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Historic Lehi Roller Mills up for sale in bankruptcy
This is an archived article that was published on sltrib.com in 2013, and information in the article may be outdated. It is provided only for personal research purposes and may not be reprinted.

A century-old Utah County landmark is on the auction block, signaling the end of an era.

Lehi Roller Mills, which has graced Main Street in Lehi for generations, is up for sale as part of a bankruptcy process.

Mark Hashimoto announced the sale. The U.S. Bankruptcy Court in March appointed him as chief restructuring officer for the Roller Mills.

Hashimoto said the holding company KEB Enterprises has submitted an offer of some $4.4 million for nearly all of the 106-year-old company's assets. But if higher offers are received by Aug. 13, an auction will be held Aug. 15 with competing bidders.

While the sale is pending, the Mills' retail store at 833 E. Main St., Lehi, remains open and 19 employees continue to work.

"The potential purchaser has indicated it intends to continue operating the mill," Hashimoto said. "The company still has a good product."

KEB did not return repeated calls seeking comment.

All of the Mills' assets are for sale, including its land, equipment and retail store, along with its famous trademarks and trade names.

The company has been producing baking flour since 1906, with most of its flour being used by corporate and bakery clients, according to the company's website. The mill also sells baking mixes at national retailers, as well as its own retail store in Lehi.

"Gosh, it's not just a landmark, it's been a great business for many generations," Lehi Mayor Bert Wilson said. "We hope this turns out to be a good story — that someone can buy it up and make it work."

Jim Smith, who farms 7,000 acres in Cedar Valley, said the Mills is vital in keeping as many as 50 growers throughout Utah in business.

"The Mills is our only market without going clear to Ogden, which is expensive. It would be a tragedy for someone to buy it and tear it down," said Smith, who still has a check from the Mills made out to his grandfather, dated 1916.

The Mills has been owned and operated by the same family since 1910.

The company, which filed for Chapter 11 bankruptcy protection in December, has about $10 million in debt.

Last year, the Mills' financial woes came to light when several workers staged a street protest highlighting that they and other employees had missed several paychecks. That same month, the Labor Department filed a complaint in U.S. District Court for Utah seeking to force the Mills to halt all shipments to its customers, including Kentucky Fried Chicken, which has been purchasing flour since the 1950s.

The department withdrew its complaint after all workers were paid in full.

Mills' owner Sherman Robinson has said debts have been piling up since 2003 when federal officials began investigating an Ogden feed lot and a former Mills' customer. The Mills, in turn, was forced to notify banks of the investigation when asking for business loans. No charges were filed against the Mills.

Financial problems were compounded, Robinson said, after he secured a loan from America West. When state regulators closed the Layton bank in 2009 the Mills' assets were frozen —-meaning Robinson had no collateral to obtain a loan elsewhere.

The Mills had to make do with a purchase-order loan at an interest rate of 35 percent that wiped out profits and ate up operating cash. With so-called asset financing — nicknamed pay-day lending for businesses — Robinson said he could only obtain working capital for orders already sold.

Although the Mills have been a boon to local wheat farmers for generations, it does not qualify for any agricultural loans, federal officials have said. Such loans are earmarked for rural areas, and Lehi is along the populous Wasatch Front.

The Mills, whose distinctive architecture made it an icon in art and film, was once a backdrop for the 1984 American musical "Footloose," a story about Ren McCormack (Kevin Bacon), a Chicago teen who moves to a small town where a local minister (John Lithgow) has spearheaded a ban against dancing and rock music.

dawn@sltrib.com

Lehi Roller Mills

Founded » 1906 at its present site, 833 E. Main St., Lehi

Auction block • July 2013, $10 million in debt

All in the family » In 1910, George Robinson purchased the mill; grandson Sherm Robinson is the current owner.

Products » Wholesale flour, bakery mixes sold by grocery chains, rolls sold to fast-food eateries

Mills' retail store • Remains open; hours are 9 a.m. to 6 p.m., Monday through Saturday

Auction • Utah County landmark's assets for sale, including retail store, trade names.
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