The Danville Industrial Development Authority is selling the Cane Creek Boulevard property occupied by Litehouse Inc. to the company.
The IDA voted unanimously Tuesday morning to authorize the sale of 145 Cane Creek Blvd. to Litehouse for an amount that would guarantee that the IDA's debts related to the property would be covered.
The sale likely will be about $20.5 million, said Danville Economic Development Director Corrie T. Bobe.
"The intention is to clear all indebtedness on the property," said Linwood Wright, public and governmental affairs consultant with the city.
So far, there is about $10.5 million in debt incurred by the IDA related to the property, said Danville Finance Director Michael Adkins. But the number will continue to increase as Litehouse works on an expansion project at the Airside Park facility, he added.
"Because the amount of debt is increasing as the expansion progresses, the resolution to sell the property to Litehouse today needed a flexible sales price in order to reflect the proper amount needed to satisfy all indebtedness at the point of closing," Adkins told the Danville Register & Bee.
That $10.5 million figure includes the $2.6 million the IDA paid to buy the property from AMCOR in June 2014. The IDA took out a $3.2 million loan for the purchase, with the remaining $600,000 going toward up-fits to the building, Adkins said.
In May the IDA and Litehouse Inc. agreed to a complicated financing structure to expand the company’s facility at Airside Park and to better work with banking regulations.
The IDA funneled a roughly $15 million loan from American National Bank into the expansion of the Litehouse facility, which the authority has owned and leased to the company. A 4.25% interest rate for the loan has been covered by Litehouse, along with a monthly $150 fee paid to the IDA. The company then loaned $5 million of its own capital — a figure not included in the $10.5 million — to the IDA to cover the remaining expansion of the 48,000-foot addition to its facility.
Monthly lease payments from Litehouse to the IDA — plus the $150 monthly fee — has been covering debt owed by the IDA to American National Bank, Adkins said.
The most recent monthly lease payment to the IDA from Litehouse was about $32,125, Adkins said. That amount has been increasing each month, he said.
Headquartered in Sandpoint, Idaho, the company held its grand opening in Danville in July 2019 for its 141,000-square-foot facility at Airside Park. When Litehouse announced in May 2019 that it was bringing 160 new jobs to the city, officials also said the company would expand the former Sky Valley Foods building where Litehouse would locate.
In February 2020, the IDA agreed to provide a loan of up to $19.5 million to Litehouse for the expansion, but bank regulations only allowed for a loan as much as 75% of the building’s appraised value.
According to the new lease agreement, Litehouse will lease the building from the IDA for 10 years, with the payments coming through lease payments.
Litehouse, which also operates manufacturing facilities in Idaho, Michigan and Utah, produces and markets refrigerated salad dressings, cheeses, dips, sauces, apple cider and freeze-dried herbs under the Litehouse label. The products are sold through supermarkets, including Food Lion and Sam’s Club in Danville, and warehouse clubs across the U.S. and Canada.