Wisconsin Steel SiteProposed Settlement

DEPARTMENT OF COMMERCE

Economic Development Administration

[Docket No. 970310048-7048-01]

RIN 0610-xx03

Wisconsin Steel Site--Proposed Settlement

AGENCY: Economic Development Administration (EDA), Department of

Commerce (DoC).

ACTION: Notice of proposed settlement

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SUMMARY: The Economic Development Administration has agreed to a

settlement with Navistar International Transportation Corporation

(Navistar) regarding the Wisconsin Steel Works, located in Chicago,

Illinois (the Site), pursuant to Section 122 (i) of the Comprehensive

Environmental

[[Page 18586]]

Response, Compensation and Liability Act (42 U.S.C. 9601 et seq.)

(CERCLA).

DATES: This notice is effective on April 16, 1997. Submit comments by

May 16, 1997.

FOR FURTHER INFORMATION CONTACT: Send comments to Ken Kukovich,

Director, Liquidation Division, Economic Development Administration,

Room 7840, U.S. Department of Commerce, 14th and Constitution Avenue,

NW., Washington, DC 20230, telephone: (202) 482-4965, fax number (202)

482-2217. Copies of the proposed settlement agreement, Consent Order,

and all attachments, can be requested at the same address and telephone

numbers above. Electronically the information on the proposed

settlement agreement and the Consent Order (without the attachments) is

available via the Internet on EDA's Home Page at http://www.doc.gov/

agencies/eda/index.html (under Regulations and Notices).

SUPPLEMENTARY INFORMATION:

Background

Between 1876 and 1980 various portions of the former Wisconsin

Steel Works, located in Chicago, Illinois (the Site) functioned as a

fully-integrated steel mill. EDA guaranteed a loan of $100 million

under its Special Steel Loan Guaranty Program in 1979. After the

Wisconsin Steel Company filed for protection under the bankruptcy laws

in 1980, EDA honored its guaranty. EDA and the International Harvester

Corporation, the predecessor to Navistar, a former owner of the Site

and also a guarantor of the loan, thereafter foreclosed upon the

mortgages securing the loan. Title to the Site is currently held by

American National Bank as trustee for the Wisconsin Steel Land Trust an

Illinois land trust. EDA is the 90 percent beneficiary of the Trust and

Navistar is the 10 percent beneficiary.

No steel-making operations have been conducted on the Site since

1980. In 1984, EDA, as directing beneficiary, directed the demolition

of the majority of above-ground structures. The demolition was

conducted by Cuyahoga Wrecking Company and, after Cuyahoga filed for

protection under the bankruptcy laws, demolition was completed by the

National Wrecking Company.

EDA undertook a preliminary assessment and a site investigation of

the Site. EDA also had on-going discussions with the Illinois

Environmental Protecting Agency (IEPA), and the U.S. Environmental

Protection Agency (USEPA), on how best to address the environmental

conditions found at the Site. In November 1990, IEPA formally notified

EDA that enforcement by the state would be suspended and the matter

deferred to USEPA for cleanup under the Comprehensive Environmental

Response, Compensation and Liability Act (42 U.S.C. 9601 et seq.)

(``CERCLA'').

In April 1991, EDA directed the U.S. Army Corps of Engineers (the

Corps) to investigate and remediate the Site on EDA's behalf. The Corps

conducted two Rapid Response removals at the Site to secure it and make

it safe for investigation, the first in 1992 and the second in 1993.

The Corps completed the Phase I Remedial Investigation in the Spring of

1994.

Proposed Settlement

EDA has agreed to a settlement with Navistar relating to the Site.

EDA is publishing this Notice of Proposed Settlement pursuant to

Section 122(i) of CERCLA. EDA may withdraw from or modify the proposed

settlement should public comments disclose facts or considerations

which indicate the proposed settlement is inappropriate, improper, or

inadequate.

In brief, the proposed settlement provides that EDA will transfer

its 90 percent beneficial ownership under an Illinois land trust in the

Site to Navistar at a closing (the Closing) which will occur after the

following three events have occurred:

(1) An Illinois state court judge shall have approved an

Administrative Order by Consent between Navistar and the State of

Illinois.

(2) EDA shall have obtained written approval of this Agreement from

the U. S. Department of Justice.

(3) EDA shall have informed Navistar, in writing, of EDA's decision

to finalize this Agreement after EDA's consideration of all comments

received in response to publication of this Agreement in the Federal

Register.

The proposed settlement further provides that Navistar shall pay

$10,950,000 to EDA at the closing. Of this sum, $5,000,000 is

attributed to EDA's environmental claims against Navistar, under

various state and Federal environmental statutes and the common law.

The remaining $5,950,000 is attributed to EDA's non-environmental

claims against Navistar, including claims arising under a guaranty

between EDA and Navistar, and real estate taxes paid by EDA. In

addition, EDA shall be entitled to the first $1,244,000 of net proceeds

received from the sale of the real estate of the Site after remediation

is completed, and shall share in the net proceeds of any further sales

on a 50-50 basis with Navistar.

Navistar covenants not to sue the United States, including EDA, for

any of its claims in connection with the Site, as defined therein. The

United States, including EDA, covenants not to sue Navistar for its

environmental claims and non-environmental claims as defined therein.

Navistar also indemnifies the United States, including EDA, from any

and all claims asserted by non-parties to the settlement relating to

the environmental conditions of the Site.

As a further condition of the settlement, Navistar and the State of

Illinois have negotiated a Consent Order under the Illinois pre-notice

site cleanup program, which has been entered by the circuit court for

Cook County, Illinois, on December 30, 1996, in the matter: State of

Illinois v. Navistar International Transportation Corporation, Inc.,

Case No. 96CH0014146 (Circuit Court, Cook County, Illinois). Such

Consent Order provides, inter alia, that:

(1) Navistar shall conduct all phases of environmental remediation

at the Site, including completion of the Remedial Investigation,

Feasibility Study, Remedial Design, Remedial Action, and Operation and

Maintenance;

(2) Navistar agrees to submit all scopes of work and work plans for

the work outlined above, as well as Navistar's proposed selection of a

remedial remedy, to the Illinois Environmental Protection Agency for

review and approval;

(3) Navistar waives its right to withdraw from the program; and

(4) The Consent Order is enforceable by IEPA.

Dated: April 10, 1997.

Phillip A. Singerman,

Assistant Secretary for Economic Development.

[FR Doc. 97-9795 Filed 4-15-97; 8:45 am]

BILLING CODE 3510-24-P