SOS In The News

Ex-Steel land up for grabs
Favored bidder goes AWOL, loses "preferred" status.

Tuesday, April 06, 2004

BETHLEHEM -- For more than a year, Delaware Valley Real Estate Investment Fund has been claiming it was closing the deal on Bethlehem Works.

Now, some officials think the window of opportunity may be closing on Delaware Valley.

On Feb. 18, 2003, city council unanimously approved a cooperation agreement between the city and Delaware Valley Real Estate Investment Fund, a pension trust of building trade unions in the Philadelphia area which plans to buy the 160-acre Bethlehem Works site in South Bethlehem.

Bethlehem Steel and the city called Delaware Valley the "preferred developer" of the proposed retail and entertainment complex on the site of Steel's engine house, machine shop and blast furnaces.

Roger Ochse, who is handling the sale of former Bethlehem Steel land now owned by Cleveland-based ISG, said the company will entertain other bids.

"We are not operating under an exclusivity agreement," Ochse said. "More importantly we want to make sure something happens with the property."

Delaware Valley officials didn't return calls for comment.

Now some city council members want to know what Delaware Valley is doing.

Councilman Robert Donchez said he was surprised to learn Delaware Valley lost its "preferred" status.

"I was under the assumption we were moving forward," Donchez said. "Council does require an update."

Delaware Valley met with state and local officials about possibly building a minor-league baseball stadium on the Works site two weeks ago, according to state Rep. T.J. Rooney.

Rooney, whose district includes the 160 acres of Bethlehem Works, has been a champion of Delaware Valley since it first expressed interest three years ago.

Delaware Valley officials are scheduled to advise city officials on their baseball efforts later this week, Rooney said.

Mayor John Callahan said he doesn't know the status of negotiations between ISG and Delaware Valley.

"The city doesn't control that property," Callahan said. "These are private companies."

Over the years, the city has borrowed against its federal Community Development Block Grant funds to pay for improvements to the site including new roads and lighting.

"The city has made a tremendous financial commitment in CDBG funds," Donchez said. "We need to start seeing a return on investment."

"I'm very sensitive to the fact there's $10 million in taxpayers' money on those lands," Callahan said.

Callahan said ISG has lived up to its end of the deal as a partner in redeveloping Steel lands.

"I'd like to see Del Val be the ultimate owners of that property, but most importantly I want to see it in the hands of somebody who's going to do something good with it," Callahan said. "Of most importance is respect for the history there, and the ability and resources to bring it back to productivity."

Delaware Valley is an investor, not a developer, and has never revealed its portfolio of properties.

The fund's officers had an understanding with Steel for the 160 acres of land, but they never had a firm agreement.

When ISG sought U.S. Bankruptcy Court approval to buy Steel last April, Delaware Valley's interest in the property wasn't recognized as an official offer.

ISG has said it would honor any agreements and negotiations Steel had started for redevelopment.

Last June, another developer, Preferred Real Estate Investment, sued ISG, alleging that the steelmaker had improperly backed out of a deal to sell it the former Bethlehem Works and adjoining tracts for $4 million.

ISG and Rooney both disputed those claims.

There has even been a distant glimmer of a chance the site could be reused for manufacturing.

Last month, the site was eyed by a Spanish wind-energy manufacturer, Gamesa S.A., which is interested in redeveloping a Pennsylvania brownfield site into its North American manufacturing plant.

State officials said the Bethlehem Steel site is one of the possible locations, and named Machine Shop No. 2 -- on the Works site -- as an appropriate facility for Gamesa.

Meanwhile, historical preservationists are staging efforts to keep the manufacturing buildings on the Works site from being demolished.

Mike Kramer and Amey Senape formed a grass-roots group, Save Our Steel, and are trying to raise awareness about Bethlehem Works' historical value.

Senape told a group of South Bethlehem residents Monday night that Delaware Valley's failure to buy the land could be an opportunity for preservation.

"This allows the community and interested groups to get together and put out a new plan," Senape said.

Senape doesn't buy the argument that the city has no control over the site.

"Your money will be used on that site in one way, shape or form, and you have a right to input on how it's used," Senape said.

( The Associated Press contributed to this report.)