Brownfield Regional Redevelopment Task Force

September 2, 2004     FORUM

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Environmental Risk Management

 Power Point presentation by Jesse Tremaine, Marsh, Inc.

Informational Pages supplied by Marsh, Inc.

Brownfields Q & A

Environmental Pollution Legal Liability Q & A

Environmental Cost Cap Q & A

Summary of Projects discussed by Marsh at our September 2 meeting.

City of Fairfield :

The City of Fairfield was trying to secure a parcel of property meeting the criteria for the relocation of Wal-Mart for the construction of a Super Wal-Mart (no city should be without one of these...). The only land existing that met this criteria was land surrounding an operational U.S. Steel Corporation steel plant. The concept was to carve out an approximate 40 acre parcel which the Super Center could be constructed. Two issues prevented this transaction from happening "smoothly", 

1) the property had pre-existing environmental contamination resulting from past operations and

2) The liability and more frequent exposure to U.S. Steel by having such a facility in the close proximity to their operating plant.

Solution:

The site was carved out and entered into the Alabama Department of Environmental Management (ADEM) voluntary Brownfield program. A remedial plan was developed that U.S. Steel would implement and retain the liability while being conducted. After the site was cleaned up, Wal-Mart would construct their facility. To address the possibility of future operational and environmental exposures to Wal-Mart, Wal-Mart customers & employee's, and U.S. Steel, a Pollution Legal Liability insurance policy combining a General Liability policy was developed to respond on the behalf of Wal-Mart, The City of Fairfield, or U.S. Steel in the event of discovery of pre-existing environmental contamination or bodily injure/property damage resulting from U.S. Steel operations.

The property transaction is expected to close by the end of the year.

Escambia County , Pensacola :

The City/County of Escambia , FL received a grant from EPA to conduct a best-use study for an area designated for redevelopment referred to as the Palafox Redevelopment Area. This area had a SuperFund site located in the "heart" that was preventing economic growth from existing business not willing to expand or new businesses relocating to the area due to the Superfund site. The Superfund site was being lead by US EPA and had gone through more than 10 years of study and interim measures to identify and reduce the environmental exposures to the community. With SuperFund being out of money, it was evident that the site would never be "clean-up" to a manner that would allow redevelopment and thus support the over-all goal of the Palafox redevelopment.

Solution:

The City/County is developing a Special Purpose Vehicle (SPV) that could house various entity members as well as the Palafox properties (including the Superfund Site). The goal would be to have EPA transfer the site to this SPV with the guarantee that funding would be provided to finish the clean-up in support of the identified commercial re-use. With this guarantee, the City/County could float bonds to enable clean-up under today's dollars, thus saving EPA hundreds/million of dollars. The clean-up/redevelopment would be controlled/managed by the SPV utilizing a public/private partnership within the SPV by its members, thus allowing for private capital to fund the vertical construction and accelerate the entire process. In order to protect all of the SPV entity members as well as EPA, the SPV would be wrapped with a blend of Cost Cap and Pollution Legal Liability insurance.  

The SPV and initiation of the early land transfer is anticipated by year end.

Ft. McClennan , Anniston , AL :

The Ft McClellan site was a former military base slated for closure under the Base Realignment and Closure act (BRAC) with the property to be given back to the community. A public group was created ((Joint Powers Authority (JPA))) to receive the property upon clean-up and manage the redevelopment to support economic growth for the area. The base had been undergoing tens-of-years of environmental investigation to determine the magnitude of environmental contamination.

Solution:

To accelerate this property to support economic growth for the Anniston area, the Military agreed to transfer the property to the JPA in an effort to accelerate the program and remove the responsibility and liability from the military to JPA. The military provided a one-time funding amount to enable the environmental remediation to be conducted supporting the identified re-use/redevelopment. However, the military required an environmental insurance policy that would respond on the military's behalf (as well as the JPA) if pre-existing environmental contamination were to be discovered in the future. This transfer was second of three transfers involving contaminated property. The final transfer (remaining contaminated land parcels) is scheduled for transfer end of first quarter 2005. This transfer will have a blended Cost Cap and Pollution Legal Liability insurance policy supporting and responding on behalf of the Military as well as the JPA.

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