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Wed, Oct 07, 2009 - Page 10 News List

Hynix’ US plant expected to sell for sharp discount


The Hynix computer chip plant in Eugene likely will be sold for a fraction of what it cost to build.

South Korea-based Uni-Chem is seeking to buy the idled industrial plant for US$50 million — far below the US$252 million Hynix spent to buy the land and build the factory shell a decade ago.

Hynix, also based in South Korea, ceased operations in Eugene about a year ago, putting 1,000 employees and 300 contract workers out of a job.

The size of the proposed discount isn’t a surprise to real estate and economic development experts, who say it’s often difficult to sell a large industrial plant built for a specific user and purpose.

“These are special-purpose, almost single-use properties, and when they sell for alternate uses, they take a substantial economic hit,” said John Brown, a commercial real estate appraiser in Eugene. “Even in a good market, [the buildings] take a pretty good hit.”

Brown said the US$50 million sale price being discussed for the 0.11 million square meter plant and 81 hectare site “appears to be in line with” the prices of other vacated industrial plants in the Eugene-Springfield area.

Officials with Uni-Chem, a leather fabricator seeking to jump into US solar manufacturing, say they expect to close on the Hynix purchase soon.

A Uni-Chem spokesman said the company looked at 20 US sites before deciding to target the Hynix property. Hynix officials say talks are continuing.

Hynix spent US$1.4 billion on its Eugene plant and equipment initially, with only about a fifth of that for the land and buildings. In the decade it operated here, it retooled several times, spending hundreds of millions on new equipment. Hynix continues to incur costs, such as taxes, maintenance and insurance, on the mothballed facility.

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