Presentation is loading. Please wait.

Presentation is loading. Please wait.

RACERs Environmental Accounts and Cleanup Responsibilities Open House Ypsilanti, MI (June 20, 2012) 1.

Similar presentations

Presentation on theme: "RACERs Environmental Accounts and Cleanup Responsibilities Open House Ypsilanti, MI (June 20, 2012) 1."— Presentation transcript:

1 RACERs Environmental Accounts and Cleanup Responsibilities Open House Ypsilanti, MI (June 20, 2012) 1

2 2

3 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 RACERs website. 3

4 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 4

5 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 5

6 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…. Why the States and the U.S. Entered Into the Trust 6

7 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 7

8 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 8

9 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. 9

10 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. 10

11 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 11

12 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. 12

13 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…. 13

14 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. 14

15 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) 15

16 Clean, Safe, and Ready Content 16

17 Create a Team 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… 17

18 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 18

19 Utilize the State VCP Program If a site is not under orders consider taking it through the states 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. 19

20 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. 20

21 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. 21

22 Parcel Off Success Story 22

23 RACER Cleanup Principles Extraordinary cooperation with lead agencies. – Annual budget approval process. – Work scope approval process. – Resulting co-managed budgets. – Streamlined RCRA documentation. – 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. 23

24 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 24

25 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 Managers priorities. Examples; 25

26 Build on Slabs 26

27 Preparation for Reuse 27

28 Accelerate Investigation 28

29 Preparation for Reuse 29

30 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 30

31 Green Works 31

Download ppt "RACERs Environmental Accounts and Cleanup Responsibilities Open House Ypsilanti, MI (June 20, 2012) 1."

Similar presentations

Ads by Google