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Bidding Under Way for Delphi Battery Site

Bankrupt auto parts supplier Delphi Corp. has set an end-of-the-month deadline for the first round of bidding on Anaheim land that used to house its battery plant.

The 21 acre-parcel near the Santa Ana (I-5) and Riverside (91) freeways is set to be sold “as is,” according to Sam Foster, senior vice president of Jones Lang LaSalle Inc., which is marketing the sale.

Several developers have inquired about the land, with Los Angeles-based Kilroy Realty Corp. and the Irvine office of Phoenix-based Opus West Corp. believed to have shown interest in acquiring it.

Delphi, a major parts supplier to former parent General Motors Corp., last year filed the biggest bankruptcy in U.S. auto history.

The Anaheim site at 1201 N. Magnolia Ave. is seen as a “rare development opportunity,” according to marketing material from Jones Lang.

Industrial redevelopment of the site is one possibility. The Anaheim area has a tight industrial market, with vacancy of about 4.3%, according to Jones Lang.

The Business Journal previously reported that Opus West had plans to build three large warehouses on the property that would mark the first development geared to big industrial tenants in Orange County since 2000.

Opus West called the potential development the Anaheim Freeway Technology Park. It was set to total more than 420,000 square feet.

It’s believed that Opus West’s initial try to buy the Delphi property was scuttled because creditors wanted the sale to go through bankruptcy court. Opus could bid on the land if it’s still interested.

Most industrial developers in OC have been building smaller, for-sale “industrial condo” units in the 20,000-square-foot range or less,a possible angle for development of the property, sources said.

Delphi’s Anaheim plant, in operation for more than half a century, had employed 300 workers.

Foster said the sale of the Anaheim plant isn’t a sure thing. It is complicated by Delphi’s bankruptcy process.

“Bankruptcy court has to approve a contract,” Foster said. “It’s a high-risk profile.”

A potential buyer may find that others contest its winning bid, which would complicate the acquisition, he said.

Selling the property “as is” also means the potential buyer must first clean up environmental contamination caused by decades of making lead and acid batteries at the plant.

“There has been a release of hazardous wastes” into the ground, said Elizabeth Ninan, project manager with the state Department of Toxic Substances Control.

Ninan said it could take a year to complete the agency’s environmental analysis.

The marketing materials for the Delphi property were provided to roughly 75 possible bidders, Foster said.

An offer to buy the property would be made to a handful of interested buyers a few weeks after the July 31 deadline. A second round of bidding would take place with a final buyer selected this fall, he said.

Delphi no longer makes auto batteries.

The company is set to emerge from Chapter 11 bankruptcy protection by mid-2007.

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