While a tentative agreement has been made to sell the state-owned plant, a period of due diligence must be completed before the deal can be considered final.

"The deal isn't inked at all," said Becky Gay, project manager for AIDEA on the sale of the Alaska Seafood International building in Anchorage. "We have to look at their credit worthiness for financing, and how they will repay the loan."

The potential deal made on July 13, which involves ChangePoint, an evangelical Christian church, would allow sale of the ASI property for $24.5 million. AIDEA's initial investment alone was $50 million.

"This was what the market was willing to pay, which is $100,000 more than the book value of $24.4 million," Gay said. "We are looking for a business solution to a non-performing asset. It's important to look at the realistic value. It's appropriate fiduciary behavior."

While AIDEA did invest upward of $50 million in the property, Gay said that is no longer what it's currently worth.

"The existing board is doing the right thing with this facility and getting its full value. We are obliged by the process to take the highest bid," she said.

Spokesmen for the Alaska Attorney General's office, which provides legal counsel for AIDEA, confirmed that part of the 90 days of due diligence will be establishing whether the deal complies with federal and state laws regarding separation of church and state.

AIDEA officials agreed on July 13 to an offer of $24.5 million for the property from Anchorage Community Development LLC, a coalition of the Alliance Development Corp. and Grace Alaska Inc.

Grace Alaska, formed about 18 months ago by ChangePoint, has six board members, including Scott Merriner and Karl Clausen, both pastors of the 3,500 member church, said Chris Keffalos, interim director of ACD. Other board members include Lorran Skinner, chief lending officer for Alaska USA Federal Credit Union in Anchorage; insurance broker Les Anderson; Steve Opsahl, an account manager for Span-Alaska Consolidators; and Paul Diederman, a dentist, according to Keffalos.

Grace Alaska officials said they want to use a portion of the ASI facilities for their services and programs.

Final details of the sale are to be negotiated after due diligence is completed. Terms agreed upon on July 13 include a $4 million down payment with the remainder to be financed by AIDEA with the first year at zero interest accrual or payment, four years of interest payments at the federal funds rate plus 2.25 percent, and an option after five years for final buyout or a 25-year amortization at AIDEA's market rate.

"AIDEA did all right," said Chris Stephens, an Anchorage commercial real estate broker. "Selling special-use properties is always very difficult. To achieve a sale, sometimes you have to make accommodations to the buyer that you would not have to make with a more traditional property. It would have been nice to have an all cash deal, but that wasn't in the cards. I don't think anyone could have done any better."

Stephens was the apparent broker to be the listing agent for AIDEA had the state agency not struck a deal on July 13. He said he had not seen all details of the agreement.

In making the proposal, Anchorage Community Development teamed up with Alliance Development Corp., which owns the cold storage facility at the same site.

Alliance Development Corp. was formed in 2003, as a merger of Alliance Enterprises Inc. and Geneva Lakes Cold Storage Inc. Geneva Lakes built the cold storage plant.

Anchorage Community Development has also worked with SYSCO Food Services of Seattle Inc. with the proposal, which would rent space in both the cold storage facility and a portion of the ASI facility. ACD said in its proposal that SYSCO initially plans to invest approximately $2 million to renovate the facility to its specifications.

The proposal also includes plans, in conjunction with Anchorage SportsPlex Inc., to develop a year-round indoor sports facility on the ASI grounds. The facility would include a professional soccer field, two practice fields and an Olympic-sized track. The corporation, in conjunction with Grace Alaska, a nonprofit organization, would develop the ASI facility for conference and meeting space. In addition, RightWay Automotive, another nonprofit organization providing charitable automotive service, would utilize a portion of the ASI facility, as would ChangePoint, the local church.

Seafood venture did not pan out

The initial seafood facility, anticipated to have the capacity to annually produce 100 million pounds of seafood product, was dissolved on Sept. 30, 2003.

An AIDEA project update fact sheet produced May 10 notes that the cost of the project totaled $125 million. AIDEA initially invested $50 million investment for construction of the 184,000- square-foot manufacturing facility and adjacent power plant.

The Alaska Legislature in 1993 provided AIDEA with bonding authority to construct and own a seafood manufacturing facility, which was to do value-added processing of halibut, bottomfish, surimi and salmon.

The seafood plant project began in 1996, when the developer and private investors doing business as the Alaska Seafood Center joined with Central Investment Holdings, a Taiwanese investment company, to form Alaska Seafood International. AIDEA owns the processing facility and leased it upon completion to ASI. Sunrise Capital Partners of New York joined the team in the spring of 2001. Geneva Lakes Cold Storage constructed a cold storage facility on AIDEA land adjacent to the manufacturing facility.

ASI never reached its goals of production, despite many restructuring efforts. In July 2003, AIDEA served notice on ASI that it would be in default of the use agreement for the seafood plant if it did not resolve default issues with Alliance Enterprises, owner and operator of the adjacent cold storage warehouse. Subsequently, the facilities were shuttered and AIDEA has been seeking a buyer ever since.

Stephens said the AIDEA board wrote the value of the property down to $24.5 million last year.