UD primary bidder for Chrysler site, Funk says

 On Sept. 2, Capstone Advisory Group, LLC, the financial adviser responsible for selling the bankrupt Chrysler site on South College Avenue, sent a letter to the university outlining the auctioning process of the 270-acre piece of land.

Newark Mayor  Vance Funk III, said a representative from Capstone Advisory  told him the university would likely be named the "stalking horse" — a party that submits an initial offer that other potential buyers must compete with.

The letter, given to The Review by Funk, lists the company's valued site assets at approximately $43 million.

University Spokesman David Brond would not disclose the exact amount of the university's bid at this time.

"The short answer is yes, we're fully engaged in wanting to purchase that property," he said. "But we're in the middle of a competitive bid processs, and I don't want to tip the hand."

The timeline for action on the site, outlined in the letter, marked Aug. 23 as the deadline to select the stalking horse bidder, but the official stalking horse has not yet been announced. Although the letter states that dates are subject to change, Funk said Capstone must meet their deadlines by the court-supervised auction on Oct. 22.

"If they do not complete their process by then, they'll lose their right to sell the site, so they're very focused on having it done by then," he said.

The sale and purchase agreement, which is currently five days past deadline, will outline the responsibilities of the buyer and Capstone, such as who will pay for the expensive cost of cleaning up the potentially contaminated site.

A Capstone representative told Funk and Brond the university is not the only bidder.

"We're under the assumption that we're not the only bidder for this property," Brond said. "We've heard about manufacturers, rail companies and real estate developers."

Funk said he hopes the university is the successful bidder.

"I like the plans they have for the site a lot better than any other plans that have been discussed with me," he said.

University's Development Plans

University President Patrick Harker has said the site would be an ideal location for a new campus for medical education that would serve Thomas Jefferson University, Christiana Care Health Systems and the Nemours Foundation. The goal is to provide research opportunities and jobs, Brond said.

"Notice I haven't said anything about building a football stadium over there, like was rumored," he said. "It's all been about focusing on programs, services and research."

The university would also like to redevelop the Amtrak train station, bordering the Chrysler property, to make it more commuter friendly for people who will work on the site, Brond said. Ideally, if bus routes were created from the station to main campus, the stop could also be used as a commuter station for university employees.

"Think about what our main campus would look like if we had less parking on our main campus," he said. "The carbon footprint improves and so does the look and feel of the campus."

Funk said a strong transit system would encourage companies looking to locate near Aberdeen proving ground in Maryland. The United States Army, stationed there, has shown interest in additional research facilities, if they are built on the former Chrysler site.

Right now, preliminary plans for the site are being discussed by University President Patrick Harker, Executive Vice President Scott Douglas, Provost Tom  Apple, architectural planners and the board of trustees. Brond said the developers are considering the site's close proximity to the athletic facilities and agriculture school across the street.

Brond said he would like to see low buildings and green grass areas close to South College Avenue and higher buildings further back because it would improve the look of campus as people come off of Interstate 95 into Newark. The university's plans will not ignore Silver Brook Stream, which runs underneath the plant.

"What if that were to open up and you had a stream cutting across there?" he said. "You could actually have some green grass areas that connected across the street to the agriculture school, and it would change the whole dynamic."

There is a possibility of the site including residence halls for medical students and researchers, Brond said. However, if the university decides to build residence halls, there are different levels of remediation that will have to be done to the soil.

"There is concern about cleaning up and how that's going to be handled," he said. "That's one of the things being negotiated right now.

Land Remediation

The university has had conversations with the Delaware Department of Natural Resources about its responsibility for the site. Brond said the university would be able to clean the property, but there could be some responsibility for Capstone as well.

"There's the purchase price and then there's the clean-up price and they need not be mutually exclusive, because if someone takes the responsibility for cleaning it up than naturally they would want to not have to pay as much to purchase it," he said.

Brond said a third party has taken soil samples and has been working on estimates. He said the price for clean-up could fluctuate between $1 million to several million dollars.

"You never really know until you start a project like that. It's underground," he said. "For 58 years they were painting cars and doing a lot of things on that ground, what level of control did they have 58 years ago?"

As a result of the bankruptcy, Chrysler has forfeited the whole property, except the paint shop, which might be of some value to them. Chrysler could take the machinery inside the shop and move it to some other plant where Chrysler is still operating.