Anatomy of a Cleanup: Getting Ready for Redevelopment

Scores of communities are remediating old industrial sites and hoping to attract investors and developers to put them to new use. Here's an inside look at how RACER Trust is cleaning up a massive old GM site in Massena, N.Y.

Massena, N.Y., a town of about 11,000 near the Canadian border, is among scores of communities nationwide hoping that prospective investors and developers will soon start arriving on the heels of lengthy  environmental cleanups. In Massena’s case, the site in question is a 217-acre site on the St. Lawrence River where General Motors Corp. operated a manufacturing plant from 1958 to 2009.

By 2015, the decades-long project will wrap up, clearing the way for industrial redevelopment, reports Brendan Mullen, who oversees cleanup at four former GM sites in New York for their court-appointed custodian, RACER Trust (the acronym stands for Revitalizing Auto Communities Environmental Response).

Cleanup of the 217-acre site has been complex and painstaking, requiring tasks that range from demolishing the 855,000-square-foot main building to excavating contaminated soil and shifting the location of an industrial landfill.

In preparation for eventual redevelopment of a 218-acre site formerly occupied by a General Motors Corp. manufacturing facility in Massena, N.Y., the superstructure of the 855,000-square-foot main building was demolished last year.

Painstaking as the cleanup has been, the approach suggests broader lessons about preparing industrial sites for their next chapters: a highly motivated owner, a ready funding source and — no less valuable — a cooperative rather than confrontational relationship with regulators.

At nearly $121 million, the price tag for the cleanup of the Massena site will be the most expensive undertaken among the 89 industrial sites relinquished by GM as part of its bankruptcy reorganization. RACER Trust was tasked by the U.S. Bankruptcy Court with marketing the sites, which initially encompassed 6,000 acres and 44 million square feet of buildings; about two-thirds of the properties need remediation. To finance that work, the trust has a $500 million cleanup budget on top of $270 million for maintenance, taxes, security and other standard holding costs. Taking community input into consideration, RACER Trust seeks proposals from developers that can benefit economically hard-hit areas. As a further stimulus, RACER Trust also prefers to hire local firms for the competitively bid projects. Preference is also given to local contractors and consultants as a further economic stimulus.

Today’s cleanup has roots in 1984, when the U.S. Environmental Protection Agency added the GM property to its national roster of remediation sites. Under its watchful eye, GM undertook a wide-ranging cleanup in the 1990s that included removing contaminated soil, dredging sediment from the St. Lawrence and Raquette rivers, excavating sludge from lagoons and installing wastewater treatment plants.

By the time RACER Trust took charge of the cleanup in 2011, the plant had already been shuttered for two years. Its first task was overseeing the dismantling of the 855,000-square-foot superstructure main building. In 2012, the priority was the removal of the building’s reinforced concrete foundation slab and underground tunnels directly beneath it. All told, demolition of the building yielded 16,700 tons of steel and more than 100,000 tons of concrete and soil, reported Mullen.

This year, the remediation effort is going deeper still, as excavation reaches as far as 50 feet below grade. Perras Environmental Control Inc., a local specialty contractor, will remove a 21,500-square-foot storage building in order to access the PCB-laden soil underneath it. Also on Perras’ to-do list: draining and excavating three process lagoons, plus dismantling an unused 10,000-square-foot wastewater treatment plant and a smaller support building.

Yet another set of tasks are ahead in the final two phases of the project. Next year, a contractor will pick a specialist to remediate another disposal area and move the toe of the slope of an industrial landfill 150 feet before capping it. Work is scheduled to conclude in 2015 with the installation of a permanent system of pipes, pumps and wells to treat contaminated groundwater.

The Massena cleanup, like others overseen by RACER Trust, is virtually free of the disputes with regulators that so often weigh down remediation efforts, project officials say. On the contrary, the EPA — the lead agency on the project — functions as a partner rather than an adversary. On March 13, for instance, federal and state regulators attended an organizational meeting with the RACER Trust team and Perras Environmental. “Typically, you would not see the regulators in that type of meeting,” said Mullen.

Participation of regulators enhances transparency, builds teamwork and fosters communication among all the stakeholders. It is impossible to place a dollar value on good will, but the spirit of cooperation also brings tangible benefits, Mullen contends. Working closely with the EPA and other agencies helps to streamline an approval process that might otherwise slow down the project. “Where we do really save our dollars is on that back and forth that we completely avoid,” he explained.

For more on brownfield remediation, turn to “Batting Cleanup” in the April 2013 issue of Commercial Property Executive.