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Niagara Seeking Developers

Spirtas Estimates a Cost of $1.2 Billion for Viable Factory

August 22, 2014
By CASEY JUNKINS , The Intelligencer / Wheeling News-Register

HANNIBAL - Niagara Worldwide LLC President Eric J. Spirtas cannot promise the former Ormet aluminum smelter will employ 1,000 workers again, but he said his firm is actively communicating with several potential developers for the site along Ohio 7.

"We are in discussions with three established parties who may be interested in restarting the smelting component," Spirtas said, although he did not identify those parties.

Spirtas estimates that if a manufacturer wanted to build a factory with similar capacity today, it would cost them $1.2 billion. His Niagara firm paid $25.25 million to acquire the assets out of bankruptcy in June.

Niagara Worldwide is based in Niagara, Wisc., and acquires, markets, manages and sells idle industrial properties and assets. Spirtas said the firm acquires properties like Ormet and determines a plan and feasibility of enacting that plan before finding partners and investors.

Since taking ownership of the Monroe County site, Spirtas' firm has renamed it "Hannibal Development Partners." The firm's website states the property features 1,032 aluminum pots on 1,600 acres with an Ohio River barging station.

Last year, Wayzata Investment Partners wanted to pay $221 million for the plant, which closed in October after a long series of negotiations with the Public Utilities Commission of Ohio regarding electricity costs, with the hope of eventually powering it with natural gas drawn from the property.

Citing the facility's location, Spirtas said there are numerous oil and natural gas industry companies considering the site for development. He said petrochemical companies, processing companies and firms that work in water delivery are all looking at the Hannibal property.

"We are prepared to section off certain portions of the plant for use by individual companies if that is what they want," he said. "We are communicating with these companies. They are communicating their needs and considering their options."

In February, Ormet officials announced their intention to sell the reduction plant that sits between the Ohio River and Ohio 7 in Monroe County.

This was roughly one year after the company filed for bankruptcy protection amid a business environment that included falling aluminum prices and rising electricity bills. The failed Wayzata deal would have eventually alleviated these costs because of the planned on-site natural gas power generation.

Although the deal with Wayzata did not materialize, Triad Hunter has been drilling and fracking on Ormet ground via lease agreements for the past two years. In the midst of the bankruptcy, Triad paid $22.3 million to purchase the rights to the oil and natural gas.

A recent Triad Hunter report shows the company began selling oil and gas from three of these wells on May 6, with the total daily average rate of 11.7 million cubic feet of natural gas and 1,788 barrels of condensate.

"I am aware of their operations and their prospective operations," Spirtas said of Triad Hunter.

 
 
 

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