Conectiv Energy has agreed to pay $9.6 million for 60 acres of Bethlehem Steel brownfields, a bid that, if approved by a bankruptcy court, would be the first land sale to a private industrial user in the Bethlehem Commerce industrial park.
The bid was filed after officials from Bethlehem Steel Corp. and Conectiv reached an agreement of sale for the parcel fronting Applebutter Road, at the far eastern end of the former steelmaking giant's 1,600-acre south Bethlehem holdings.
"We've gone through everything short of closing," said Stephen Donches, Bethlehem Steel's vice president of public affairs.
Donches said the court has set a Dec. 26 deadline for bids, with approval expected as soon as Dec. 27. Bethlehem Steel filed for Chapter 11 reorganization Oct. 15 after posting losses for its fifth consecutive quarter, including $1.2 billion the first half of the year.
"The property is out there and it's been advertised, so anybody can step up and bid on it," Donches said. "If there are multiple bids, on the 26th there would be an auction and it would be submitted to the judge."
Though Donches said he wasn't aware of other parties interested in the land, he didn't close the door on an unanticipated bid.
"Until things are signed and sealed, anything can happen," Donches said.
Conectiv spokesman Lee Wasman said he doesn't expect the company will need to get into a bidding war.
"We are confident we will be closing on the property sometime at the end of the year," Wasman said.
The bankruptcy process has delayed the project by about a month, he said, but the delay has not pushed back a planned late summer start to produce electricity.
"We would expect to begin construction in the beginning of the year," Wasman said. "We've tried to maintain some flexibility, so we're still within our relative time line."
Because the Bethlehem Commerce land is in a special tax abatement district, the city, county and school district wouldn't tap into the full flow of revenues from the Conectiv plant for 10 years. The tax rate would step up in 10 percent increments annually until the full tax rate takes effect in the 10th year.
Discharge and air quality permits are pending before the state Department of Environmental Protection and the U.S. Environmental Protection Agency, according to Wasman.
If the court approves the land sale, Conectiv would be in a position to begin work almost immediately.
"Locally, several temporary permits have been issued for site excavation and site clearance and several permits for foundations for several of the units," said Tony Hanna, Bethlehem's director of community and economic development.
The proposed Bethlehem plant is part of a Conectiv restructuring that focuses the company on the niche market of wholesale electricity sales. It is almost identical to the plan PPL Corp. has for a $250 million gas-fired plant in Lower Mount Bethel Township.
The Conectiv plant would provide intermittent electricity at periods of peak demand to the power grid for Pennsylvania, New Jersey and Maryland.
"We're certainly encouraged by their progress," Hanna said. "We're in the home stretch in terms of getting ready for construction."