Company Looks to Squeeze Fresh Value from Groves

For one Florida company, it’s out with the citrus and in with the stone.

Old Corkscrew Plantation LLC, which has thousands of acres of orange groves on its Florida property, doesn’t seem to have any immediate ideas for how to restructure the hefty debt load that propelled it into bankruptcy on Friday. It does, however, have big plans for the future of its business: Scrap all that citrus, and start digging up minerals.

It appears that oranges, grapefruits and tangerines have lost their luster for Old Corkscrew. Never mind that the fruit business equips the company with a positive cash flow, or that Minute Maid and Tropicana use the groves’ bounty in their widely distributed juices. A greater opportunity is calling: that of sand and limestone deposits.

They may be less fragrant than fruit, but the underground reserves discovered during a 2007 study commissioned by the groves’ owners could be worth big bucks, according to court papers, which peg their value at around $5 billion. A report estimates that there are 66.3 million tons of high-quality limestone and 81.2 million tons of top sand lingering under the surface of the 4,800 acres examined.

And there’s a hot local market for these minerals. The state is in serious need of aggregate, a construction material that can be made from the sand and limestone buried under Old Corkscrew’s property. Ultimately, the stuff would be used in the construction of roads and other large infrastructure products.

The state “imports a significant amount of the required material,” Scott Westlake, a managing member of the debtor entities, said in court papers. “Locally sourced reserves of aggregate are depleting and the Florida Department of Transportation has reported projections of less than seven years of reserves remaining.”

Old Corkscrew expects the mining to take place for 20 to 30 years, in phases, with the unaffected orange groves continuing to bear fruit (and generate cash). But even after the extraction work is done, another incarnation could be on tap for property, which is based in Estero.

“After mining is complete, the site may have beautiful lakes around which residential housing can be built,” Westlake said.