Producers Coop

[Ryan]

Agree 1000% - why not make the polluter responsible for cleaning up their mess?

That’s not how things work. Companies get bailed out but stil make profits. Think paycheck protection loan fiasco. Those loans were designed to be forgiven., same with this situation. The business structure is designed to minimize private cost while maximizing private profits

[GaryOKC6]

I got a call from someone at the OERB several months back about property that my Wife's family owns in western Oklahoma. there was a report of old storage tanks leaking oil onto the ground. They said they would clean it up for nothing if we give them permission and they did. Not sure how that came about but maybe there are options for brownfield funds.

[Lafferty Daniel]

It is pretty much unknown because I do not believe a phase I or phase II site assessments have been done.

How much would the assessments costs so they can figure out what the cleanup would cost?

[Mott]

Since I switched the plant for a number of years, wondering what the ground pollution might be. We delivered cars loaded with cottonseed, and pulled cars with bales of cotton lint, and tank cars of cottonseed oil. Whatever the processing was, not questioning, just wonder where the pollution comes from.

[yukong]

So not even OERB?

The OERB is not in the business of buying commercial property, so no. There is no budget for a state agency to buy property to clean up and sell to a commercial entity.

The bottom line is this…either the current owners spend the unknown amount of money to clean it, or they reduce the price to enable a purchaser to be able to make the money work considering the clean up costs. Short of those two things, it will sit empty like it has for several years. The ball is completely in the current owners hands. The City and the State are not going to bail them out.

[yukong]

I still don't understand why the contamination is only seems to be a problem IF someone wants to buy and use the land... if the contamination is already there and causing problems it should be cleaned up now, regardless of sale or future use.

The reason is that as the property currently sits...no environmental harm is occurring. It occurred decades up to 100 years ago. Since there are no ongoing releases...then there isn't a real need to do anything. The problem comes when someone wants to develop the property. Under the law, for most contamination issues, there are two main screen levels...industrial which is more lax, and residential which is very strict. Because the property was industrial, there wasn't an issue. And, if a developer wanted to just put in a commercial development, then the cleanup would not be as difficult. But as previously stated, the only way to really make this profitable is to have a residential component. That causes the most stringent of cleanup requirements. That drives the cost way way up. But as the property sits now...there isn't a real issue.

[yukong]

So, this property is basically hopeless unless the city or state somehow acquire it through a land swap or something similar. Thats what is seems as a total layman.

Not going to happen. Not a chance. The city and the state will not take the property in a land swap. Neither are in the "development" business themselves, and neither is going to expend taxpayer money to benefit private development.

[yukong]

Agree 1000% - why not make the polluter responsible for cleaning up their mess?

The majority of the contamination of that property occurred over 100 years ago. It is likely that the "generators" of the contamination have been gone from existence for close to 100 years. It would be virtually impossible if not wholly impossible to determine who generated the contamination. Under RCRA (Resource Conservation and Recovery Act) and state environmental laws, the responsible parties are the owners of property and the operators. Since the operators of the oil field businesses are no longer in existence, then the environmental agencies go after the owners. That is one of the reasons neither the state or the city will take the property. As owner, they do not want the liability. Another big problem for a developer is without knowing the extent of the contamination, no bank will finance the purchase or development because no bank or financial company wants a mortgage on contaminated property because they would not want to foreclose and then own contaminated property that they couldn't sell without remediation. It is a catch 22. Either the current owner remediates the property, or they take cleanup costs into consideration as to the purchase price.

[yukong]

i'm assuming it would be they were grandfathered in? or given and exemption. and thus it's on the next owner.

Not grandfathered it...they likely no longer exist. The majority of the contamination occurred over 100 years ago.

[yukong]

I got a call from someone at the OERB several months back about property that my Wife's family owns in western Oklahoma. there was a report of old storage tanks leaking oil onto the ground. They said they would clean it up for nothing if we give them permission and they did. Not sure how that came about but maybe there are options for brownfield funds.

