Muck lurks in NASCAR sale

November 14, 2009 at 7:25 pm Leave a comment

Buyer shelling out $80M reportedly plans to build up vast tract with harbor dredge

The former NASCAR site is on track to change hands for $80 million, but the prospective buyer might use dredged spoils from the harbor to prepare the land for development — something that could spark another round of concerns about the future of the sprawling 676-acre stretch of West Shore waterfront, where plans for a racetrack crashed and burned.

The oft-contaminated sediment is dug from channels during dredging.

International Speedway Corp. (ISC) announced yesterday that it is in contract to sell the site to KB Marine Holdings LLC for $80 million — nearly $30 million less than ISC paid to assemble the industrial property, a former oil tank farm, back in 2004.

KB Marine Holdings, which is privately held, plans to use the property for port-related and warehousing purposes, and was recently formed to acquire underused properties in port cities, a spokesman said.

But at least one source said KB Marine is an offshoot of Texas-based UTEX Environmental Services, which reportedly has plans to buy hundreds of acres of industrial waterfront sites and use dredged harbor material to build up those low-lying locations in anticipation of commercial development.

Alan Marcus of the Marcus Group, which represents KB Marine Holdings, declined to comment on that yesterday, but a woman who answered the phone at UTEX headquarters in Texas said KB Marine Holdings was based out of that location.

The potential for dredged material to be used at the former NASCAR site doesn’t sit well with Port Richmond resident Beryl Thurman, head of the North Shore Waterfront Conservancy. The nonprofit organization supports marine-related businesses and creating more public access to the Kill van Kull shoreline.

“You don’t have to be a rocket scientist to figure this out. It’s not about how much more toxins you could put there — it’s about how much you can eliminate at this point,” she said. “I would seriously hope that before anyone allows them to do anything, that the environmental protection agencies get involved.”

ISC announced details of the purchase agreement shortly after the market closed yesterday. KB Marine made an initial $1 million payment and the deal is expected to close no later than Feb. 25. The company gets a $5 million credit toward the purchase price if the sale is finalized by Dec. 31.

“They are end users and that was one of our goals here. We felt that a deal would actually consummate with someone who had a use for the property and wasn’t trying to buy or resell,” Dan Houser, ISC’s chief financial officer, said of KB Marine.

Despite the $30 million drop in price, Houser said he expected tax benefits and net proceeds from the sale to raise $110 to $115 million for ISC.

ISC made a strategic decision in 2004 to pursue a racetrack here and a strategic decision to pull out in 2006, Houser said
“We certainly knew we were going to sink some costs and efforts in to push a speedway forward,” he said. “What none of us foresaw was the financial and macroeconomic downturn we’ve experienced.”

ISC dropped its proposal to build an 82,500-seat racetrack in the face of mounting political opposition, and a deal in 2007 to sell the land to international warehouse developer ProLogis fell through.

UTEX Environmental Services, meanwhile, has played a pivotal behind-the-scenes role in the Port Authority’s multibillion dredging effort to create deeper channels for ships ferrying cargo to ports in New Jersey and Staten Island.

Several years ago, UTEX sued the Port Authority for patent infringement, arguing that the agency was using the company’s patented method for cleaning dredge spoils.

In return for UTEX dropping its suit, the Port Authority agreed to let UTEX process and clean the dredge spoils at a fee lower than what the bi-state agency was already paying dredging firms.

The Port Authority signed off on that deal, which was expected to save the agency as much as $40 million, and was about to sign a contract when other dredging firms challenged it as unfair. Those firms appealed directly earlier this year to New Jersey Gov. Jon Corzine, who expressed concern about the UTEX agreement, and it appears to have remained in limbo since then.

A UTEX executive told the New York Observer in the beginning of the year that if the company got the contract, the firm would potentially buy hundreds of acres of waterfront industrial sites and use cleaned and dredged landfill to build up those sites and prepare them for commercial development

 

By KAREN O’SHEA
STATEN ISLAND ADVANCE

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Entry filed under: Go Coastal, Staten Island, Working Waterfront. Tags: , , , .

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