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Feds devote $800M to clean up abandoned GM sites

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Feds devote $800M to clean up abandoned GM sites

David Shepardson / Detroit News Washington Bureau

Washington -- An $836 million plan to prepare 90 former General Motors Corp. sites for new economic life will boost nearly four dozen Michigan properties, including the polluted vestiges of Buick City, Pontiac Assembly and Willow Run.

The program, announced by the White House on Tuesday, includes $161 million for the restoration of 47 sites in 14 Michigan communities. Many are along the I-75 corridor -- the backbone of Michigan manufacturing -- in communities such as Detroit, Flint, Saginaw and Bay City.

The idea behind the massive cleanup effort in 14 states is to "revitalize and redevelop old, shuttered GM facilities, preparing them for new industries, new jobs, and new opportunity," President Barack Obama said.

The Detroit News learned that Buick City in Flint, shuttered in 1999, will be the first project funded through the program because the cleanup plan for that site has already been approved by the Environmental Protection Agency. The official announcement is expected today.

That's good news for economically ravaged Flint.

"The city of Flint was built around the central General Motors sites, but they've been in the deep freeze through GM's financial challenges," Flint Mayor Dayne Walling said in an interview.

He said the EPA approval and federal funds are "like the freezer door has been opened."

The EPA has approved a cleanup budget of $5 million to $7 million for a 452-acre southern section of the site, with preliminary work expected to start in the coming weeks, according to an advance copy of the announcement obtained by The News.

"Finalizing the cleanup is a key milestone in the future redevelopment of Buick City," said Margaret Guerriero, the EPA's Midwest director of land and chemicals division.

The Genesee Regional Chamber of Commerce has been working to bring a private investor to the Buick site to build an intermodal facility, where goods would be transferred from road to rail and generate a number of off-shoot business, from agribusiness to alternative energy.

But the investors have been leery without a firm cleanup plan.

"When these sites were shut down, they left communities with sites ripe for redevelopment, but also put those communities on the hook to deal with issues of contamination, demolition costs, and aging infrastructure," said Sen. Debbie Stabenow, D-Lansing.

"Michigan will get more money than any other state, putting people in our communities to work and paving the way for bright new future for these sites."

Razing, security covered

The Obama administration's cleanup plan for 14 states across the country also boosts New York, which will get about $150 million and Ohio, which is in line to get $52 million. The cleanup portion totals $536 million.

In addition to cleanup money, the pot includes $300 million to cover property taxes, demolition costs, plant security and other expenses.

Michigan alone has sought at least $114 million in unpaid taxes from properties that GM left behind as part of its "bad assets" in bankruptcy last year.

The funds will be administered by a trustee and come from $1.175 billion that the U.S. Treasury allocated last year to wind down the old GM.

The proposal still requires approval of a U.S. Bankruptcy Court judge, and the attorneys general from 14 states will be able to object.

General Motors Co. was formed in July by the sale of GM's "good assets" to a new government-sponsored entity as part of a $50 billion bailout.

The languishing GM properties include closing and closed assembly, stamping and other manufacturing plants, vacant land, parking lots and other unused buildings.

Gov touts green opportunity

Gov. Jennifer Granholm already has in mind the kinds of businesses she hopes to lure to renovated GM sites in Michigan.

"I just want to put a call out right now to anybody who is interested in manufacturing clean energy projects. We want to make these sites the place," said Granholm, who was in Washington on Tuesday for a summit on auto communities.

In her sights: General Electric, which she wants to build wind turbines at one of GM's shuttered Michigan facilities.

Granholm said she is working to convince other companies to come to Michigan as well, to use the shuttered GM facilities.

"The biggest barrier for us to redevelop them has been environmental issues," Granholm said.

"We have a work force that is second to none. We're hungry and we can make a very good business case to come to Michigan."

Granholm said the state negotiated with the Obama administration in recent weeks and is confident it will be getting enough money to clean up the sites.

Older than GM

Ed Montgomery, the White House point man on auto communities, said revitalizing the Buick City site was one of his top priorities.

