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HomeMy WebLinkAboutMINUTES - 03032009 - C.57RECOMMENDATION(S): AUTHORIZE the Redevelopment Director to deposit into the Helix/Union Pacific Remediation Account with Bank of America an amount not to exceed $1,250,000 in fulfillment of obligations set forth in a November 5, 1997 Settlement Agreement between the Union Pacific Railroad Company, the Hookston Group, the County and the County Redevelopment Agency and an October 1, 1998 Settlement Agreement between the County, the County Redevelopment Agency and the Hookston Group (Budgeted Agency Funds) FISCAL IMPACT: No General Fund revenues are involved. The Redevelopment Agency has budgeted funds for the current requirement. BACKGROUND: In 1992, the County, using the Redevelopment Agency funds, acquired a portion of a former railroad right-of-way in the Hookston Station area of Pleasant Hill. The right-of-way was being acquired to preserve the former rail corridor for a future fixed guideway/transit use; for the Iron Horse Trail; and for a roadway connection between the Contra Costa Centre area and Monument Blvd. The Redevelopment APPROVE OTHER RECOMMENDATION OF CNTY ADMINISTRATOR RECOMMENDATION OF BOARD COMMITTEE Action of Board On: 03/03/2009 APPROVED AS RECOMMENDED OTHER Clerks Notes: VOTE OF SUPERVISORS AYES 5 NOES ____ ABSENT ____ ABSTAIN ____ RECUSE ____ Contact: Jim Kennedy, 335-7225 I hereby certify that this is a true and correct copy of an action taken and entered on the minutes of the Board of Supervisors on the date shown. ATTESTED: March 3, 2009 David J. Twa, County Administrator and Clerk of the Board of Supervisors By: Katherine Sinclair, Deputy cc: C.57 To: From:Jim Kennedy, County Redevelopment Director Date:March 3, 2009 Contra Costa County Subject:Hookston Station Hazardous Materials Remediation BACKGROUND: (CONT'D) Agency was to fund the roadway project; therefore the Agency funded the property acquisition of behalf of the County, the legal owner of the subject property. The roadway element has since been dropped from consideration as a planned roadway. The Agency has funded the construction of the Iron Horse Trail in the subject corridor and the County continues to preserve the corridor for future fixed guideway/transit. The seller of the property, a group of individual investors (Dan & Mary Lou Helix, John Hook, Steven Purcell, and Nancy Ellicock) is referred to as the Hookston Group. The Hookston Group had acquired the right-of-way between Hookston Road and Mayhew Way as part of a reversionary transaction from the Southern Pacific Railroad Company. In the County’s acquisition of the right-of-way steps were taken to protect the County from liability related to the removal of identified surface and sub-surface contaminants. Subsequent to the County’s acquisition of the right-of-way chlorinated solvents (trichloroethylene) were determined to exist in the groundwater. Prior testing had not revealed their presence. Some of the contamination is suspected to have come from a prior tenant of the property during the tenure of Southern Pacific’s ownership. The County/Agency joined the Hookston Group in filing suit against Southern Pacific related to the groundwater contamination. Effective in November, 1997, the County, the Agency, the Hookston Group, and Union Pacific Railroad Company (now the successor to Southern Pacific) entered into a Settlement Agreement to resolve the federal lawsuit. In general, the Settlement Agreement assigned financial responsibility for remediation to the parties as shown in Table 1 below: Table I Remediation Cost Amount/Party 1 The first $3 Million $1.5 Million – Union Pacific $1.5 Million – Hookston Group 2 The next $1 million (total $4 million) $500,000 – County/RDA $500,000 - Union Pacific 3 The next $1 million (total $5 million) $500,000 – County/RDA $500,000 – Union Pacific 4 The next $1 million (total $6 million) $250,000 – County/RDA $250,000 - Hookston Group $500,000 - Union Pacific 5 The next $1 million (total) $7 million $250,000 – County/RDA $250,000 - Hookston Group $500,000 - Union Pacific 6 The next $1 million (total $8 million) $250,000 – County/RDA $250,000 - Hookston Group $500,000 - Union Pacific 7 The next $1 million (total $9 million) $250,000 – County/RDA $250,000 - Hookston Group $500,000 - Union Pacific 8 The next $1 million (total $10 million) $250,000 – County/RDA $250,000 - Hookston Group $500,000 - Union Pacific The parties owning the property during the time period contaminants are suspected to have been introduced to the groundwater were given the primary role in funding remediation. The County was assigned a subordinate role in funding remediation. The County, the County Redevelopment Agency, and the Hookston Group also entered into an additional October 1, 1998 Settlement Agreement to further clarify remediation funding responsibilities as outlined above. The parties have engaged in a process to develop and obtain regulatory agency approval of a remediation plan. The remediation plan has been approved by the Regional Water Quality Control Board, and is ready to be implemented. Based on records available to County staff, as of February 11, 2009, a total of $5,451,389.20 has been expended for hazardous materials remediation related to Hookston Station. Costs incurred to date have been paid from an escrow fund jointly established and funded by contributions from Union Pacific and the Hookston Group as described in Table 1 above. The recommended action will permit staff to respond to anticipated cash calls over the next 12-24 months to deposit funds required by the Settlement Agreement into the joint escrow account. The work completed to-date has permitted the parties to achieve approval from the State Water Resources Control Board, and to complete initial remediation work. The major remediation work over the next 12-24 months will be the installation of a permeable reactive barrier in the ground at a point where it will intercept contaminated groundwater, and remove the contaminants. A contract with ERM West, Inc. in the amount of $3,354,418 for this work was approved by the Redevelopment Agency/Board of Supervisors on January 27, 2009. Completion of the remediation work will be determined when specified threshold levels of contamination have been achieved. Once installed, the remediation work will largely consist of monitoring and reporting, with some equipment maintenance. Current estimates suggest total remediation cost will be upwards of $10 million total.