That's what they do. They will clean up current and ongoing contamination, but I doubt that they would step in here. Usually they do cleanups for private land owners who are trying to commercially market their property. This is not one they would entertain.

[yukong]

Since I switched the plant for a number of years, wondering what the ground pollution might be. We delivered cars loaded with cottonseed, and pulled cars with bales of cotton lint, and tank cars of cottonseed oil. Whatever the processing was, not questioning, just wonder where the pollution comes from.

The vast majority comes from the old, early 20th century oil and gas exploration that occurred on that site. The majority of south downtown OKC was all oil fields and refineries back in the early 1900s. One interesting fact...ODOT had to pay a bundle for remediation just to build the brick town stretch of the OKC Boulevard. They ran into all sorts of contamination. The underground utility corridors had to be specially built to prevent migration of the contamination to other areas of town.

[yukong]

How much would the assessments costs so they can figure out what the cleanup would cost?

A phase 1 and 2 combined would likely be somewhere around $5,000 to $10,000 per commercial lot. Now, that is a standard sized lot. To do this entire site..I would just spitball a price at around $75,000 to $100,000 or more. No prospective developer will pay that price because if the news is bad...then they are out $75,000 to $100,000 or more. The owner doesn't want to do the assessment because once the extent of the contamination is better known...then they are stuck if the news Is bad. No one would touch it then without the owner performing the remediation. I suspect the owners don't want to know or they have a pretty good idea what they are looking at. They may have done a phase I. Shoot, they may have done a Phase II. I haven't heard anything about a Phase II. I did hear they were planning on a Phase I, but I never heard if they ever had it done. If they did...it may have been bad news.

[yukong]

How much would the assessments costs so they can figure out what the cleanup would cost?

One of the things needed in a phase II would be groundwater test wells to determine the contamination of the groundwater. I think each test well will run in excess of $10,000. As large as that site is…I wouldn’t be surprised if it wouldn’t need 10 or more test wells.

[CaptDave]

^^ Thank you yukong for the extremely informative posts about this issue. I still believe the polluter "should" be required to clean their mess up even if it would be a present day corporate descendant of the entities that created the mess decades ago. But for all the reasons you outlined, I can also see how it would turn into a giant messy legal battle resulting in no change at all. It's a great example of the disconnect between "what should be" and "what is" when dealing with some corporate interests. (That sounds really anti-business, but I'm really not - I'm just very pro-corporate responsibility and greatly appreciate good corporate citizens.)

[Lafferty Daniel]

A phase 1 and 2 combined would likely be somewhere around $5,000 to $10,000 per commercial lot. Now, that is a standard sized lot. To do this entire site..I would just spitball a price at around $75,000 to $100,000 or more. No prospective developer will pay that price because if the news is bad...then they are out $75,000 to $100,000 or more. The owner doesn't want to do the assessment because once the extent of the contamination is better known...then they are stuck if the news Is bad. No one would touch it then without the owner performing the remediation. I suspect the owners don't want to know or they have a pretty good idea what they are looking at. They may have done a phase I. Shoot, they may have done a Phase II. I haven't heard anything about a Phase II. I did hear they were planning on a Phase I, but I never heard if they ever had it done. If they did...it may have been bad news.

Very informative, thank you.

I know this is a loaded question, but would you have a ballpark estimate for the cleanup? Like are we talking $5 million on the low end and $100 million if it's "bad news"?

[yukong]

Very informative, thank you.

I know this is a loaded question, but would you have a ballpark estimate for the cleanup? Like are we talking $5 million on the low end and $100 million if it's "bad news"?

