Transcript Revitalizing Auto Communities Environmental Response

RACER’s Environmental Accounts
and Cleanup Responsibilities
Open House
Ypsilanti, MI
(June 20, 2012)
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Miscellaneous
• Buyers should be aware that:
– Cleanup dollars available and committed (SA Att. A)
– RACER and Lead Agencies shall attempt to coordinate
redevelopment with cleanup, and shall communicate
with prospective purchaser and/or communities re.
same (SA ¶ 74)
– Lead Agencies shall, upon request, provide a PPA, BFPP
agreement, comfort letter, or equivalent (SA ¶ 69)
• Settlement Agreement and template PSAs, etc.
are on RACER’s website.
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GM/MLC Environmental
Response Trust: a/k/a The
RACER Trust
• Contaminated or partially remediated property
is placed in the Trust (89 properties in 14
States)
• Funding is conveyed to the Trust:
$499 million in cleanup funding
$100 million in administrative funding
$68 million in pooled “Cushion Funding” to
deal with unforeseen conditions
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How the RACER Trust Was
Created
• Federal and State environmental regulators
used in-house and outside experts to
determine necessary remedial and
administrative costs for each site
• Largest environmental response trust in any
bankruptcy case to date
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Why the States and the U.S.
Entered Into the Trust
 Avoids unaddressed contamination and
abandoned properties in bankruptcy
 Promotes property redevelopment and other
economic and employment opportunities
 Returns property to municipal/city tax rolls
 Avoids community stigma
 Not Many Other Attractive Options….
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Other Environmental
Response Trusts
• Asarco: $1.79 billion
• Grace: over $286 million
• Tronox: $270 million + an 88% share of the
proceeds of a fraudulent conveyance action
• Lyondell: $162 million + 1.1B allowed claim
• Chemtura: $29 million + allowed claims for U.S.
and certain States
• Caribbean Petroleum: $8.2 million + $12.5
million work + $18.72 million allowed claim
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How Does the RACER Trust
Work?
• Purpose of the Trust: To conduct comprehensive cleanup
and put properties back to beneficial use
• Certain funding is held in segregated trust accounts for
cleanup and administrative costs of each property
• Certain funding is held in segregated trust accounts
(“reserve” and “cushion”) to address unforeseen
circumstances.
• Federal and State governmental entities are Trust
stakeholders and/or beneficiaries
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How Does the RACER Trust
Work?
• Independent RACER Trustee was appointed by
the bankruptcy court to implement the Trust
after a collaborative State and Federal
interview process and recommendation to the
court.
• Independent chief operating officer was
chosen to oversee Trust operations and
implementation.
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How Does the RACER Trust
Work?
• Trust retained cleanup managers to address Trust
sites, including cleanup needs, sequence of remedial
measures, budgets, day-to-day operations, etc.
• Trust retained redevelopment managers to market
properties and work with developers and local
communities toward sale and reuse.
• Trustee, COO, clean up and redevelopment managers
attempt to serve many varied stakeholder interests,
including those of governmental entities, community
leaders, neighbors, redevelopers, and NGOs.
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How Does the RACER Trust
Work?
• Lead Environmental Agency consults with Support
Agency regarding remediation.
• Trustee proposes, and the Lead Agency approves,
annual cleanup and administrative budgets for each
Trust property.
• Trustee hires contractors to conduct cleanup
activities in accordance with approved budgets, or
reimburses Lead Agency for response costs, including
oversight costs
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The Future of the Trust Sites
• Objectives: Create economic opportunities and
jobs through sale, redevelopment and reuse of
Trust properties.
• Trustee may sell or transfer Trust property on
notice to the U.S., the State, and local community
and after considering potential reuse to create
jobs, benefits to the State and local communities,
among other factors.
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The Future of the Trust Sites
• Property may be sold during or after
completion of cleanup activities.
• The Trust provides that the Trustee and Lead
Agency will coordinate integration of
redevelopment with on-going cleanup
activities.
