[Federal Register Volume 62, Number 73 (Wednesday, April 16, 1997)]
[Notices]
[Pages 18585-18586]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-9795]


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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