Reclaiming of urban areas across the country has city planners acknowledging what cement, aggregate and concrete operators have long known: Regardless of greenfield or brownfield label, riverfront property is prime. A good example of this trend has played out in Bay City, Mich., where four parties to three transactions involving two brownfields have walked away from the table with thumbs up.

From a cash-flow standpoint, the party realizing the most immediate benefit is Bay Aggregate, which has vacated a long-held, central Bay City site along the Saginaw River in favor of a bigger plot on the north end of town. “City officials began tossing ideas on redeveloping the area around our old plant 20 years ago,” explains Bay Aggregate President Dave Ives. “We knew relocation, voluntary or otherwise, would eventually happen, but did not have a suitable alternative property.”

Accepting an average of 10 minutes' additional truck time for its ready mixed and aggregate business, Bay Aggregate saw the potential in a property the City of Bay City put forward a few years ago. Formerly a BP Amoco aviation fuel storage site, the 100-acre plot along the Saginaw River (a Lake Huron inlet) offered ample space for a new central mixed plant, 1,550-ft. barge slip, and stockpiles to support annual distribution of 500,000-plus tons of conventional and speciality aggregate received from upper Great Lakes quarries.

Completed in spring 2003, the move greatly expanded the company's distribution capacity and coincided with a decision on a major capital investment in ready mixed equipment. “We compared the cost of relocating our old plant to the new site versus an additional premium of about 30 percent to build a new central mixed facility,” notes Ives. “Our customers prefer central mixed concrete. The new plant provides more product flexibility, and lowers our maintenance costs.”

Bay Aggregate selected BMH Systems, based near Montreal, to furnish a 175-200 yd./hour plant with a stationary, reversing drum mixer charging a single alley. The site affords optimal placement of the plant relative to aggregate handling, from adjacent stockpiles along the slip, and mixer and dump truck routing.

TRANSACTION

The land exchange that gave Bay Aggregate a new home netted the City of Bay City prime downtown property — adjoining a hotel and conference center — for future development. The incentives driving the transaction are rooted in the State of Michigan's forward-thinking brownfield redevelopment goals. Changes in Michigan environmental law have had an effect similar that of the federal Small Business Liability Relief and Brownfields Redevelopment Act of 2002 and related legislation in other states.

“Michigan is one of the first to move away from the ‘joint and several liability’ provisions of the federal Superfund act in favor of law that allows new buyers to take title to land without assuming liability for historical contamination,” notes Allen Reilly Jr. of Horizon Environmental Corp., Grand Rapids, Mich. “Amendments made in 1995 to Michigan's Natural Resources and Environmental Protection Act outlined measures prospective buyers of contaminated sites could take to shield themselves from liability and redevelop sites.”

Horizon Environmental represented Bay Aggregate on the two key measures: a) Baseline Environmental Assessment, establishing what contaminants existed, mostly from past fuel leaks and spills; and b) Due Care Requirements, specifying how Bay Aggregate would layout the plant and aggregate depot and operate without compromising $3 million-plus of remediation work BP took to make the site viable for another owner.

Bay Aggregate's relocation hinged on cooperation from a multinational energy company and a handful of state and municipal interests. “The only way the land transfer could work is if everyone came to the table willing to play ball,” Reilly contends. “The State of Michigan had to be willing to guarantee Bay City sufficient grants covering the redevelopment of Bay Aggregate's downtown site, and ensure that its Department of Environmental Quality would facilitate timely approvals and permitting. BP had to come to with a serious soil-remediation plan for the site, which would the allow Bay City to promote redevelopment. Bay Aggregate had to be business- and environmental-risk tolerant.”

All parties held up their end of the bargain. Another agency, Bay County Economic Development Corp., was involved in the BP property acquisition and temporary transfer to Bay City prior to Bay Aggregate assuming title.