Alpha Natural Resources reaffirms plans to build local headquarters

ABINGDON, Va. – Alpha Natural Resources, which became the nation’s third-largest coal company after a recent merger, has reaffirmed its Southwest Virginia roots: It will build its new $21 million headquarters on a site in Bristol, Va.

“We’ve been under pressure, really since day one, to be in more of a metropolitan area,” said Kevin Crutchfield, president of the company. “We’ve resisted that because we like being members of small communities where we can make a difference.”

The city is giving Alpha a 79.2-acre site, which will include all of Bristol’s new Sugar Hollow Business Complex, City Manager Bill Dennison said.

The project has drawn $4.4 million worth of incentives from the state, announced by the governor’s office Wednesday, and the Bristol City Council is holding a special-called meeting today to announce a local incentive package.

Bristol Virginia and Washington County, Va., were joined by localities in Maryland and Tennessee in making offers to the company, which needed a bigger office to accommodate its July merger with Maryland-based Foundation Coal.

In the end, the company narrowed the choice to two sites: one in Washington County and one in the city of Bristol.

While Crutchfield said Alpha is moving its headquarters over the city line “with some remorse,” it was a business decision that centered on the ability to build and
occupy the facility at least a year sooner on the Bristol site.

The incentives offered and the added cost of building on the Washington County site also tipped the scales toward Bristol, where the office is slated for completion in 2011 just a few miles from the company’s current headquarters in Abingdon.

According to the governor’s office announcement, the project will create 69 jobs and retain 131 jobs in Virginia.

Crutchfield said some of those jobs will be filled with relocations from Maryland, while others are being filled locally.

“It’s a red-letter day for the city, and it’s a great economic boost,” Dennison said, adding that locating Alpha’s corporate headquarters in Bristol will likely mean more business for stores, hotels and restaurants in the city.

Kenneth Reynolds, chairman of the Washington County Board of Supervisors, said while Alpha is moving to the city, “It’s not a complete loss to the county.”

As part of a deal made years ago when the city annexed the land containing the site, Reynolds said, the county will get 25 percent of the tax revenue the property generates. Washington County also will benefit as county residents continue to work at the company’s corporate headquarters and employees there continue to shop in the county.

“We’re just glad they’re staying in Southwest Virginia and not going to Maryland,” Reynolds said.

Abingdon Mayor Ed Morgan said he too is glad the company has chosen to remain in Southwest Virginia.

“We view them as a great regional asset with a tremendous amount of community loyalty and spirit,” Morgan said.

“We regret that the town of Abingdon will no longer have bragging rights to the title of ‘Home of Alpha Natural Resources,’ but we are confident that many Alpha
executives and employees will continue to proudly call Abingdon their home.”

The county also has another interest in the deal: The board of supervisors is considering a purchase of Alpha’s current building for county government office space – an option they’ve discussed in several closed meetings.

Reynolds said other options for office space, including building new and renovating the soon-to-be-vacated Johnson Memorial Hospital – are still on the table, but the hospital option is on hold.

“In the next 30 to 60 days we’ll probably come to agreement one way or the other,” Reynolds said of the building that Alpha now occupies. He would not comment on the details.

Even so, the building, which Crutchfield said cost $8 million when it was built in 2005, would likely cost the county much less than the $20 million estimated price tag of a new county office building.

Figures are not yet available on the cost of using the hospital, which is larger than Alpha’s building and would require extensive renovation.

Crutchfield said no one imagined at the company’s founding in 2002 that an $8 million building – let alone a $21 million building – would be needed to accommodate its growth.

“We started in … a 4,500-square-foot building on Main Street across from the police department,” he said. “We thought that was going to be our headquarters forever.”

The current headquarters, when built in 2005, seemed so big they’d never be able to fill it, Crutchfield said, but by 2007 Alpha was considering expansion.

“No sooner had we gotten a view on how that ought to look than we announced the merger with Foundation … and pretty soon we were just out of room,” he said, noting that Alpha employees are scattered in four additional buildings around town.

Alpha’s new, five-story, 100,000-square-foot building will leave more room for future growth, he said.

Like Alpha’s executive chairman, Mike Quillen, Crutchfield attributes the company’s phenomenal growth over the past seven years to “luck and timing.”

And while this homegrown Southwest Virginia corporation now employs 6,200 people in five states, Crutchfield said, it still values its location in Southwest Virginia, close to the mines and the workers who have built its success.

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