EAST CHICAGO — The rise and fall of the steel and manufacturing industries over the last century has given way to countless abandoned industrial buildings scattered throughout the Region.
That local inventory of existing, usable space is part of what makes Lake County’s industrial core so highly sought after, according to Karen Lauerman, president and CEO of Lake County Economic Alliance.
“We do not look at vacant buildings or sites in need of remediation as challenges. More so, we look at them as potential developments for job creation and investment, ultimately increasing the assessed value of the location,” she said.
Lauerman said the LCEA — a countywide economic development group — builds leads for companies interested in Northwest Indiana and tries to connect them with land or facilities that meet their needs.
They are actively marketing several buildings that recently went up for sale or lease, including the old Lucky Straw factory, a 60,000-square-foot facility at 405 E. 151st St. in East Chicago. The straw manufacturing company went out of business and now the facility is ripe for retrofitting.
“There’s a lot of interest in the industrial core that’s in a revitalization as more people look to repurpose aged industrial facilities into modern manufacturing plants,” Lauerman said.
The Clearwater Resources Warehouse, 240 Waite St. in Gary, is also on the market, listed for $4.1 million, records show. The owner invested more than $1 million in improvements into the 1948 building that boasts 112,623 manufacturing square feet, to make it more attractive to investors.
Lauerman said the legacy of the county’s industrial core is being preserved by LCEA, developers, consultants, companies and real estate professionals who have the vision to see the potential reuse “for an evolving diversifying economy.”
The Times spoke with three business owners who took risks on diamonds in the Region rough, keen on seeing the local economy revitalized by new manufacturing jobs or businesses willing to evolve and embrace new technology to meet consumers’ growing needs.
Here are their stories.
‘I was nuts’
When Tri-State Industries owner Don Keller first bought the old Hammond bus barn on Columbia Avenue, it was in horrible shape and all the copper wiring had been stripped out and stolen.
“A lot people thought I was nuts when I bought it, saying, ‘You’ve got to be kidding,” he said.
Buying vacant land and building anew would have cost as much as $3 million in upfront costs alone.
Ultimately, it was that thrifty $1 million rehab investment in 2002 that has allowed Keller not only to keep his business going strong in the Region decades later but to expand into the business of manufacturing robot and automation systems.
Keller started a spin-off company — Tri-State Automation — five years ago. The customized robot shop is housed in a 14,000-square-foot building at 710 Michigan St.
He said he anticipates that side of the business will be far more in demand than its parent company, Tri-State Industries, which makes metal-fabricated products and assembles mechanical systems, in the next decade thanks to the growing number of manufacturers turning to robotics to remain competitive.
Keller said his biggest customer remains Union Tank, which once operated in East Chicago and still has manufacturing plants in Alexandria, Louisiana, and Sheldon, Texas.
Tri-State Industries and Automation has about 70 employees between the two sites, and continues to thrive, making $12 to $15 million sales annually.
Even though the majority of his customers are out of state, and he’s running out of room at his Columbia Avenue location, Keller said he has no intentions of leaving Hammond.
“I don’t think there’s a better place to be right now than Northwest Indiana whether you’re talking commercial, residential or industrial because of all the problems they have in Illinois with the tax base, the unemployment, the cost for unemployment insurance. Their worker’s comp is out of control,” he said.
William Marsh, owner of American Bar, said it was a huge risk moving his Pennsylvania company from the East Coast to the Midwest in 2015. But at the time, it was his only option outside of folding.
“I’ve seen the ups and downs of this industry and I’m a big believer in American manufacturing. The sad thing is the East Coast manufacturing industry is dying. It used to be a manufacturing powerhouse, but the regulations there are unfavorable,” he said.
His company, American Bar, produces cold-finished steel for military, medical agriculture and general machining equipment, he said.
Marsh said he purchased a 30-acre lot on Michigan Avenue near Euclid for $2.8 million and invested an equal amount in the main building to outfit it for his company’s needs.
With the city’s smokestacks and refineries as the backdrop, the business owner last year planted a vegetable garden, about 45 fruit trees, and built a fenced-in area for chickens to roam free on his property in an unorthodox, eyebrow-raising fashion.
“This place, the location the great. The bones were great. It was a challenging process but it’s been a good home for us and Indiana is a good state to work in,” he said.
Marsh met on Friday with Don Koliboski, vice president of economic development at LCEA, and his local city councilman, Robert Garcia. There, they went over Marsh’s plans to build 500,000 square feet of new structures on site with the hope that there’s interest for more manufacturing to relocate there.
“It’s speculative investment on my part,” Marsh said.
Marsh said he envisions a manufacturing revitalization in the city, to get families living in the nearby economically depressed neighborhoods back to work.
“Something’s wrong with this. We as Americans, we have to make it right,” he said.
‘The American dream’
When Anthony Traicoff was laid off from his plant manager job at The Steel Company Group in Chicago after the company filed for bankruptcy in 1999, he said he was determined to rebuild it from the ground up.
“Years ago, we were told our situation was the American dream, literally. We didn’t have any money but had determination and desire and vision and had a lot of people willing to work with us and we still do,” Traicoff said.
With two Midwest locations in Chicago and East Chicago, The Steel Company Group was making about $30 million annually in gross sales, employed about 120 workers and serviced 130 customers, he said. But then the steel industry took a nosedive, prices fell dramatically overnight and, just like that, it was over, he said.
Traicoff said he and the East Chicago plant manager, Subramanian “Subs” Visvanathan became partners and created a company by the name of Indiana Strip Steel.
He said he and “Subs” had to work fast to get everything back up and running and product moving out the doors quickly — or risk losing customers.
With only $300 between the both of them, building new was out of the question — nor was it ideal when they had a perfectly decent building at 4809 Tod Ave., vacated after the bankruptcy, he said.
“National City Bank, they gave us a $100,000 line of credit. We found 2 people … working in industrial real estate, had dinner with them and talked them into purchasing the East Chicago facility and leasing it to us with option to purchase,” Traicoff said.
Traicoff said they purchased the property from the original owners in 2005 and poured about $7 million into the 240,000-square-foot facility on roof, light and concrete repairs. Another $3 to 4 million went to purchasing equipment.
“It’s real easy to throw money at things. It’s a lot harder to (be) frugal to a degree,” he said.
Building a new facility from the ground up would have easily cost close to $20 million, he said.
Back then, Traicoff said there were no tax abatements from the city.
“Anyone that wants to do this, they need heart. They need vision. If they’re only doing it for the investment, I think it makes it more difficult. For ‘Subs’ and I, we saw it as a way to create the jobs, and to bring those employees back,” he said.
“Anyone looking to do something with an existing facility needs to have self-discipline because it’s a lot of work,” he said.
Today, Indiana Strip Steel and Trai-Cor Processing operates under one roof. ISS handles purchases of steel from the mills, turns around and ships that to Trai-Cor, which then processes it before ISS ships it to customers all over the country.
In total, they process between 60,000 to 100,000 tons of steel annually, he said.