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$2.6 million settlement with OMC bankruptcy estate; separate agreement with Waukegan helps revitalization

Release Date: 3/22/2005
Contact Information:

CONTACT:
(EPA) Mick Hans, (312) 353-5050
(EPA) William Omohundro, (312) 353-8254
(DOJ) Ben Porritt, (202) 514-2007
(IL AG) Melissa Merz, (312) 814-2518
(IL EPA) Maggie Carson, 217-558-1536

For Immediate Release
No. 05-OPA029

CHICAGO (Mar. 22, 2005) — U.S. Environmental Protection Agency Region 5, the state of Illinois and U.S. Department of Justice announce two settlements involving cleanup at Waukegan Harbor.

One is a $2.6 million agreement with Outboard Marine Corp.'s bankruptcy estate to help pay for additional Superfund ground water cleanup at OMC's Plant 2 site in Waukegan, Ill. The second settlement, a supplemental consent decree with the city of Waukegan, ensures the continued operation and maintenance of containment cells on the Plant 2 site.

"Together, these two settlements clear the way for the city to purchase and eventually to redevelop the site and the broader harbor area," said EPA Acting Regional Administrator Bharat Mathur.

"These settlements once again show the value of partnership between the United States and the state of Illinois, which have combined to address severe contamination in Waukegan Harbor through a series of enforcement actions and settlements over the years," said Assistant Attorney General Tom Sansonetti. "The agreements will not only continue successful cleanup of the harbor, but will also open the door for economic revitalization of the city's lakefront."

EPA and the state have a long history of involvement at the 75-acre OMC site. Part of the site was placed on the Superfund National Priorities List of hazardous waste sites in 1984 due to the presence of widespread PCB contamination in Waukegan Harbor. EPA and the state later filed a civil action against the OMC, which resulted in a consent decree requiring a $20 million harbor cleanup. OMC performed the cleanup during 1992-93, and under the decree, placed contaminated sediment and other waste from the cleanup in containment cells on its Plant 2 property. OMC thereafter operated and maintained the cells.

OMC declared bankruptcy in 2000, selling off most of its assets and halting its environmental oversight work including its operation and maintenance of the containment cells. The estate was not able to sell Plant 2 and petitioned for legal abandonment in 2002, which the government opposed due to the environmental hazards remaining at the site. Subsequently, EPA and the state reached a settlement in 2002 requiring the estate to perform a limited amount of emergency cleanup work at Plant 2 and to pay EPA $221,250 to fund further work prior to abandonment of the site. Separately, EPA and the state also filed a civil complaint in 2002 seeking the cleanup of chlorinated solvents in the ground water beneath Plant 2.

Under the settlement of the governments' civil complaint, the OMC estate will place $2.6 million in a Superfund special account to be used toward cleanup of the ground water beneath Plant 2. In addition, the agreement grants EPA and Illinois EPA allowed unsecured claims against the estate totaling approximately $2 million.

The supplemental consent decree, which is being lodged for public comment with the U.S. District Court, frees Waukegan from future liability for the existing, historic contamination at the now-unoccupied Plant 2 site enabling potential redevelopment for the broader lakefront area. In return, the city will operate and maintain the containment cells and buildings on the site to prevent environmental problems from occurring in the future. In addition, the agreement addresses the possibility of a windfall to the city upon the sale of the site attributable to the government cleanup, and reserves the government's ability to dedicate any windfall funds to future required cleanup at the site.

"These settlements put an end to lengthy litigation and allow the important work of cleaning up property located on Lake Michigan to move forward," said Illinois Attorney General Lisa Madigan. "Ultimately, the people of Waukegan will reap the benefits."

Illinois EPA Director Renee Cipriano said, "The settlement is another important step toward erasing the scars of chemical contamination from the Waukegan lakefront and protecting our precious Lake Michigan water resources."

In another recent action, on Oct. 13, 2004, EPA and the state settled with four private parties and the city for soil and ground water cleanup of the Coke Plant site, a 36-acre parcel of land next to Plant 2 in the harbor complex, and also part of the broader potential lakefront redevelopment area.

Site documents are available for review at the reference desk of Waukegan Public Library, 128 N. County St.