• We all need to make it work….
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First Things First: The Money
• New York is officially “open for business”
• NYS Consolidated Funding Application (CFA) for
economic development funding:
Single entry point for NYS economic
development funding; applicants do not navigate
multiple agencies and funding sources.
Streamlines/expedites grant application process.
Ensures less bureaucracy/greater efficiency to
fulfill local economic development needs.
• Additional funding sources: Recharge NY, NYSERDA
Energy Efficiency Projects and ESD Excelsior Jobs
Program.
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Next Steps: Liability Protection
• Trust provides that States will work with
prospective purchasers and the Trust to address
liability concerns and provide needed
protections.
• Statutory protection is available under CERCLA
Section 107 and other applicable State laws.
• Additional protections provided under other
mechanisms are also available (e.g., PP, BFP
agreement; no further action/comfort letter)
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Clean, Safe, and Ready
• Content
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Create a Team
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Racer Trust (Pam & Bruce)
Ohio Department of Development
Ohio EPA
Local & County Elected Officials
Local & County & Regional Economic
Development Professionals
Then involve the right people at the right time…
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Communicate & Cooperate
• Maintain informal and formal communication
• Develop mutually agreed upon timelines,
milestones, and end points
• Understand the RACER funding structure and
mission
• Try to have some early wins
• Be ready to jump if opportunity knocks
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Utilize the State VCP Program
• If a site is not under orders consider taking it
through the state’s Voluntary Cleanup
Program.
• Voluntary cleanups are quicker and can be less
expensive.
• Voluntary cleanups produce sites which are
safe and ready for new redevelopment
opportunities.
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NFA trumps a Comfort Letter
• A No Further Action (NFA) letter or Covenant
Not to Sue (CNS) is a document which shows
that a property is investment ready.
• Financing costs decrease as environmental
certainty increases.
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Parcel Off Enforcement Sites
• Can we remove clean portions of RCRA or CERCLA
enforcement sites from the orders so that they
can go through the state VCP program.
• This will get these areas back into productive
reuse years earlier than if they stay with the
original site.
• This will also ensure that staff time is focused on
complex, contaminated portions of the site.
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Parcel Off Success Story
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RACER Cleanup Principles
• Extraordinary cooperation with lead agencies.
– Annual budget approval process.
– Work scope approval process.
– Resulting co-managed budgets.
– Streamlined RCRA documentation.
– E-mail work plan and budget amendment approval process.
– Comfort letter issued timely (Jose Cisneros - Region V).
– Developing model PPA.
– Agency willingness and availability to engage with users.
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Cleanup Mission
• Elliott Laws – “Purpose of TRUST is to help those communities
hurt by the GM bankruptcy.”
• We have a purpose greater than just completing cleanups.
• “Local Buy” – we seek local contractors – support in the
community – (Green Works……….).
• Retain right of access post closing but will work with user to
facilitate reuse.
– User must comply with deed restrictions
– User must comply with Due Care obligations
– All work and budgets require lead agency concurrence/approval
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Redevelopment Cleanup
• Strategic coordination of remedial activities with most likely
reuse plan.
• Ability to reconfigure investigation and remedial schedules to
facilitate reuse.
• MUST remain within overall budget resources.
• MUST obtain lead agency concurrence on scope and any
budget adjustments if needed.
• Integrate remedial work with Redevelopment Manager’s
priorities.
• Examples;
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Build on Slabs
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Preparation for Reuse
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Accelerate Investigation
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Preparation for Reuse
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Green Works
• In Southeast Michigan – RACER has offered assist with “placement
service” for Goodwill/Green Works “graduates”
• Goodwill formed “Green Works” to recycle used equipment from
DTE.
• As non-profit all proceeds support training, etc.
• Agency and Department of Corrections refer candidates to
Goodwill/Green Works
• Green Works trains workers to recycle decommissioned equipment.
• RACER has bid work requiring winning contractor to hire Green
Works personnel
• On site today
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Green Works
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