New owner begins asbestos removal at B.C. Cobb in Muskegon

bc-cobbMUSKEGON, MI – The B.C. Cobb power plant property changed hands in October and work to bring the structure down is getting started.

While not visible to the passerby, Forsite Development is working diligently to bring down the power plant and smoke stack at the 115-acre B.C. Cobb property at the east end of Muskegon Lake.

“Once it starts, it’s going to move quickly,” said Tom McKittrick, Forsite founder and president. “It’s got our full attention.”

After about 14 months of bidding and negotiating, the North Carolina company took ownership of the property on Oct. 18. Forsite received the property and $1 million from Consumers Energy.

B.C. Cobb was shuttered in April 2016 after 67 years of operation.

Consumers spent about $22 million to shut down B.C. Cobb, said Roger Morgenstern, Consumers’ senior public information director, in April. Costs included disconnecting the plant from the power grid, removing bulk materials from the property and reconfiguring a still-operating substation.

Forsite has until October 2019 – two years – to completely remove the plant.

But the goal is to finish within 18-20 months, McKittrick said. The “mobilization process” has begun.

Inside, contractors are prepping for asbestos abatement, he said. Abatement will take about 6-8 months.

“There’s a lot of work to do inside first,” McKittrick said. “Next summer, people will start to see activity out there.”

Forsite’s redevelopment plans include converting the site into a deep-water marine terminal operated by Verplank Dock Co. for cross-Lake Michigan shipping. Forsite is working with Muskegon-area economic development officials to identify land for a sister industrial park for new players that could take advantage of the logistics route.

Finding a large enough parcel of land for an industrial park inside the city of Muskegon has proven difficult, McKittrick said.

But he’s confident that the park would attract food processors that could take advantage of Muskegon’s unique attributes: proximity to agribusiness and cross-Lake Michigan shipping, and Muskegon County’s abundance of waste water treatment capacity.

By October 2019, the former B.C. Cobb plant site will be cleared of buildings.

“It could look more like stacks of shipping containers or bulk material piles,” McKittrick said. “New buildings are very difficult to build on that site because it’s effectively sediment.”

B.C. Cobb is built on 300-foot deep pilings that go down to bedrock, he added.

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Charlotte’s Forsite strikes $62 million deal tackling shuttered coal plants

pier-at-cobb-coal-plant_320xx4276-2400-1213-0Tom McKittrick’s Forsite Development has kicked off a new line of its brownfields redevelopment business with a $62 million deal to take on the environmental liability of two large coal plants in Michigan.

Consumers Energy, the state’s largest electric utility, has paid Forsite to take control of the B.C. Cobb plant in Muskegon, Mich., and the J.R. Whiting plant in Luna Pier, Mich. The deals are “environmental liability risk” contracts in which Fosite gets the property (about 410 acres between the two sites) but also takes on the liability for cleaning up the sites.

“We’re responsible for decommissioning the properties and closing out all the environmental conditions on site,” says McKittrick, whose Charlotte-based development company has been involved in the redevelopment of industrial and environmentally challenged properties for years. “Almost all of our business has evolved (now) into environmental liability risk-transfer deals.”

And most of the focus is on former coal plants, where McKittrick sees enormous opportunity.

“You have all these shuttered coal-fired utility plants coming off line at one time,” he says. “Now we are literally talking to utilities all over the country about this model for them to divest their coal plants and put them in someone’s hands for redevelopment.”

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Economic development
Forsite makes its money off the eventual development of the sites. But McKittrick says the company also sees opportunity to make money in the initial transaction.

“We have to be compensated for the risk we take,” he says. “We’re hoping there is some arbitrage between the decommissioning cost and what we are paid for the project.”

Roger Morgenstern, public information director for Consumers, says his utility closed the two coal plants (and a third not involved in the deal) in 2015. It asked for proposals from companies that would redevelop the land into something that created economic opportunity for the communities where the plants had been important employers.

The company also wanted developers that would take the environmental liability, to protect their customers from potential price shocks. Consumers estimates that ending its liability through the Forsite deal will ultimately save its customers about $31 million over the utility doing the demolition and remediation itself.

Shipping plan
As for economic development, McKittrick proposed a project at Cobb that will make use of a pier capable of serving 1,000-foot container ships. The plant had used the pier for coal deliveries. But Forsite proposes developing it as a port for food processors that need a way to ship product west from Muskegon but want to avoid delays at the crowded Chicago shipping lanes.

Morgenstern says that from the Cobb pier, there is a trip of some 83 miles across Lake Michigan to the port of Milwaukee. McKittrick says that route can cut up to three days out of the logistics run for food processors by going around Chicago.

McKittrick says that pier and shipping channel form the heart of the redevelopment plan for Cobb. He believes the Cobb site and some additional land nearby can be redeveloped as an industrial site for new food-processing companies to move into the region.

Morgenstern says that fits well with the local economy. Agriculture is second only to the auto industry among Michigan’s top businesses, he says.

