For sale: Bankrupt sulfuric-acid plant on land that is subject to the Georgia superfund law requiring cleanup of metals and volatile organic compounds in the soil and groundwater, a former municipal landfill and a trash incinerator, a former wastewater-treatment plant and five effluent-settling ponds. Bidding starts at $30 million.
The sales pitch may not describe the ideal property, but an uncommon financial arrangement is drawing offers with sufficient money to cover the cost of a complete environmental cleanup. The deal could be sealed later this year.
Ordinarily, when the owner of a toxic site disappears or goes broke in Georgia, state taxpayers get stuck with the cleanup costs. There are so many waiting to be addressed, more than 60 around the state, that correcting the environmental damage is put off for years.
"We don't have funding to do all the sites we have," said Keith Bentley, chief of the Georgia Environmental Protection Division's land branch.
That's why the sale of the Tronox Limited site in Savannah is so interesting.
“The situation is a little unusual because of the status of the property," Bentley said.
The nearly 1,500-acre parcel is bordered by the Savannah River, state-owned historic Fort Jackson and East President Street in a section of industrial plants.
A company called Kerr-McGee processed titanium dioxide, a chemical used in whitening products from paper to plastics. It also made acid in a separate plant on the site. From 1921-53, the City of Savannah used the parcel's Deptford Tract as its municipal garbage landfill, and from 1985-2008, Savannah Energy Systems Co. ran an incinerator that turned city garbage into power for the plants on site.
The Great Recession brought the company down, prompting it to merge, then split off into a separate company called Tronox with the Savannah operations and others across the country needing large, environmental cleanups.
Being stuck with all of the cleanup costs swamped Tronox, which went broke.
A federal bankruptcy court in New York divided up the assets, leaving the Savannah site and $2 million in cash in the ownership of a trust created just for that purpose, the Greenfield Environmental Savannah Trust. The state and federal government are the beneficiaries of the trust.
An experienced real-estate professional in Utah manages the trust named Marc Weinreich who is confident his plan will work soon.
"We're hired to make things happen," he said.
He started by convincing the bankruptcy judge to let him keep operating the acid plant. It saved two-dozen jobs, generates cash for the environmental cleanup, and makes the site more attractive to industrial buyers than a boarded-up facility.
Next, he looked at the property's assets: an operating acid plant, a sophisticated laboratory, existing rail, electricity, highway and port proximity, favorable zoning and a trained work force in the area.
It even has some unique environmental positives.
“One of the intrinsic features of the property is an existing salt-marsh, mitigation bank that is ready to be established," Weinreich said.
Mitigation banks are raw land in which owners sell the development rights to other developers wanting to drain wetlands for their own projects. Government regulations require developers to preserve an equal amount of wetlands somewhere else to mitigate the environmental changes their construction causes.
Freshwater mitigation banks are so common that the value of the credits they sell to developers is low. Saltwater mitigation banks, though, command higher prices because there are so few of them.
Another environmental plus on the site is sunshine. The trust convinced the U.S. Environmental Protection Agency to conduct a renewable-energy feasibility study.
“The RE-Powering America's Land Initiative is not just about using these sites for energy production but using these sites to re-energize communities,” said Mathy Stanislaus, assistant administrator for EPA’s Office of Solid Waste and Emergency Response. “These studies are the first step to transforming these sites from eyesores today to community assets tomorrow.”
The study found that the site could support a hefty, 8.5 megawatt solar farm by mounting solar panels on the concrete capping the hazardous soils. It recommended using the electricity in the processing plants on site since current prices would result in a loss if sold to Georgia Power Co.
The utility's spokesman John Kraft said Thursday he didn't think the company had been in contact with anyone interested in building a solar farm there.
"Georgia Power is happy to work with customers in evaluating solar at their facilities, and we recently trained numerous solar consultants throughout the state specifically for that purpose," he said.
Besides the acreage's assets, there's that whopping cleanup hanging over the property. To keep that from scaring away interested buyers, the trust is making use of Georgia's brownfield law which allows a developer to avoid taking over the previous owner's environmental liability as long as the property gets fixed.
Weinreich estimates that the eventual sales price, once all the upward bidding finishes later this year, will more than cover the cleanup costs. Anything left over will go toward cleaning up additional Tronox sites in 21 other states.
The first bidding round was in February when all the bidders had to put 5 percent in an escrow account to prove they are serious. Now, they're preparing for the next round when they'll compete to top each other.
Meanwhile, the trust is demolishing some vacant buildings. It and the city have already completed the cleanup of the old municipal landfill, after the city agreed to put up $1 million to match what Tronox and Kerr-McGee has already spent.
The state Environmental Protection Division had already accepted a framework for a study of what's needed in the cleanup plan for the whole site before the bankruptcy.
So far, things have gone so smooth that local environmental activists admit to paying little attention to the huge site.
“In all honesty, I haven’t heard much about it," said Steve Willis, president of the Center for a Sustainable Coast and vice chair of the Georgia chapter of the Sierra Club.
Instead, they've worried about the deepening of the Savannah River, expansion of Plant Vogtle, and proposals to build a cruise-ship port and to increase shipping of liquefied natural gas.
“I think all of those things took people’s attention away from what is going on in the lower Savannah," he said.
While a trust isn't a common financial structure in Georgia for hazardous-waste sites -- especially a trust that oversees the running of a commercial plant -- Weinreich's company has handled hundreds of them across the country. Trusts remove the friction between property owners, government regulators and environmentalists that typically creates a logjam that bogs down site cleanup, he said.
“We’re not traditional real-estate developers. We don’t look to make our children’s college tuition out of developing a property. We keep our eye on what the goal is, which is protecting the public and the environment," he said. “... We have found the trust structure to be very effective in achieving results.”