Corporate Divestiture and Redevelopment of Prime Manhattan Real Estate Made Possible by TRC Exit Strategy

New York Brownfield

A major public utility operated a steam and power generating plant on prime waterfront Manhattan real estate for more than 150 years. The plant is part of a nine-acre site that includes an old office building and large underground fuel storage. As one of the largest brownfield redevelopment sites in the nation, the New York Times described it as a "developer’s dream."

To make that dream a reality, the site needed to be remediated from the impacts associated with coal and fuel oil, urban fill, and PCBs—which it had been exposed to during its many years in service. When a developer offered to buy the property for over $600 million, neither the buyer nor seller could accept the risks associated with resolving the environmental liabilities and the schedule for regulatory approval to ensure on-time site delivery to the developer.

TRC worked with the owner and the developer to assume complete liability for the cleanup and delivery of the site to the developer. For a fixed price, TRC took on the environmental responsibility for the project, including decommissioning the site, removing asbestos and lead paint, demolishing the plant, and returning the site to a condition approved for mixed-use development. TRC negotiated a voluntary consent order with the regulatory agencies to protect the developer from any future liability for environmental conditions at the site. The site remains on-schedule for demolition, cleanup, regulatory review, and delivery to the developer.

When the project is finished, New York City will have a new waterfront development with five million square feet of office, residential, and retail space. TRC will continue to provide annual monitoring and maintenance to ensure on-going compliance with the closure requirements.

TRC Exit Strategy Solutions
Exit Strategy provides an effective solution to facilitate real estate redevelopment and reuse after the clean up of industrial sites.

• Facilitated a complex real estate transaction
  Exit Strategy became the mechanism to resolve environmental uncertainty without distracting from the other complex asset transfer issues.

• Provided environmental cost certainty for the developer’s economic assessment
  Even though the site was not completely assessed, TRC performed an evaluation program that provided a fixed price solution to the uncertain environmental closure process. TRC assumed all of the environmental risk associated with achieving closure for a mixed-use development.

• Provided a schedule satisfying both the owner’s and the developer’s needs
  TRC worked with the utility company and the developer to address the unique circumstances associated with transforming the property. The owner’s departure from the site, as well as the developer’s access to the site in a “clean” state, were phased to meet the requirements of the redevelopment.

• Generated community support
  By working with the local Community Board and City Council, TRC obtained the necessary support to implement its environmental closure action plans. TRC continuously participates in open meetings and provides website access to reports and progress.

1850
Manufactured gas plant begins operations

1920s
Plant transformed into an electric and steam generating facility and a 500,000 square foot office building is added

1990s
Owners and the New York Department of Environmental Conservation work to develop new plans for the site

November 2000
TRC selected through a competitive process to perform remediation

2003
Real estate developer will begin development of land

2006
Waterside community will be open to the public