Tire firm buying Dana building

Plaza Tire Inc. was the high bidder in an auction Thursday for Dana Corp.'s vacated Cape Girardeau manufacturing plant.

Scott Rhodes, vice president of the 44-year-old company, said it plans to consolidate the distribution and headquarters functions for its 49 stores in the 150,000-square-foot building at 2075 Corporate Circle.

The Plaza Tire bid edged out an offer from Schaefer's Electrical Enclosures of Advance, Mo., which had strong support from city and economic development leaders.

Plaza Tire reportedly bid $3.25 million for the building. In documents submitted earlier this month to the Cape Girardeau City Council as part of a request for help financing the building, Schaefer's Electrical said it had a deal set with Dana to pay $2.85 million.

The city put its plans to approve a $5 million revenue bond issue on hold after learning that Plaza Tire was continuing to pursue the property, Mayor Jay Knudtson said.

"It was time for the city to step back and remove itself officially from the process until the bankruptcy court acted," Knudtson said.

Dana Corp. moved production from the Cape Girardeau plant to Mexico after seeking protection from the federal bankruptcy court in New York. The court has approved a reorganization plan for Dana that will pay unsecured creditors between 72 and 86 cents for every dollar of the $3 billion they are owed. The sale Thursday was part of the attempt to maximize those payments.

Purchasing the Dana property is an opportunity to continue growing while keeping an important part of the Plaza Tire business in Cape Girardeau, Rhodes said. The company has about 100 employees in Cape Girardeau, and the move to the Dana building will consolidate two locations currently used for distribution and headquarters. About 70 employees will be stationed at the Dana building.

The company is not seeking, nor does it plan to seek, any public help in completing the purchase, Rhodes said.

"It is a huge, exciting opportunity for the company, and we are glad to make Cape our home for many more years," Rhodes said. "We had considered other places for our distribution center, and this is a great opportunity."

Plaza Tire was founded in 1963 by Vernon "Pee Wee" Rhodes as the Plaza Car Wash. The company moved into the tire distribution business within a few years. Today Plaza Tire has 49 stores and is rated as the 28th largest independently owned tire retailer in the United States, according to Tire Business magazine.

The deal for Schaefer's Electrical would have moved its production and office functions to Cape Girardeau from Advance. The company planned to add about 40 employees to its work force of about 100 by April.

The company will now consider other options and has already fielded offers from other area cities to relocate, president Mark Diamond said. The rapid move to Cape Girardeau was part of an effort to keep up with growing orders for its products.

"We are going to have a hard time keeping up, but we will roll with it," Diamond said.

While Diamond said "our head is reeling a little bit," he added that the company will continue to pursue its growth plan. "We will just do it in smaller steps rather than in one big step," he said.

rkeller@semissourian.com

335-6611, extension 126