For 110 years, Mead and Westvaco were rival paper companies whose business models depended on harvesting forestland.
But when they merged in 2002 to focus on packaging, the newly formed MeadWestvaco found itself with 1.1 million acres of land and a huge new line of business.
Now the land-rich Richmond-based packaging giant is flexing its development muscles.
MeadWestvaco is converting about 4,500 acres outside Charleston, S.C., into a massive mixed-use development dubbed Nexton. Last month, the company broke ground on the first big component of the development: A 100,000-square-foot office building that will serve as the headquarters of the company’s development division.
It’s also developing parts of a 72,000-acre tract called East Edisto 30 minutes east of Charleston.
MeadWestvaco’s Community Development and Land Management Group is a small but growing piece of the multibillion-dollar company, armed with almost 700,000 acres mostly across the Southeast.
Based in Summerville, S.C., the division raked in $193 million last year, up from $161 million in 2011, all from the sale of land, according to its financial filings. MWV brought in more than $6 billion in revenue last year company-wide.
“We have sort of a unique business model in that our rural recreational land sales fund our development activities,” said Ken Seeger, head of development for MWV.
About 130,000 acres of the land are in southern and western Virginia. Last year, the division sold 48,600 acres of land.
Seeger declined to comment on what the company is spending on the Nexton development, but MeadWestvaco will be in charge of laying the infrastructure and improvements for the massive project.
It is teaming with other developers on a 320-unit apartment project and a 98-room Marriott hotel on the site, which is about 40 minutes northwest of Charleston. The apartment developer is the Charleston-based Beach Company.
The development, almost four times larger than the Innsbrook office park, will take about 25 years to complete, Seeger said. The land is zoned for more than 13,000 townhouses and single-family homes. Seeger said he expects to start delivering plots to home builders next year.
“It’s very well located, right in the path of growth from Charleston,” Seeger said.
Among MeadWestvaco’s other real estate holdings are 10 business and industrial parks it has developed. That includes a 1.1 million-square-foot distribution center developed for tire distributor TBC Corporation in 2009.
Although it owns a lot of land in Virginia, Seeger said the company’s development activities would continue to be focused in the Charleston area.
Distribution centers and big companies such as Boeing have been driving the demand for real estate development in the area, he said.
“It’s not a major market, but it’s a very popular second-tier market, and it’s growing,” he said.