CCP 01-13-2009 (3) - Laserfiche WebLink

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Railroad Memo January 9, 2009 Page 3 During the course of the negotiations, MT Properties requested City indemnification against any future third party claims related to hazardous substances on the Butcher's Spur. City staff and legal counsel rejected this concept outright, arguing that the City is purchasing polluted land and remediating the property as a voluntary party. At that point, the railroad responded with a request for indemnification against third party claims, but only to the extent the City fails to implement the RAP's. In other words, if the City proceeds with the clean-up plan as approved by the MPCA, the indemnification would not apply. If the City fails to implement the RAP, the indemnification would apply. There is one caveat to this provision: the City is not indemnifying the railroad with respect to the removal of buried contamination and infrastructure on the former NW Refinery site. The MPCA requested that the City suspend the clean-up on this portion of Phase 2 until it completes negotiations with Ashland Oil, the responsible party. The City's approved RAP stipulated that any contamination or underground infrastructure would be left in place and capped with clean soil. The City is not in a position to pay for the costs that are above and beyond the approved RAP. These provisions have been reviewed with Sue Steinwall, our environmental attorney at Frederickson & Byron. One of the other issues that railroad requested (which resulted in the recommendation to table action on December 9, 2008) was to be included as a co -addressee on a Technical Assistance Letter (TAL) from the MPCA. A TAL is an advisory document issued by the MPCA once a voluntary clean-up is completed. However, it does not provide any type of liability assurance. Initially, staff and our attorneys were concerned that such a request would create confusion at the MPCA, since this type of document is rarely issued to a Responsible Party (like the railroad) that do not participate in the environmental clean-up. After consulting with the MPCA, we have been told that a TAL could include the railroad once the clean-up is completed. The City will still seek liability assurances at a later date, which will not include the railroad. A such, this issue no longer seems to be a stumbling block to closing. Billboard MT Properties has a lease for a billboard near the railroad bridge that crosses I -35W. The railroad wanted to keep the billboard until the City needs the land for a future Transoma expansion. The City's redevelopment agreement with Transoma calls for the billboard to be removed upon acquisition of the railroad land. The City has been in contact with Ryan Companies (Ryan) about an extension to the removal date. Ryan has indicated that they would agree with an extension through September 30, 2009. In the event the City is unable to secure a written commitment from Ryan by closing, the City would compensate the railroad for $13,375. This amount represents the value of the lease. The license agreement with MT Properties allows the billboard to remain in placed through September 30, 2009, unless it must be terminated earlier. The amount compensation to the railroad would be pro -rated on a monthly basis. MT Properties would be responsible for all costs associated with termination of the lease and removal of the billboard.