Lackawanna Redevelopment Concept

Memorandum of Understanding

  This non-binding Memorandum of Understanding (MOU), dated as of the 14 day of April, 2005, is by and among the County of Erie ("County"), a municipal corporation of the State of New York with principle offices at 95 Delaware Avenue, Buffalo, NY; the City of Lackawanna ("City") , a municipal corporation of the State of New York with principal offices at 500 Ridge Road, Lackawanna, NY;  and Tecumseh Redevelopment, Inc. ("Tecumseh"), a C corporation of the State of Delaware, with principal offices at 4020 Kinross Lakes Parkway, Richfield, OH, and a subsidiary of the International Steel Group, Inc. (collectively, the "Parties").

WHEREAS, The creation of new jobs and the addition of property to the local tax base through the redevelopment of Brownfields is a critical priority for the City of Lackawanna and Erie County; and

WHEREAS, Tecumseh owns a parcel of land compromised of approximately 1,100 acres located in the City of Lackawanna on the west side of NYS Route 5, which was formerly used for the production of steel by the Bethlehem Steel Corporation (the "Property"); and

WHEREAS,  Solid and hazardous wastes were disposed in numerous solid waste management units (SWMUs) throughout the Property by previous owners; and

WHEREAS, Tecumseh is working to complete an ongoing RCRA Facility Investigation and is negotiating an Order on Consent with the New York State Department of Environmental Conservation (DEC) to undertake corrective measures at certain SWMUs on the Property; and  

WHEREAS,  The City and the County wish to see the Property redeveloped consistent with Tecumseh's Master Plan (attached hereto as Exhibit A) and all subsequent amendments to the Plan; and

WHEREAS,  Tecumseh believes that redevelopment goals outlined in the Master Plan are consistent with Tecumseh's plans to remediate the site and can be integrated with expected corrective action measures that will be required by the DEC; and

WHEREAS,  Redevelopment of the Property in a manner consistent with Tecumseh's anticipated cleanup obligations will promote the use and development of inter-modal facilities, mixed commercial/industrial uses, green energy facilities, and recreational uses with public lake front access; and

WHEREAS,  The redevelopment of the Property will maximize the utilization of benefits provided by the New York State Empire Zone program, tax credits available in the New York State Brownfield Cleanup Program and tax credits and tax incentives provided in the federal Community Renewal Tax Relief Act of 2000 and any other state and/or federal funding which may become available.

Now, therefore, the Parties have reached an understanding and state as

follows:

1.                        This MOU describes actions the Parties currently expect to undertake.  The Parties agree that under no circumstance does this document create in any Party or any other person or entity any obligation or right of any kind.  The Parties further intend and agree that this MOU is never to be used by any Party or other person or entity to be the basis of any claim against any Party or other person or entity.

2.            The Parties agree to work cooperatively to promote and implement the conceptual redevelopment plans for the Property as described in the Master Plan.  Tecumseh agrees to take into consideration the goals outlined in the Master Plan when designing and implementing the expected corrective action measures that will be required by the DEC. The Parties anticipate that it will be necessary to negotiate among themselves and with others to enter into agreements facilitating clean up and redevelopment of the Property and, ultimately, implementation of the Master Plan.  Future agreements that likely will be required include, but are not limited to, easements, rights of way and other real property interest conveyances necessary to facilitate certain significant components of the Master Plan, including:

a.      Relocation of existing railroad tracks along Route 5;

b.      Relocation of Smokes Creek by the US Army Corps of Engineers;

c.      Improvement of passenger and commercial vehicle access from the Property's development parcels to NYS Route 5;

d.      The installation of bicycle and pedestrian paths along the west side of NYS Route 5 and access to the Lake Erie shore.

3.            Tecumseh is committed to the construction of an on-site waste disposal area (Corrective Action Management Unit or CAMU) as shown on the Master Plan.  The CAMU, which is a key component of Tecumseh's remediation plans, will accept construction and demolition debris and contaminated fill that are generated by remediation and redevelopment activities on the Property and by activities undertaken in furtherance of the Master Plan.

4.            Tecumseh will continue its work towards the timely demolition of the coke ovens and other appropriate facilities on the Property. Site activities such as demolition, will be pursued on as expedited a schedule as business conditions support.

