6.C.(1) Environmental Testing Agreement (700 S. Lafayette)

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~ ~ ~ SOU7A ~" ~~ r °I Community & Economic Development ~ `.~^~-a2 1200 County-City Building, 227 West Jefferson, South Bend, Indiana 46601-1830 • Phone 574/235-9371 • Fax 574/235-9021 To: Redevelopment Com~mis~sion From: Ann Kolata~~~ ~~-~'"/~ Subject: Agreements Related to 700 S. Lafayette Date: March 17, 2009 There are two items on the Redevelopment Commission agenda related to the property at 700 S. Lafayette. This was the site of the former Transwestern Building that the Commission bought and demolished in the early 1990s. The Commission sold the property in 1995 to Design Packaging Inc. The business was sold several years later to Tecumseh Corrugated Cardboard Company although the real estate stayed under Design Packaging ownership. In ?005 Tecumseh was interested in purchasing the real estate and had a Phase II environmental site assessment conducted using an Indiana Site Assessment Grant to the City of South Bend. That site assessment reported that there were several areas where the fill dirt that was brought in for the building demolition had levels of metals that exceeded Indiana Department of Environmental Management (IDEM) standards. Apparently there were no regulations in the early 1990s to test fill dirt at the time of the building demolition. Tecumseh intended to purchase the real estate but never went through with the transaction. They eventually moved out of the building and the building has been vacant for the last couple of years. Late last year 3 G Properties entered into a purchase agreement with the building owner to buy the property and use it for River Bend Hose. This purchase agreement is contingent on the Commission agreeing to test soils at the property and remove soil that exceeds IDEM limits. We believe that there are two areas to test and remediate. This work is covered by the Environmental Testing and Removal Agreement with 3 G Properties. The purchase agreement is also contingent on the Commission approving an Environmental Indemnit~greement ~~~ith 3 G Properties. Our original transaction with Design Packaging included an Environmental Indemnity Agreement that lasted for ten years. This was amended to add Tecumseh Con•ugated Cardboard Company and extended for an additional five years. The Environmental Indemnity Agreement with 3 G Properties is a new document but provides essentially the same indemnity that was originally provided to Design Packaging. The tens of the agreement is ten years.