From Deseret News archives:
Judge approves sale of Geneva Steel land
Last week, Anderson Development LLC came away as the highest bidder in an auction for the Vineyard-based industrial site. The Sandy developer beat out a bid of $46.6 million by Utah Lake LLC, which had the financial backing of New Jersey-based Prudential Real Estate Investors.
Michael Hutchings, an attorney for Anderson Development, said the property eventually will be developed in smaller sections encompassing industrial, commercial, office and residential uses, with proposals to develop high-speed commuter rail tracks to run in the middle of Geneva's property.
Anderson Development, co-owned by Gerald D. Anderson and Hutchings, specializes in master planning and zoning of property for development. The Geneva transaction, Hutchings said, represented the company's biggest land transaction.
Before development can occur, the industrial site must be undergo an extensive environmental clean-up. U.S. Steel is responsible to pay 75 percent of Geneva's estimated $42 million clean-up costs. The remaining 25 percent, estimated at roughly $10 million, will be paid by Anderson Development. The clean-up, Hutchings said, will take three to four years to complete.
Demolition and equipment removal is ongoing. In 2004, a Chinese firm purchased Geneva's core steelmaking equipment for $40 million. All the equipment, Hutchings said, should be removed at some point in 2006.
"We are just very excited about this property," Hutchings said. "Utah County is the second-fastest-growing county in Utah. There's a scarcity of property in Utah County and we see a magnificent opportunity here. We've got three freeway off-ramps that will be servicing the area. That's a big advantage also."
Anderson must close on the deal by Dec. 27. Connecticut-based Contrarian Capital will provide debt financing for one-half of the $46.8 million deal. An unnamed Utah investor will provide the equity financing for the remaining half.
"This represents for us a culmination of over two years for trying to assemble this property," Hutchings said. "We've never chased a project like we have here for two years. We're paying what we regard to be a top-dollar price for this property."
According to the sales agreement, if Anderson Development fails to close on the deal, Utah Lake LLC will be allowed to purchase the property at $46.6 million, the next highest bid.
The sale of Geneva's land is expected to help pay off its unsecured creditors, who are owed roughly $75 million. Unsecured creditors will capture 50 percent or more of what they are owed, according to James Markus, Geneva Steel's Chapter 11 trustee.
J. Thomas Beckett, an attorney for the unsecured creditors committee, said last week he was very pleased with the sale. Beckett added that recovering 50 percent of what they are owed was "pretty extraordinary" for a steel company liquidation.
E-mail: danderton@desnews.com