5.            The County of Erie will seek to provide a minimum of $10 million of public funds for infrastructure development (roads, water, sewers, lighting, public access and recreational facilities), which public funds are key to successful implementation of the Master Plan.

6.            The Parties will cooperatively undertake to maximize the benefit of current Empire Zone and Brownfields program in connection with commercial development anticipated in the Master Plan. To this end Tecumseh will, following City and County commitment of infrastructure funding, seek to enter the Brownfield Cleanup Program with DEC for the investigation, cleanup and redevelopment of Phase I (first 100 acres).  We envision that a Soil/Fill Management Plan will be developed as part of that program for impacted soil/fill excavated during infrastructure and building construction to be managed and disposed in the on-site CAMU by Tecumseh, thus controlling environmental liabilities and remediation costs. Following approval by DEC of the Phase I Cleanup Work Plan and any required pre-development remediation, the Phase I parcel or sub parcels of a minimum of 5-acres would be made available for redevelopment either on a fee title sale or long-term land lease.

7.            The Parties agree to explore ownership structures for the Property, including the possibility of public-private partnerships, that may further the goals and objectives of this Memorandum of Understanding.

8.            A primary goal of this MOU is to induce new development on the Property as soon as commercially and environmentally practicable.  The Parties will work cooperatively and diligently to solicit and keep each other informed of legitimate proposals for redevelopment.  To this end:

a.      Tecumseh will within 30 days commence preparation of a Generic Environmental Impact Statement (GEIS) for redevelopment of the approximately 300 acres fronting NYS Route 5 as a 3-phase Planned Unit Development (PUD) consistent with the Master Plan.

b.      Tecumseh will continue to entertain development, sale, lease and license proposals from qualified local and national real estate developers, real estate brokers, private and public entities for; minimum of 25-acre parcels in the Phase II & III PUD; and for the Property in total that are consistent with the Master Plan, current licensed uses and planned decommissioning, demolition, and corrective measures.  In the event that a developer or end user desires to purchase and develop the Phase I, II and/or III parcel(s) or sub parcel(s) prior to completion of a Brownfields Cleanup Program by Tecumseh, they will be required to fully indemnify Tecumseh from all environmental liability and purchase sufficient environmental liability insurance and/or demonstrate adequate financial capability to address all reasonably anticipated environmental conditions to the satisfaction of Tecumseh.  We envision that the same Soil/Fill Management Plan described in Paragraph 6 will be incorporated into said sale or lease agreements to facilitate timely and cost-effective management of impacted soil/fill and appropriate control of associated potential environmental liabilities to the satisfaction of Tecumseh.  Tecumseh shall be the sole judge of the acceptability of the terms and conditions of any and all sales, leases and licensed uses of its Property.

c.      Tecumseh will within 60 days post prominent signage that the Property is available for development, sale or lease.

d.      Tecumseh will within 90 days establish a web site with property attributes and contact information.

e.      The County and City of Lackawanna will have sole responsibility to review and approve or disapprove all redevelopment proposals on the Property that require: investment of County or City funds for infrastructure improvements; use of existing County or City infrastructure; or otherwise require City or County approvals.  The City and/or County must fully appropriate, encumber, and dedicate any and all requisite funds for said infrastructure improvements consistent with this MOU prior to Tecumseh entering any agreements with the City, County or third party buyers, developers, lessees, or licensees that rely on those improvements.

f.        The County will within 45 days seek to establish itself as Lead Agency for the GEIS.

g.      The County will within 30 days identify all public fund sources for infrastructure development and begin the process of securing said funds.

h.      The County will within 90 days identify sewer and water capacity that will be made available to the Property.

9.            The Parties recognize that press releases and news conferences regarding the Property should be issued/held with the prior knowledge, consent, and if appropriate, involvement of all Parties.

10.       When necessary, the County and Tecumseh will work cooperatively to complete any environmental reviews under SEQRA or NEPA relative to the Master Plan.  The County will be the lead public agency for environmental reviews pursuant to SEQRA and grant applications to third party public entities.  To ensure a coordinated effort to comply with SEQRA and NEPA, no party will submit funding requests related to redevelopment of the Property to any public entity without prior notice and discussion with other parties.

11.       The Parties will establish a Working Group to periodically provide input to refinements and revisions to Tecumseh's Master Plan.