BROWNFIELD REDEVELOPMENTA case history in the making

November 9, 2006

photo: Vicksburg, Mississippi

n Vicksburg, Miss., on a bluff overlookingthe mighty Mississippi River, acres ofuntamed growth partially obscure fromview an abandoned chemical

manufacturing plant. For more than threedecades, residue from fertilizer, pesticide,and herbicide processing slowly percolatedsoil and groundwater, rendering the acreagecontaminated and unfit for redevelopment.Following years of legal entanglements,bankruptcy, and funding shortfalls, 540 acresof once-pristine delta land lay idle.

In the spirit of winning against seeminglyinsurmountable odds, forces united totransform this once-forsaken liability into avaluable asset teeming with restoration,redevelopment, and revenue. Today, SilvertipProject Partners’ Mississippi BluffsDevelopment Project has initiateddevelopment of a destination resort completewith casino and 18-hole, championship golfcourse; high-end residential development;commercial real estate; and a boutiqueshopping mall. In less than three years —propelled by vision, ingenuity, and fortitude— public and private entities collaborated toaccomplish what could easily have taken 30years under traditional federal cleanupprograms.

SHUFFLING THE CARDSEvents began to unfurl in 2002 whenVicksburg Chemical Company (VCC) shutdown plant operations and filed for

bankruptcy. Once a formerly profitablefertilizer manufacturing company, the nation'seconomic downturn had claimed anothervictim. VCC sought to abandon the property,but the state of Mississippi intervened, and inan unexpected turn of events, a New Yorkbankruptcy court bestowed propertyguardianship upon the Mississippi Departmentof Environmental Quality (MDEQ). Suddenly,Mississippi found itself in an unenviableposition of having to liquidate, remediate, ormaintain a brownfield site. Unknowncontamination limited potential buyer interestand lack of funding eliminated state financingof the cleanup. It appeared the onlyalternative was to turn the site over to the U.S.Environmental Protection Agency (EPA), whereit would eventually be designated aSuperfund site, being prioritized with othersites vying for remediation funding in itsRegion 4.

"The state did not have the funds toremediate this property. If the EPA wasbrought in, it would take decades, and theywould seek to recover costs from the state …I went looking for an answer and I foundARCADIS," said Trudy Fisher, former generalcounsel for MDEQ and current environmentalpractice attorney for Brunini, Grantham,Grower & Hewes, a century-old law firmheadquartered in Jackson, Miss.

ARCADIS, a global engineering, consulting,and project management company

WHEN THE GAME IS A GAMBLEDealing with Contamination

ARTICLE BY

TRACEE GINGRICHTracee Gingrich, former freelance writer and

editor whose work has appeared in numerousmagazines, journals, books, and web pages,

writes for ARCADIS in their CorporateCommunications department. She can be

reached at tgingrich@arcadis-us.com.

IIN THE SPIRIT OF WINNING AGAINST

SEEMINGLY INSURMOUNTABLE

ODDS, FORCES UNITED TO

TRANSFORM THIS ONCE-FORSAKEN

LIABILITY INTO A VALUABLE ASSET

TEEMING WITH RESTORATION,

REDEVELOPMENT, AND REVENUE.

November 9, 2006 • Revitalization e-Digest

headquartered in the Netherlands, offers awide range of brownfield remediationproducts and packages, patentedtechnologies, and perfected techniques.Innovative and trend-setting, the ARCADISGRiP® Remediation Program offers totaland complete remediation for one price.Through ARCADIS' supporting RECLAIMSM

program, an extensive redevelopmentevaluation is conducted to assess and fulfilleach project requirement. "RECLAIMSM is anenabling process," said Paul Newman,director of the Commercial GuaranteedRemediation Program at ARCADIS' U.S.corporate office in Highlands Ranch, Colo."We ascertain, from a needs standpoint,how to make the financing, remediation,and development work. We partner eachcomponent with a solution and deliver atailor-made program," he added.

DEALING THE DECKARCADIS introduced the Vicksburg projectto Paul Bunge, owner of Silvertip ProjectPartners, LLC. Bunge, an industrial andcommercial developer with three decadesof experience, has in recent yearsconcentrated efforts on brownfieldredevelopment. "The industry [ofbrownfield redevelopment] is only about12 years old. It's far from being mature, butit's starting to be understood. When I goand look for brownfield funding, they knowwhat I'm talking about," Bunge said.

The Vicksburg property offered enticingdevelopment opportunities with its strategiclocation to Interstate 20, bisecting the citiesof Jackson and Shreveport; one-half mileof river frontage; scenic views; existingindustrial facilities with railroad access; and480 prime, uncontaminated acres. Currenthousing demand in Warren County hadyears ago outstripped available land andthe city of Vicksburg lacked — in itsestimation — the missing link for increasedtourism: a championship, 18-hole golfcourse.

Silvertip Project Partners and ARCADISresponded in earnest following MDEQ'sRequest for Proposals, presentingthemselves as viable partners in

revitalization. However, Pandora's Boxremained: What was the extent of thecontamination and how much would it costto remediate? Careful available dataanalysis coupled with ARCADIS' extensiveremediation experience culminated in an$8 million tally to remediate thecontaminated soil and groundwater.

Silvertip Project Partners, through its newlyformed Mississippi Silvertip Development,LLC, deposited $8 million in an escrowaccount, with MDEQ retaining oversight ofthe approval and issuance of remediationpayments to ARCADIS. With the masterdeveloper piece firmly in place andARCADIS on board to facilitateremediation, the remaining issue was tosecure financing for a development projectof this magnitude. "We knew from the citythey could fund TIF [tax incentive financing],but with a small community there wasn'tenough to make this project financiallyfeasible. We decided, let's bootstrapourselves into this thing by putting togetherlegislation to give us a tax rebate fromanyone we can bring onto the site," Bungesaid. TIF, originally used in California in theearly 1970s, provides financing for publicand private improvements through the saleof municipal bonds and tax abatement. Inthe end, $6 million in TIF bonds were issuedby the city of Vicksburg as inducement toinclude a golf course in the development.

