Riverview council quizzes Crown president on McLouth site intentions

Photo by Sue Suchyta Crown Enterprises President Michael Samhat (right) answers questions at the June 18 Riverview City Council meeting as City Manager Doug Drysdale (left), and Council members Lynn Blanchette, Dean Workman and Bill Towle listen.

Photo by Sue Suchyta
Crown Enterprises President Michael Samhat (right) answers questions at the June 18 Riverview City Council meeting as City Manager Doug Drysdale (left), and Council members Lynn Blanchette, Dean Workman and Bill Towle listen.

Sunday Times Newspapers

RIVERVIEW – City Council members questioned Crown President Michael Samhat about a rumored logistics center at the former McLouth site and its impact on local roads June 18.

Logistics centers relate to the transport, coordination and distribution of goods, for both national and international transit. The former McLouth site is a logical contender for a logistics operation, given Crown’s similar operations, and the site’s access to road, rail and deep waterway access.

To reach the former McLouth site from I-75, tandem axle trucks would be required to take Class A roads – Allen and King – to the riverfront location, since sections of Sibley, which would be a more direct route, are Class B, and limited to the weight it carries by state regulation.

In an ironic twist, the concern of Trenton officials about traffic on King Road in relation to Riverview’s thwarted landfill expansion attempt are now mirrored by concern from Riverview officials about traffic on King and Allen roads if Crown develops the site into a logistics center.

Samhat said Crown has received three extensions from the Wayne County Land Bank, with the latest extending to October, while it seeks assurances and a financial commitment from the Environmental Protection Agency, which allocates Superfund money to clean up sites of extensive and challenging environmental contamination.

“We don’t want to take title to the property until we have an agreement with the EPA, and a path forward to handle the environmental challenges at the site,” Samhat said.

Samhat said at the same time, Crown is trying to address with the state of Michigan the environmental challenges with the piece of land it has owned on the riverfront since 2002, which straddles Riverview and Trenton.

“We’ve got an agreement with the EPA now,” Samhat said. “We’ve also got an agreement with the state of Michigan. Those agreements are subject to a review process, that is led by the EPA, and that review process is something that is handled by the (Department of Justice).”

Public hearings follow the review process, during which the public may raise concerns and receive feedback.
Samhat told city officials he understands that Riverview is a stakeholder, and wants them to understand the process.

“We have been so deeply involved in this negotiation with the county and also with the EPA, we’ve kind of just been mired in that process,” Samhat said. “It has been a very daunting process, and I know there have been some concerns with what we may do with the development of the property, how we are mitigating the issues at the site, and how we are going to handle traffic to and from the site. I am here to answer some of those concerns.”

Samhat said the Conservation Recovery Act process is in tandem with the EPA, which the EPA has led. He said separate agreements will be reached with the EPA.

Samhat said the agreements will spell out the responsibilities of the property owners and the regulatory bodies. He said since the former McLouth site will be a Superfund site, the responsibilities of the property owner and the regulatory agency will be defined.

“Our goal as a private landowner is we want to have some protection to cap our exposure,” Samhat said, referring to the cost of the remediation and cleanup.

Riverview officials’ doubts have been magnified by property Crown owns in Riverview, adjacent to the former McLouth site, which Crown has not developed since its 2002 purchase, despite assurances at the time.

Councilman Elmer Trombley said he doubts a company owned by Matty Moroun can be trusted to keep its word.
“I don’t have a whole lot of confidence in the guy,” Trombley said. “I know he’s a multi-millionaire, and I’m just a peon, but I got to speak up when I see something that ain’t right.”

Trombley said he worked at McLouth for 36 years, and he “knows what is buried there.”

“I know where it’s at,” Trombley said. “All the PCBs and all of that buried. What are you going to do with that?”

Samhat said Crown is focused on a thorough review with the EPA just to get the land ready to be developed.

Trombley asked pointed questions of Samhat which expressed his frustration over past inaction on the 2002 property purchase.

Samhat said the 2002 Riverview land purchase and its lack of development was influenced by the recession, and occurred before he worked for Crown.

Samhat said he considered it reasonable that Riverview officials were concerned about activities at the former McLouth site.

“I really came here to share information and help ease your concerns,” Samhat said. “Concerns that I have heard from the county, accusations about what we might try to do, lack of confidence with us following through with anything.”

Samhat said he personally takes responsibility for what he has committed to do.

“I would have to be one of the greatest con men of all time to be standing here and have absolutely no intention to do the things I have signed up for, and to be where we are at in this process,” Samhat said.

“I would have to fool the city of Trenton, who is very concerned about us owning more land down here. I would have to fool the county, who we went through a very rigid process with, and there were others interested in the site. I would have to fool the EPA, all the way to Washington, and I would have to fool the state of Michigan.”

Councilman Bill Towle asked Samhat at what price point Crown would walk away from the McLouth site if Superfund money was not allocated to clean up the site to an extent that would allow Crown to recoup its initial investment and profitably invest in the site.

“You were concerned as to what your limits of liability might be,” Towle said. “What is your walk away point? What are you looking at from the Superfund versus what you are going to contribute? You develop a piece of property anticipating making money on it. You are only willing to pay so much. All I am asking is how much you are willing to put into the kitty to clean that piece of property up if there is a shortfall?”

Samhat said that everything Crown is committing to is defined by the “scope of work,” which means the pricing is estimated.
“We have a commitment to the county to raze all those buildings and do it properly,” Samhat said. “Then we have another commitment with the EPA that is a scope of work, what we need to clean up immediately.

“From there, when we get into the development process, even though it is a Superfund site, there are many Superfund sites in the U.S. that sit and languish because the government hasn’t prioritized where they can spend money, and where it is most needed.”

He said once the regulatory requirements are met, he does not know how much more Crown will spend to develop the site.

“At this moment in time, we think to take the (McLouth) buildings down and to meet our commitment to the EPA and the City of Trenton is probably about $12 million,” Samhat said. “That is not counting the piece that we already own that straddles your city and Trenton, and that is going to cost some additional millions. That is the estimate right now.”

Samhat said that does not include the acquisition costs.

“If we don’t hit $20 million in expenditures (within 72 months), we are going to pay a $1 million penalty (to the Wayne County land bank).”

Samhat said that Crown is the landlord for some of the largest transportation companies in the world.

“We have build for FedEx and UPS, and we work with Walmart and companies like that,” Samhat said. “So we are a very responsible developer. There is never a sure thing with something like this. We are a very capable developer, and our companies are very capable logistic companies.”

He said Crown takes on challenged sites as part of its investment portfolio.

“We believe we have good ideas for this site,” Samhat said. “If we can get in front of it and get it done, and the economic cycle stays relatively strong, I think our chances are good.”

(Sue Suchyta can be reached at sue.suchyta@yahoo.com.)