Plans for the Whiting site are not as fully developed. But McKittrick is looking at the possibility of an inter-modal transportation site there because the plant has facilities to accommodate 360 rail cars on site (Morgenstern says all coal came by rail to that eastern Michigan plant) and is just off Interstate 75. That makes it an excellent site for rail-to-truck shipping.

Risk-transfer deals are new for Forsite, but McKittrick says they are a natural outgrowth of the brownfields business that had become the company’s bread and butter.

In what may be Forsite’s best-known project — the self-styled eco-industrial ReVenture Park near Charlotte — Forsite did not take on the environmental liability. That 2013 project to redevelop the former Clariant Corp. industrial site in Mount Holly into an industrial park focused on environmental sustainability, followed what had been Forsite’s policy. In that deal, Clariant continues to be liable for the environmental remediation.

Dipped its toes
Although Forsite did not assume liability on most of its brownfields projects, McKittrick says, the company became increasingly familiar — and comfortable — with environmental remediation in the course of that work.

Then starting in late 2015, Forsite dipped its toes deeper in the risk-transfer waters with the purchase over the next several months of three small coal plants in eastern North Carolina.

The plants — one 32 megawatts and two 35 megawatts — were former merchant plants previously owned by Charlotte-based Cogentrix.

McKittrick says there was not any significant environmental liability at the plants. He said it was basically a matter of cleaning up the coal yards and dealing with some underground storage tanks.

But he says he saw the potential for more involved deals for large coal plants.

Bigger deals
Consumers had closed the 300-megawatt Cobb plant and 330 megawatt Whiting plant in April 2016. That summer, it advertised for proposals and McKittrick got involved. Consumers chose Forsite in April and the deal closed Oct. 16. McKittrick thinks this is the model for most of Forsite’s deals in the future.

“We are focused almost exclusively on acquiring and developing shuttered coal plants,” he says. “Now that we have been in a deal with a large utility, I think we have an incredible amount of opportunity.”

None of the deals to date have involved taking liability for the coal-ash ponds on the plant sites. McKittrick says he believes Forsite could do such a deal, though it would probably steer clear of high-risk ash ponds near rivers and lakes. Though he did not say, that would make it unlikely he could do a deal with Duke Energy, for instance, in the Carolinas.

But he does believe he could do larger coal sites even than those in the Consumers deal. He says Forsite is slated to go out West shortly to do some initial work on a possible deal involving a 2,400-megawatt plant.

“The bigger the better for us, actually,” he says.

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EPA Recognizes North Carolina Department of Environmental Quality for Property Reuse Achievements at Superfund Sites

WASHINGTON (November 7, 2017) — The U.S. Environmental Protection Agency announced today that the North Carolina Department of Environmental Quality (NCDEQ) has received EPA’s “Excellence in State Engagement Supporting Reuse Award” for the agency’s ongoing commitment to support redevelopment and community revitalization.

The U.S. Environmental Protection Agency announced today that the North Carolina Department of Environmental Quality (NCDEQ) has received EPA’s “Excellence in State Engagement Supporting Reuse Award” for the agency’s ongoing commitment to support redevelopment and community revitalization.

“NCDEQ is being lauded for their innovative approaches to support the reuse of Superfund Sites across the state,” said Trey Glenn, EPA Regional Administrator for the Southeast. “North Carolina’s strategic thinking has helped return blighted properties to beneficial use, and provide environmental as well as economic benefits for its citizens.”

EPA created the award to recognize state partners whose work supporting the reuse of Superfund sites has led to lasting benefits that enhance community quality of life and ensure the long-term protectiveness of site remedies and stewardship of the environment.

This award recognizes the NCDEQ for promoting redevelopment at contaminated sites through the innovative use of Geographic Information Systems to provide information for potential developers on site use limitations.

Additionally, NCDEQ played an important role in facilitating the redevelopment of the Martin-Marietta, Sodyeco, Inc. Superfund site 10 miles west of Charlotte, N.C., into ReVenture Park, a business park focused on energy efficiency, renewable energy and environmental technology.

Finally, NCDEQ’s involvement in the cleanup and reuse planning processes at the Ecusta Mill Superfund site in Pisgah Forest, N.C., resulted in the site becoming a model for reuse of formerly contaminated industrial sites. Cleanup is ongoing at the site but plans are in place to redevelop the property in a multi-use, residential, commercial and green space village that will complement downtown Brevard, N.C.

More information about this award can be found on EPA’s website at: https://www.epa.gov/superfund-redevelopment-initiative/state-excellence-supporting-reuse-award

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Muskegon Lake’s transition

B.C. Cobb Power Plant today

Consumers Energy is in the process of divesting the 115-acre Cobb site to Forsite Development of North Carolina. The developer plans to demolish the power plant, and replace it with a deep-water marine terminal operated by Verplank Dock Co. for cross-Lake Michigan shipping — likely to the port of Milwaukee. The state of Michigan must approve the sale; it could be fall before it takes action.

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Investments coming to Muskegon County

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