It's hard to spitball that one without knowing the extent of the contamination. But to get the site to residential standards would require removing any and all underground structures, piping, tanks and such. Ask Gary Brooks about that. When he developed the Steel Yards...the cleanup was way more expensive then anyone would have guessed because when they started excavation of the site after remediation had occurred, they found one or more underground oil storage tanks that were not on any maps or historic documents. He has spoken publicly about this. It slowed the development and caused costs that were not planned. There could be such at this site, but no one knows, and it is possible such would not be revealed in a phase I or II. But any and all "hot" soil would have to be removed and taken to approved disposal sites, which could be very expensive. All new soil brought in. If groundwater is contaminated, treatment would be required which is not cheap. So..I would say millions and millions, but without more, no one can say. That is the issue. No one is willing to take the chance. But even if just $5,000,000...if you pay 30,000,000 for the site, and it is still only worth $30,000,000 after cleanup...then it isn't worth buying. Getting financing would be difficult.

[yukong]

^^ Thank you yukong for the extremely informative posts about this issue. I still believe the polluter "should" be required to clean their mess up even if it would be a present day corporate descendant of the entities that created the mess decades ago. But for all the reasons you outlined, I can also see how it would turn into a giant messy legal battle resulting in no change at all. It's a great example of the disconnect between "what should be" and "what is" when dealing with some corporate interests. (That sounds really anti-business, but I'm really not - I'm just very pro-corporate responsibility and greatly appreciate good corporate citizens.)

It's possible to go after corporate successors. If they are easily determined. But that in and of itself can get very very costly. But it does happen. It has been done here in Oklahoma. But the normal course of business would be for the current owner to pursue that litigation to recover their cleanup costs. The city or the state isn't going to do that because there is a corporate entity that owns the property and they have resources. Let them seek cost recovery. That is how it usually happens.

[warreng88]

It's hard to spitball that one without knowing the extent of the contamination. But to get the site to residential standards would require removing any and all underground structures, piping, tanks and such. Ask Gary Brooks about that. When he developed the Steel Yards...the cleanup was way more expensive then anyone would have guessed because when they started excavation of the site after remediation had occurred, they found one or more underground oil storage tanks that were not on any maps or historic documents. He has spoken publicly about this. It slowed the development and caused costs that were not planned. There could be such at this site, but no one knows, and it is possible such would not be revealed in a phase I or II. But any and all "hot" soil would have to be removed and taken to approved disposal sites, which could be very expensive. All new soil brought in. If groundwater is contaminated, treatment would be required which is not cheap. So..I would say millions and millions, but without more, no one can say. That is the issue. No one is willing to take the chance. But even if just $5,000,000...if you pay 30,000,000 for the site, and it is still only worth $30,000,000 after cleanup...then it isn't worth buying. Getting financing would be difficult.

Looking back on the Steelyard thread, $1.5 million in Brownfields grant for site cleanup and $4.5 in federal stimulus funding. I know TIF was included as well, but don't know how much. Looks like the current land of the Steelyard is just over five acres. The Producers Coop is over 40 acres, if I remember correctly.

Assuming the cleanup cost is the same, all of the funds above were used for cleanup (not more) and adjust + 25% for inflation, the cost for cleanup would be around $60 million ($6 million * 8 times the size(40 acres/5 acres) * 1.25). Not sure if a break is given for a larger project, but just something to think about...

https://www.okctalk.com/showthread.p...ight=steelyard

yukong, since you know more about this than all of us, please let me know if I am wrong.

[yukong]

Looking back on the Steelyard thread, $1.5 million in Brownfields grant for site cleanup and $4.5 in federal stimulus funding. I know TIF was included as well, but don't know how much. Looks like the current land of the Steelyard is just over five acres. The Producers Coop is over 40 acres, if I remember correctly.

Assuming the cleanup cost is the same, all of the funds above were used for cleanup (not more) and adjust + 25% for inflation, the cost for cleanup would be around $60 million ($6 million * 8 times the size(40 acres/5 acres) * 1.25). Not sure if a break is given for a larger project, but just something to think about...

https://www.okctalk.com/showthread.p...ight=steelyard

yukong, since you know more about this than all of us, please let me know if I am wrong.

