Alcoa-LCRA agreement off
The Reporter h as l earned f rom L CRA spokesperson Clara Tuma that the river authority “did not elect to purchase the (Alcoa) property” and the entities are no longer attempting to finalize the deal.
Jim Hodson, Alcoa spokesman, confirmed that the time frame on the plan announced last August, and extended this year, has expired without a sale contract being proposed.
“We are still talking to LCRA,” Hodson said.“Butit’snotasa resultofanything on the agreement to sell which was announced last year.”
Hodson didn’t rule out the possibility the aluminum company and the river authority could reach a future deal. “But it would be different from this (proposal),” he said.
‘DUE DILIGENCE’—On Aug. 15, 2012, the companies announced plans for Alcoa to sell the land, water and power rights at the former Rockdale Operations to the LCRA.
Tuma said the two entities had entered into a “real estate contract related to Alcoa property in Milam, Lee and Williamson counties.”
It was anticipated details of a sale contract would be hammered out by Jan. 1, 2013 and the companies began a “due diligence” process.
Tuma termed the due diligence period “to allow LCRA to determine if LCRA wanted to purchase the Alcoa property.”
The due diligence process was not completed by Jan. 1 and the first signs that all was not well in the negotiations came in a Feb. 20 LCRA board session.
After an executive session, the LCRA board deadlocked in a pair of 7-7 votes tied to the proposal.
One motion was actually to terminate the agreement to sell and one was to continue negotiations but characterized the proposed terms as “unsuitable and unsatisfactory to the LCRA.”
(One member of the 15-person LCRA board was not present.)
Terms of the proposal have not been made public.
After another executive session, in a 10-4 vote, the board agreed to a threemonth extension of negotiations “to allow additional time for due diligence,” according to Tuma.
That period, and the real estate contract, expired May 31, Tuma said.
“LCRA elected not to purchase the property,” she said.
WATER— Al though the proposed sale also would have involved transfer of Alcoa’s power contracts to LCRA, analysts said the situation was mostly about water.
LCRA would have acquired Alcoa Lake, which has a capacity of 10,500 feet, and Alcoa’s extensive surface and groundwater rights.
The property sits over the prolific Carrizo-Wilcox Aquifer.
LCRA’s original 2012 release noted preliminary estimates indicated it could produce as much as 45,000 acre-feet per year in groundwater and even more in surface water from the Alcoa acquisition.
LCRA said its goal was to “find” 10,000 acre feet of water in the next five years.
Hodson said the recent granting of permits to Alcoa for additional water well drilling was “a separate matter” from the LCRA proposal and that plans to drill those wells would continue.
Unde r propos ed te rms announced in 2012, Alcoa would have retained ownership of its structures on the land and the atomizer would remain open.
That includes the smelter which poured its first metal in 1952 and its last in 2009.
VELOCITA—It’s not the first time a sale of Rockdale Operations land was announced and didn’t happen.
In October, 2010, Alcoa said it had signed a letter of intent with Velocita Holding, which wanted to create a “green research community” on 11,000 acres at the Rockdale Operations site.
Velocita’s plans called for essentially a new town with 5,000 residents, a billion-dollar tax base value and $315 million annual payroll.
The deal was called off in December, 2010, after Velocita announced it was unable to reach an agreement with Alcoa.