"This is an iconic site that we want to see reused to create new jobs," he said.

As a manufacturing center, Buick City is older than GM itself. Production began there in the 1890s and it produced military equipment during World War I and World War II.

Buick Motor Co. moved to Flint in 1903 and became a division of General Motors when the corporation was formed in 1908.

In 1999, the last Buick -- a LeSabre -- rolled off the line at its landmark facility; most of the plant was demolished in 2002.

During its lifetime, 15.8 million Buicks were built at the Flint complex.

The Buick City closure was a hard pill for Flint.

In the late 1970s, GM employed nearly 80,000 people in the area -- with nearly 30,000 at Buick City -- then the largest UAW local in the United States.

Today, GM employs about 7,000 workers in and around Flint.

GM may add a shift at its truck plant in Flint that could create more than 500 jobs as it consolidates.

Most of the reclamation work will take place in 2011. Teams will conduct sampling at the site this fall and winter, and contractors will submit a cleanup implementation plan in the coming months.

The plan also requires groundwater monitoring of the site -- likely for decades.

The Buick City site includes lead-contaminated soil -- concentrated in six hot spots -- that must be removed. EPA plans to update the status of its cleanup plan for the north parcel of land at a meeting with neighbors in June.

Deed restrictions will be included at the site to prevent excavation in areas where high lead levels have been found. Another contaminant to be removed is a petroleum-based product that's difficult to get out that will be extracted in a multi-phased plan.

From The Detroit News: http://www.detnews.com/article/20100519/AUTO01/5190378/1148/auto01/Feds-devote-$800M-to-clean-up-abandoned-GM-sites#ixzz0oNVgkaC8

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Old GM plants may lure energy companies

$836-million Obama plan would attract firms to state

BY JUSTIN HYDE AND TODD SPANGLER

FREE PRESS WASHINGTON STAFF

WASHINGTON -- Leftover and abandoned factories from the remnants of General Motors' past could be used to lure new builders of energy-efficient technology to Michigan under the $836-million plan revealed Tuesday by the Obama administration.

The trust fund, which has to be approved by the U.S. Bankruptcy Court in New York, will see Michigan get $161 million for its old GM sites, such as Buick City in Flint, the Pontiac Centerbridge campus and the site of the former Lansing Oldsmobile plant.

President Barack Obama, speaking in Youngstown, Ohio, said the trust is a "landmark agreement to help dozens of communities like Youngstown revitalize and redevelop."

Ed Montgomery, the administration official overseeing aid to cities hit by the auto industry's downturn, said the pact was "the largest environmental remediation trust agreement in the nation's history."

"These former assets can be returned to you the citizens, as productive places," Montgomery said at a summit on auto-dependent cities organized by the Brookings Institute.

The Obama administration said the fund would be used to clean up sites in 14 states. Of the 89 sites covered by the plan, 57 are in Michigan, although several locations such as the historic Willow Run plant in Ypsilanti are divided into multiple sites.

In addition to the $536 million for environmental cleanup, the plan would provide $300 million for other costs.

Gov. Jennifer Granholm said the fund would not just ease the burden on the state's finances, but give it an edge in recruiting new companies to brownfield sites.

"This will enable us to do clean-up and recover the properties for specific employers," she said.

Granholm also said while the clean-ups paid for by the trust might take years to complete, having the money there would ease concerns of potential users who have been worried about environmental liabilities.

In addition to manufacturers, Granholm said the sites could be used for technology incubators -- although she added the state would pursue firms such as General Electric.

The plan must be approved by state officials and the bankruptcy court overseeing Motors Liquidation, the old GM left behind following the sale of new GM to the U.S. government and the health-care trust fund for UAW retirees.

The trust would use no new government money. Motors Liquidation was given $1.2 billion for wind-down costs by the U.S. Treasury as part of GM's bankruptcy in 2009, along with 10% of new GM's equity and warrants for an additional 15% should claims against it total more than $35 billion.

link:

http://www.freep.com/article/20100519/BUSINESS01/5190364/1331/Old-GM-plants-may-lure-energy-companies

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