Two things…1). I do not think the Steelyard received a Brownfields grant. I believe it was a low interest Brownfields loan. Interest of 1-2%. Grants cannot be extended to private developers. 2). Without knowing more it’s hard to guesstimate the total cleanup cost, but I would not discount your math. It could conceivably be that large. But one more point…the Steelyard was all residential, so the MCL (maximum contamination level) was much lower. If the Co-Op property were broken up into commercial and residential projects, then the cost would be less as the MCL for commercial/industrial is higher so it takes less to clean up. One of the prospective developers wanted to build a soccer stadium. The MCL for that would have been industrial. So a lot depends on the different components of the development.

[Urbanized]

Two things…1). I do not think the Steelyard received a Brownfields grant...

Sorry, this info is incorrect. Steelyard received $800K in brownfields grant money (in fairness it came through the City, which was intimately involved in Steelyard’s development): https://www.epa.gov/archive/epa/news...-cleanups.html

[yukong]

Sorry, this info is incorrect. Steelyard received $800K in brownfields grant money (in fairness it came through the City, which was intimately involved in SteelyardÂ’s development): https://www.epa.gov/archive/epa/news...-cleanups.html

Actually...my info was not incorrect. If you read the news release...OKC got a grant from the EPA for the Brownfields Revolving Loan Fund. The Grant was to OKC for OKC to use in their Revolving Loan Fund. The event where the EPA gave the check to OKC was held at the Steel yards...but the money to developers will be in the form of a low interest loan.

The news release you linked states as follows....The U.S. Environmental Protection Agency (EPA) and the city of Oklahoma City held an event today celebrating an EPA revolving loan fund grant of $800,000 to support cleanup at Brownfields sites. Then......Today’s grant will be used to capitalize a revolving loan fund, from which the city can provide loans to support cleanup activities for sites contaminated with hazardous substances and petroleum. Funds will also be used to prepare cleanup plans, oversee site cleanups, market the loan fund, and conduct community outreach.

As I said above...Brownfields grants only go to governmental entities, not private developers. Trust me on this one. I have been involved in several. If the Steelyards got money from the Brownfields office, it was via a revolving loan fund loan. DEQ also has a Brownfields program. Grant money for governmental entities, and low interest loans for developers. One caveat...there is a very finite pool of revolving loan fund money. Once it is loaned out...there is no more until the loans are repaid.

[Urbanized]

Sorry, that was a lazy read on my part. I knew a brownfields grant was utilized as a part of the financing package for Steelyard, so I stopped reading your earlier post after the line that seemed to indicate to me that you believed no brownfields grant was a part of that project. Clearly it was, and Steelyard could not have happened without it.

But you’re obviously correct in that its usage enabled a low interest loan to the developer rather than a direct award. I’d maintain that is a technicality, however. A brownfields grant was an instrument needed (and utilized) for that project. It was an INCREDIBLY difficult one, for many reasons, most of them environmental.

[yukong]

It is a minor distinction, but one nonetheless. Under the Brownfields program...there are two funding types. All Brownfields money comes from the EPA. The State has a Brownfields division at DEQ and the City has a Brownfields office. Tulsa also has a Brownfields office. EPA provides grant funds to the State to administer to governmental entities. And EPA provides (via grant) revolving loan fund money to the State DEQ and to OKC and Tulsa. DEQ can allot "grants" to governmental entities for cleanups and they are "grants" that do not have to be repaid. Then the State and OKC/Tulsa can issue low interest loans to private developers to remediate blighted properties. That money is not a "grant" in the purest sense of the word. Yes...EPA made a grant to the city or the state for the Revolving Loan Fund...but once in the city or state coffers...it is no longer administered as a "grant." Those funds have to be repaid to then provide for further loans to developers. But it's still a great deal for developers because the interest rate is usually 2%. Cheap money.

[Urbanized]

Yes, and said cheap money was the only way that project was able to move forward. I do get that it was packaged as a loan, however.

[yukong]

Yes, and said cheap money was the only way that project was able to move forward. I do get that it was packaged as a loan, however.

Cheap money via Brownfields loans have been very important to several projects here in OKC. Grants to smaller cities and towns in other regions of the state have been very important for restoration of blighted government properties.