Alpha Breaks Ground

03 Sep 2010

Alpha Breaks Ground

BRISTOL, Va. – From drawing board to Tuesday’s groundbreaking, Alpha Natural Resources’ new $21 million corporate headquarters already has grown by more than 20 percent.

It has been that kind of meteoric rise for the nation’s third-largest coal company, which formed just eight years ago.

On a bluff overlooking Sugar Hollow Park on Tuesday, state and local officials joined about 200 company employees to celebrate the start of site work for the 130,000-square-foot, five-story building. Alpha CEO Kevin Crutchfield recounted some of that growth during the ceremony.

“When [Alpha Chairman] Mike Quillen got a gleam in his eye back in 2002 about something called Alpha, it was in a little office on Main Street in Gate City, Va.,” Crutchfield said. “When it became apparent this [Alpha] was going to go forward, he really upgraded and got a small office on Main Street in Abingdon – 4,500 square feet.

“We really thought at the time that office was all we were going to need. … But after a few more acquisitions, we were spread all over town and it was clear that wasn’t going to be enough. When we moved into our current 46,000-square-foot building, we really thought that would hold us for a good, long while.”

The company, which now employs about 6,400, outgrew its present Abingdon headquarters after a 2009 merger with Foundation Coal of Baltimore, Md. Employees are again working at five different locations around town.

The merger touched off an intense recruiting battle eventually won by the city, which beat out Washington County, Va., and prospective suitors from Maryland and Tennessee.

Originally conceived as 80,000 square feet, the building plans quickly expanded to 100,000 and then the current level – something not all company officials knew about Tuesday.

The facility is expected to be completed in about 18 months and employ more than 200.

“Part of the reason it grew a little bit was many of the Baltimore people began making the transition much earlier than we thought they might, so we’ve had an influx, which necessitated more space. Rather than add onto the building in three or four years, we decided to bite the bullet now and create a building we can grow into over time. I hope it will be sufficient for the foreseeable future,” Crutchfield said later.

About 40 former employees of the Maryland company have already moved to the region, he said.

Lt. Gov. Bill Bolling, who attended the ceremony, said he was initially concerned the merger might mean another state could lure Alpha away.

“We think you made the right decision – not just to remain in Virginia – but to remain in Southwest Virginia. This is your home,” Bolling said.

Crutchfield said the company weighed a number of potential incentives and tax breaks before accepting the city’s offer – free land and a $7.4 million package of financial incentives from the Governor’s Opportunity Fund, the Virginia Tobacco Indemnification and Community Revitalization Commission, the city and Bristol Virginia Utilities.

“We mulled our way through that [offers] from a financial perspective. But in the end, I think we tested our hearts on where we thought it made sense to be,” Crutchfield said. “I guess somebody could have thrown a deal at you, where you had no choice. But the city made it easy to stay in the area with the financial incentives package. And it felt like the right thing to do, for us. We love this area and we like to be able to contribute to our communities.”

While Washington County will experience diminished revenues once the move is complete, Board of Supervisors Chairwoman Dulcie Mumpower said they’re not upset.

“It’s a good day for the region,” Mumpower said. “I’m happy Southwest Virginia beat out Maryland and those other places and those jobs are remaining here.”

Commercial developer Steve Johnson, who built the company’s current headquarters and is handling the new one, also praised the project.

“This will give them the flexibility they need and room for growth,” Johnson said. “They’ve only been in their present space for about five years, but getting this land from the city gives them room – if they need to expand later.”

Johnson’s company will develop the project and sell it to Alpha on a long-term lease. BurWil Construction, of Bristol, Tenn., will be the building contractor.

Long-term growth and economic vitality – in the face of mounting pressure on the coal industry – were also on the minds Tuesday of state lawmakers.

“Alpha is leading the way to make Virginia the East Coast energy leader,” Bolling said. “We believe there is a great place for energy in the future for Virginia. We want to do more to develop the coal industry, more to develop nuclear power and to safely and responsibly develop our offshore energy resources.”

Legislators are concerned whether coal can remain a viable energy source well into the future, state Sen. William Wampler, R-Bristol, said.

“The Southwest delegation remains committed to people whose livelihood is dependent upon coal and we will work vigorously to beat back all efforts to effectively shut down this industry through direct or indirect extreme regulatory policies or laws. The Southwest delegation will never waiver,” Wampler said.

Crutchfield acknowledged that the industry faces a mounting number of challenges.

“But the fact remains 50 percent of [U.S.] electricity comes from coal and nothing can be done overnight to change that,” he said. “Now long term, that may be a different story.”