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Jefferson County business park grows by building relationships

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Photo courtesy of RAI Properties Photo courtesy of RAI Properties
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It’s not that Jim Ruland and his business partners aren’t looking to make money with their money.

But the investment group behind RAI Properties and Burr Plaza in Kearneysville, which is in Jefferson County, is smart enough to figure out that the success of the whole is defined by the success of its member parts. Simply put, if their tenants don’t flourish, neither will they.

“Jefferson County is, to a certain extent, a bedroom community for the larger Baltimore-Washington, D.C., megalopolis,” Ruland said. “We really do need to improve the economic base in the county. I’d just finished being county commissioner for six years and decided not to run again but I was acutely aware of our tax base — we were a growing county and unless we grew the jobs base we were never going be able to make ends meet without raising taxes to the point where nobody would like to see them.

“So, when I came off the county commission, I started an enterprise with a half-dozen folks, all of them from here or very nearby. We decided we would do this one, single initiative — establish a business park that would take care of the needs of businesses in this area, but in a sophisticated and modern way.”

Burr Plaza, their 19-acre business park, features seven buildings and 97,000-square feet of commercial, office and retail space, all of it equipped with what they like to refer to as “robust” communication capabilities: high-speed Internet and centralized data, voice, video and network resource management. The buildings were designed with security in mind — controlled access, ample outdoor lighting and security cameras throughout the property.

That had a lot to do with Ruland. Retired from the Navy after 22 years, he’d started an information services technology company, “so I knew what companies like mine would be looking for, and that Jefferson County was the closest county to the Washington, D.C., beltway and should be a natural magnet for businesses supporting (that).”

“We’re talking a dozen years ago, in 2003,” he added. “If you were trying to start a business here in Jefferson County that had any significant requirements for information technology infrastructure back then, good luck. We designed all of our spaces with the idea that voice, data and communications all needed to be centrally managed and distributed.

“All our buildings were wired to meet all the high-speed communications requirements businesses depend on; we thought we’d get more businesses here if the environment was better-suited. We went into the business of building spec buildings, but not for houses — for commercial customers. It was a ‘build it and they will come’ kind of thing.”

Building and filling the office and commercial spaces “went swimmingly,” Ruland said. “Then we were awarded the contract to build a building and lease it to the state for a regional DMV office. It became the anchor for the retail section we built.”

They finished construction in 2007, he said. Unfortunately, that was just about the time the world financial crisis hit and the economy tanked.

“We had 22,000-square feet of retail space surrounding the DMV that stayed empty until recently,” he said. “It’s only been the last year or so that it became easier to count the empty spaces than the full ones. It was a long haul.”

Ruland admits his company’s story isn’t for the faint of heart.

“We just recorded our first two profitable quarters since we started this operation 44 quarters ago,” he said. “So our members have had to answer a series of cash calls to keep the ship afloat, but now things are turning around and we’re sailing on a basis that’s sustainable to us.”

As a group, he said they weren’t interested in creating jobs and opportunity outside Jefferson County.

“We needed this kind of infrastructure here, close to home,” he said. “We’ve had great economic expansion here in Jefferson County, in terms of an increase in population, and land values, especially in the last decade, have been going up and up and up.”

Back when they started, he said a Jefferson County resident who had a business in western Virginia had asked for help in finding a good place to move his business.

“It turned out, the place that best-suited his business was inside the confines of the county-owned business park because the price of land in the area had gone up and up but the price in the business park stayed about same,” Ruland said. “Once it swung around so land outside the park was pricier than inside the park, it became something people paid attention to. He bought a lot, then we bought a couple that were left over ... we sort of backed into the whole situation.

“And here we are, a dozen years later, being honored by the Chamber of Commerce at their 55th annual banquet for assisting in economic development and improving the quality of life in Jefferson County.

“We’re thrilled, but we also know we have very little to do with it. Our business has changed from being primarily involved with construction, site planning, permitting and building of buildings into a property management company. We don’t have to build anything else, so now we’re managing property, and property management is really more about building relationships with people than anything else.”

Ruland said he’s not sure when it happened, “but somewhere along the line we realized we couldn’t be any more successful than our tenants were. If their individual businesses didn’t succeed, then we’d be running a revolving door with businesses going in and out, and the whole enterprise would get a reputation for not being a good place to go.”

He said RAI Properties shifted its focus to assisting tenants in any way possible.

“We’re the only development company that has an on-site property management office where people can call (around-the-clock) even if we’re not in the office,” he said. “They have a six-person staff, with someone manning the office about 12 hours a day. Even when they’re not in the office, he said if a tenant calls with a problem “somebody will come through the door and fix it.”

RAI also has on-site marketing assistance to help its tenants navigate complex county and state requirements.

“We provide all the services and give them all the help we can on a consistent, ongoing basis,” he said. “We tailor their leases to exactly fit the level of commitment people are ready to make: If they have a three-year contract with a federal agency, they don’t need a five-year lease, so we give them a three-year lease with an option to extend.

“And the construction methods we used mean our buildings don’t have interior load-bearing walls, so we can move things around down the road. We have interoperability, which means they can have their offices at one end and their operations at the other, and the same person can answer the phone for both places. If we were doing it for ourselves, this is the way we’d have designed it.”

Ruland said his business has been trying to cultivate this notion that it’s a family of folks at Burr Plaza.

“Some businesses have more in common than others, but we encourage all of them ... to be active participants in the community, to grow relationships,” he said.

He admits the company can be a little, well, unorthodox, like when it reduced rents because it found out their competitors were charging less.

“Last year when we started seeing signs of new economic activity, we did a market survey and saw that our rates were not as competitive as they could be,” he said. “During a period of inactivity a lot of our competitors had reduced their rates so we reduced ours. But we also went back to all of our existing tenants who were paying more and reduced their rates, too.

“Our tenants, people like WeightWatchers, a national chain, were speechless — they said they have 2,000 locations and that had never happened before. We didn’t want to be the guys charging people who were most loyal to them more than new people coming through the door.”

Ruland said the only way to do that was to lower everyone’s rates.

“Clearly, it was a little painful, but we’ve been rewarded by a practically 100 percent retention rate,” he said. “When I tell people, they understand it — we try to be fair-dealing and honest with open community. Together with our tenant-centric approach, it may be the thing that sets us apart.”

Ruland said he likes to think RAI has a reputation “for doing the right thing every time,” though that doesn’t mean they aren’t trying to make money. Far from it.

“You reach a point of no return, of keeping the ship afloat because if you don’t it would be disastrous,” he said. “I don’t think any of us thought at the onset that it would be our circumstances or we probably wouldn’t have done it, but things turn out the way they turn out. You have to play the cards you’re dealt.

“We did have a little turnover (within the partnership), but it was reasonably minor. We’re all still in it together. We’re all still friends; that’s the important part. We were friends before this started, friends and neighbors, and we still are. We go to each others’ wakes and weddings, we’ve watched each other’s children and grandchildren grow up. We have strong ties. To be sure, we’re profit motivated, but there’s more to it than that.”