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Auction for Toxic Site Planned

The auction to decide who will buy the long idle site of the former Bermite Powder Co. plant was delayed again, pushing the date for a decision back to March 7. It is believed that just two potential bidders remain for the 1,000-acre property, which was contaminated when perchlorates, a toxin believed to cause cancer and other diseases at certain levels, seeped into the soil and groundwater as a result of the munitions manufacturing conducted on the site for more than 50 years. The most-recent auction date, slated for February 8, was moved for a second time so that an insurance settlement agreement could be completed. The agreement, which defines the funding available for the cleanup of the site, is important to potential buyers as they analyze their costs to acquire and redevelop the property. “The main reason for the delay is the insurance settlement agreement with regard to remediation,” said Lisa Hardy, planning manager for the city of Santa Clarita. “It’s a very complicated agreement that took a significant amount of time to finalize. With that in place, it provides a lot of the financial information that these bidders need to know.” The amount of the remediation funding could not be determined. Officials at Whittaker, which acquired Bermite some years ago and holds ultimate responsibility for the contamination, declined to discuss the agreement. (Whittaker has since been acquired and now operates as Meggitt Whittaker.) The property, in the heart of the Santa Clarita Valley, has been idle for over a decade while lawsuits over who holds responsibility for the cleanup were settled. Late in the 1990s, it was acquired by RFI Realty Inc., a Phoenix-based remediation specialist. But RFI failed to move forward with the project, which is now being sold as part of a Chap. 11 reorganization plan. Suncal Companies, which bills itself as the largest privately held developer of planned communities, and Cherokee Investment Partners, a fund that acquires brownfield sites and cleans them up for development, may be joined by other interested bidders when the property finally comes up for sale in Arizona bankruptcy court next month. “Our interest really has not changed,” said Dwight Stenseth, managing director of Cherokee. “We’ve been around the project for three years now, and we’d love to be the owners of it. We think we’d be best given that we have sufficient capital and we have the expertise to solve a serious, serious problem that the city has and the water purveyors have.” Besides the danger to the city’s water supply, the site is also central to the economic development plans for Santa Clarita and can provide housing for thousands of new residents expected as the city grows. Officials at Suncal did not return phone calls seeking comment, nor did Alisa S. Lacey, an attorney with Stinson Morrison Hecker LLP, who represents RFI. But in earlier interviews, Lacey said that the court is likely to follow the recommendation of representatives of RFI as to who submits the highest and best offer. RFI had named the property Porta Bella when it was still planning to clean up and redevelop the site. The hearing will take place in Phoenix.

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