December 02, 1999

Judge OKs transfer of Avtex property

By: Michele Sullivan

A U.S. Federal Bankruptcy Court judge in Reading, Pa. cleared the way on Nov. 23 for the Front Royal/Warren County Economic Development Authority to acquire the 440 acre Avtex Superfund site for redevelopment.

Judge Thomas Tardowski approved the transfer of property from the bankruptcy trustee, subject to the ratification of the prospective purchaser agreement. The town and county must both ratify the agreement, which provides liability protection to the community from any past problems at the site, said EDA Chairman Rick Novak.

Novak said the town and county are scheduled to ratify the agreement on Dec. 15. Closing on the transfer will take place soon after— by the beginning of the new year, Novak said.

The EDA intends to develop the property into a model business park, with commercial and light industrial businesses , a hotel/conference center, and recreational and open space. Novak said the project will begin immediately after settlement with renovations to the main entry building on Kendrick Lane.

FMC wants to lease part of the building for office space while the cleanup continues, another 5-10 years, Novak said. The EDA plans to move its offices into another portion of the building, and use some of the space for a community meeting room.

EDA Executive Director Stephen Heavener predicted the renovation would cost several hundred thousand dollars, but no bids have yet been solicited, Novak said.

"That’s simply an educated guess."

However, he said, the EDA will be "under the gun" to get that project rolling , since FMC wants to occupy its space by the beginning to the middle of summer.

Obtaining control of the property is not the culmination of the Avtex saga in Warren County, Novak said— it’s just the start.

"The challenges are just beginning," he said. "This was a long process to get the property released and now the work is beginning. We will go to work on making this a first class commercial and industrial development."

Novak also said the park will be a national "poster child" for how once-toxic sites can be redeveloped into useful land.

"This is a pilot program that is unprecedented in the nation, of how redevelopment can occur in concert with cleanup," he said.

The contract that was approved last week calls for an immediate payment of $60,000 to Anthony H. Murray Jr., the bankruptcy trustee, at closing.

The next payment, also $60,000, will be made to Murray when properties are being sold in the redeveloped park— in five years or so.

As park development intensifies, another payment will be required— this one, $2 million, which will go to FMC Corp., the owners of the Avtex site when it was closed by the state attorney general in 1989 after dozens of environmental violations.

The balance of the net proceeds from the 20-year build-out— projected to be about $500,000— will be split, Heavener said: 3 percent will go to the bankruptcy trustee, and 87 percent will be divided between the Environmental Protection Agency and FMC Corp., as reimbursement for costs incurred in the Superfund cleanup of the site.

The EDA will be allowed to keep 10 percent of the net proceeds. Somewhere around $50,000.

Before the proceeds are split up, however, EDA will be reimbursed for administrative and marketing costs, and the cost of securing liability insurance for the property’s redevelopment.

Warren County, the Town of Front Royal, and EDA are also required to fund site remediation that is not covered by the EPA Superfund activity. That means the localities will be responsible for removing asbestos from the still standing buildings, demolishing them, and disposing of the remaining waste.