redevelop the site and look for a tenant.

Photo by John Rawlston /Times Free Press.

A new owner of the biggest grocery distribution center in the Chattanooga area, which has sat empty for the last five years, says it offers potential to hold "a lot of jobs and a lot of revenue."

With 20 acres, 328,000 square feet of warehouse and office space and 72 truck docks, the former Bi-Lo distribution facility on Shallowford Road has "unreal possibilities," said local businessman Steve Dillard, who bought the parcel with partner Larry Armour.

The investors bought the center, along with an 11-acre tract with another 172,000 square feet of space on nearby Polymer Drive, for $5.2 million earlier this month,

"It's a center point in the city," Armour said about the former Bi-Lo facility that sits just off Highway 153, adding it's close to Chattanooga Airport and Interstate 75.

The partners said they foresee any type of logistics or distribution use. An automotive supplier to Volkswagen's assembly plant a few miles away could make sense, they said.

Armour said they'll look for a single user, but the property may have to handle several businesses.

Rice Williams of Chattanooga architectural firm Artech said he plans to take a look at the structural components in the ex-Bi-Lo facility. From that point, he and the new owners will determine how much work to put into the site, he said.

Bi-Lo's warehouse operation supplied its grocery stores in the Chattanooga area until is was shuttered in June 2007 and about 173 jobs were cut. Keene, N.H.-based C&S Wholesale Services was running the facility then, according to past reports.

Bi-Lo, which now operates 31 stores in the Chattanooga region and is its largest grocer, since has been served by distribution facilities in other cities.

Tom Kale, president of Commercial Associates, said the parcels originally had been part of Red Food Stores, which was acquired in 1994 by Dutch grocery giant Royal Ahold.

Ahold USA sold the site. He said the sale involved a complicated transaction that included Ahold and Phillip Morris Capital.

Kale said earlier sub-leases had been signed on the 2213 Polymer Drive location with UPS and Lifetouch. According to Armour and Dillard, the owner of Tranco Logistics is a partner in that property and has leased the truck facility there.

Armour, who is involved in commercial real estate, and Dillard, president of Dillard Construction Inc., earlier had teamed in the redevelopment of the 401 Building in downtown Chattanooga and other projects.