Springboarding off Mississippi's previoustourism incentive package, Fisher craftedHouse Bill (HB) 1294, the MississippiEconomic Redevelopment Act, with theVicksburg Chemical propertyredevelopment quandary specifically inmind. This legislation offers a state-taxrebate for a period of 10 years, capped attwo and one-half times the cost ofremediation, to the developer ofenvironmentally impacted property thatmeets specific guidelines. As stated inSection 2 of HB 1294, "to achieve thecombined purposes of encouragingeconomic development on and aroundenvironmentally contaminated sites, it isnecessary to assist and encourage sucheconomic development by providing

PROJECT TEAMARCADIS, an international company headquartered in theNetherlands, is an industry leader in the fields ofinfrastructure, environment, and facilities. The U.S.headquarters, in Highlands Ranch, Colo., oversee operationsfor more than 100 offices. With 10,000 employees and morethan $1 billion in gross revenue, ARCADIS is dedicated toenhancing the world’s mobility, sustainability, and quality oflife. Visit www.arcadis-us.com for additional information.

Paul Bunge, an industrial and commercial developer withmore than three decades of experience in environmentalremediation, has in recent years concentrated efforts onbrownfield redevelopment. Working closely with federal,state, and local entities and stakeholders, Bunge capitalizes onhis vast expertise to accommodate comprehensive projectobjectives. For more information, visitwww.silvertipprojects.com.

Paul Newman, vice president and director of CommercialGuaranteed Remediation Program at ARCADIS' U.S. corporateoffice in Highlands Ranch, Colo., is an environmental attorneyspecializing in regulatory and guaranteed price remediationstrategies. Contact him at pnewman@arcadis-us.com.

Trey Hess, Brownfield Program Coordinator for MDEQ, is a Registered Professional Engineer and has served as the

environmental due diligence/cleanup leader for a number of

projects in Mississippi, most notably the 2008 Region 4

Phoenix Award winning project, Tupelo Fairpark. Contact him

at Trey_Hess@deq.state.ms.us.

Trudy D. Fisher, is a highly respected attorney in the fieldof environmental law and maintains a litigation andregulatory practice. Her clients include industry and regulatedentities on whose behalf she liaises with the federalEnvironmental Protection Agency and the MississippiDepartment of Environmental Quality. Ms. Fisher'srepresentation involves numerous issues, including brownfieldredevelopment, environmental compliance and litigationmatters. She is continually ranked in the prestigious BestLawyers in America directory for environmental law, and wasselected by the Mississippi Business Journal as one of"Mississippi's Leading Business Women."

temporary tax incentives within certaincounties and municipalities to certain businessenterprises." A Redevelopment ProjectIncentive Fund was created — administered bythe Mississippi Development Authority — toreceive deposits of state taxes, including sales,income, use, and franchise fees, collected frombusiness enterprises located and operatingwithin the redevelopment project area.

"This is the first time in the history of our statethat we've had an economic redevelopmentincentive package for a developer of abrownfield site. It's groundbreaking," Fishersaid. In effect, the legislation induces a self-propelled incentive, wherein the masterdeveloper identifies and encouragesbusinesses to locate on the property, keepingdevelopment momentum a priority.

Receiving bi-partisan support, a delegation ofcounty and city officials, state legislators,Mississippi's Governor, Lieutenant Governor,and Secretary of State lent support to thepassage of the bill. In unprecedented fashion,the bill was passed in the first session it wasintroduced. "Everyone was focused on whatwas in the best interest of the state," Fisheradded.

WIN-WIN FOR EVERYONEWhite-elephant status erased, the reality ofsustainable development was fast coming intofocus. On land where Union and Confederatesoldiers clashed and where, in historicalhindsight, the outcome of the American CivilWar was ensured when General Ulysses S.Grant crossed the Mississippi River andsubsequently laid siege to the city of Vicksburg— leading to its eventual surrender — historywas once again being made.

"We are pleased that this unique project hasbeen able to move forward. I am proud of thecreative solutions we were able to find to dealwith a difficult situation. We believe this effortsuccessfully incorporated the principles ofenvironmental protection, land reuse, andeconomic development. However, the mostpositive aspect is that for years to come thelocal community will receive the benefit ofproperty placed back into productive use,"said Charles Chisolm, executive director ofMDEQ.

Ever keen to leverage progress, the propertywas retitled into two separate parcels,contaminated and uncontaminated, allowingMississippi Silvertip Development to proceedwith development concurrent with remediation.

As of press time, Hale Irwin Golf Design is atwork on a championship, 18-hole golf course,taking strategic advantage of native wetlandsin its tees and greens design, enhancing thecourse with bayou ambiance; the industrialcomplex on site is being demolished andequipment liquidated by Harcros Chemicals;ARCADIS is on the ground implementing anexpeditious and thorough remediation; andgaming license in hand, Bunge is currentlysoliciting proposals from casino operators andresort developers.

While tourists enjoy the amenities of a five-star resort and families gather for backyardbarbeques, the once dormant andcontaminated condition of the property onwhich they play will become a backdrop forbragging rights. And in a city made famous fora decisive Civil War battle, the birth of Coca-Cola bottling, and an 81-year-long boycott ofIndependence Day celebrations, HB 1294 andthe subsequent revitalization of valuable landwill add another vibrant chapter to the storyof Vicksburg, Miss. •

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November 9, 2006 • Revitalization e-Digest