Shelbyville officials line up behind one Wellman bid

City officials are concerned that the sale of the Wellman property be handled in such a way as to protect some $160 million in insurance money available for environmental cleanup. NEWS file photo

Four bids have been submitted to purchase the 88-acre site formerly occupied by Wellman Thermal Systems, but the property’s receiver would like to re-open the process so even more bids can be offered.

“I’d like to open it back up, so that we can get the most money we can for the property,” said Rep. Ed Mahern (D-Indianapolis), a member of the General Assembly who has been involved in several receiverships on big projects around the state. (A receiver is one who officially receives money or property for others.)

A hearing was held Feb. 24 during which four developers submitted bids for the property. The bids ranged from $1 million to $1.1 million, with some offers including contingencies.

Shelbyville Mayor Scott Furgeson has been closely following the case, because he is concerned that if the wrong arrangement is made for the sale of the land, local taxpayers could wind up paying for an environmental cleanup.

Furgeson has been told there is $160 million of insurance available from Anamag Inc., a company that once occupied the site but eventually went bankrupt.

“We need (a bidder) who will accept the liability, along with the property,” he said.

On Feb. 25, Shelbyville attorney Lee McNeely, on behalf of the city of Shelbyville, sent a “friend of the court” letter to Shelby County Circuit Court Judge Charles O’Connor.

The letter states that it is the opinion of Furgeson and Shelbyville Plan Commis- sion Director Tom DeBaun that the offer of TF Development LLC, of Indianapolis, best meets the overall long-term needs and concerns of Shelbyville and should be the proposed purchaser approved by the court.

Furgeson said the other three bidders — PIRT LLC, North Vernon; CDC, Dallas; and Greystoke Capital Corp., Indianapolis — could try to divide the land into two tracks and sell them to two different groups. If one of those groups were to go bankrupt, local taxpayers could be stuck with the environmental cleanup bill.

“If the court allows that land to be subdivided without going through our (city ordinances), I think it could be damaging to the overall development of a key area of our city,” said Amy Butcher, deputy director of the Shelbyville Plan Commission.

City ordinances were not created to be bureaucratic, but rather “to ensure the best-quality development should happen,” Butcher said.

Anamag Inc. at one time was located next to Wellman Thermal Systems Corp. on Progress Road. The company went bankrupt in 1988 and abandoned the property five years later.

“It is generally accepted that the northern half of the parcel, fronting State Road 44, is the more valuable parcel, and easily converted into acceptable retail development,” McNeely wrote in his letter to the court.

“This cannot be said about the southern half of the parcel, fronting State Road 421, upon which the former Wellman and Anamag buildings are located. As the Court is aware, there are serious environmental issues relating to the Wellman and Anamag sites, which also impacts upon its developmental potential.”

McNeely wrote that the northern half could be developed at great profit, while the southern half (owned by a separate corporation or entity) could be taken into bankruptcy if environmental cleanup efforts proved to be too costly or difficult.

Millennium Investments LLC holds the mortgage on the property.

Shelbyville officials have been advised by Millennium’s environmental lawyer that about $160 million in insurance coverage could be available for the cleanup of the parcel.

The total amount of real estate taxes, penalties and interest owed on the property is $1,959,197.

“The city believes that under no circumstances should the title to the property be transferred to any prospective purchaser without a clear understanding that the purchaser would take title in such a manner as to preserve the environmental insurance claims,” McNeely wrote.

Contacted on Thursday, Mahern said he had talked to O’Connor and told him that his schedule should be lighter over the next three weeks. Mahern could not be present in court on Feb. 24 because of his duties at the General Assembly.

Mahern said he also shares Furgeson’s concern regarding the cleanup.

“We’ve got to design it so those insurance claims can still be pursued and that any proceeds can go toward the cleanup,” he said.

While Mahern will eventually make a recommendation on which of the four developers should be chosen, O’Connor will make the final decision on the matter, he said.

While Mahern would like to reopen the bid process, McNeely said he doubts that will happen. “The judge indicated in open court that the time for submitting bids has passed, and the only offers being considered are the ones before him,” McNeely said.

McNeely questioned the fairness of any developers getting a “second bite at the apple.”

Furgeson said he is not trying to influence O’Connor in any way. “We’re trying to tell him our position,” he said.

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