Hess Bid. I Don't Understand. Explanation Pls

I hear there is a very long list of tax exemptions to Arclight.
Additionally, the 300 acres given to the VI Government, eliminates property tax income on that land and what does the VI Government end up doing with the land? Doubt they'll be able to sell that plus it might be enviroementally compromised.

It looked like the property the government is receiving is mostly the area where the housing, parking, and training facilities are. No refining operations ever took place there. Why would it be environmentally compromised? Please explain.

Have you read the actual agreement?

I have found that a picture is worth a thousand words - There is a very clear diagram of the land split included in the court filing. If you don't have time to wade thru the hundreds of pages to find it, pm me with an e-mail address and i'll send you just that page.

Basically the government receives title to the housing/parking plus the 'undeveloped' eastern portion.

I love how it list 122 housing units will be transferred to the USGVI. At least 71 of those housing units have been destroyed and removed (trailers), and the concrete homes were shut up with the power off and are full of mold. Not exactly a blessing.

As far as the environmental issues go, oil leaked into the aquifer for years, 4 times the amount spilled in the exxon Valdese oil spill. The contaminated ground water extends out to the brown water wells that surround the property to prevent the contamination from spreading any further. Not sure what it would take to make the property meet EPA standards for other types of business in the housing areas. Would be a good question for the senators to ask.

I love how it list 122 housing units will be transferred to the USGVI. At least 71 of those housing units have been destroyed and removed (trailers), and the concrete homes were shut up with the power off and are full of mold. Not exactly a blessing.

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Wrong. Wrong wrong.

Where are they? Last time I drove by you can see the concrete slabs where a few of my friends lived at Hovensa. Here is a current satellite image of where the trailers stood http://bit.ly/1NGRjA7 . All that's left is the concrete

I love how it list 122 housing units will be transferred to the USGVI. At least 71 of those housing units have been destroyed and removed (trailers), and the concrete homes were shut up with the power off and are full of mold. Not exactly a blessing.

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Wrong. Wrong wrong.

Well as far as the housing goes, YOU ARE WRONG. The trailers were removed over 2 yrs ago. Please provide evidence of the last time you were in the concrete housing, because from my experience you are full of crapp there too as regards the mold.

I've not personally been in the concrete housing since the shut down. Just knew someone who had been in one afterwards and that was his observation. Are we in agreement about the trailers being gone? Not sure how much experience you have with me being full of crap?

Well as far as the housing goes, YOU ARE WRONG. The trailers were removed over 2 yrs ago. Please provide evidence of the last time you were in the concrete housing, because from my experience you are full of crapp there too as regards the mold.

Trailers are gone. Your friend was in one? Well by God I guess that DOES make him an expert....

My experience regarding you being full of crap is limited to your posts here concerning HOV.

Well as far as the housing goes, YOU ARE WRONG. The trailers were removed over 2 yrs ago. Please provide evidence of the last time you were in the concrete housing, because from my experience you are full of crapp there too as regards the mold.

Amazing how misinformation spreads so quickly. All a smart person has to do is count the green roofs to get a count for most of the houses. And I know for a fact the a/c is on in all of the vacant houses. Bullshit spreads so fast around here.

Had no idea of the vast number of wells, over 1000 on the hovensa property that were affected by contaminants. That's a huge number and impacts STX entire ground water table.

I would think that the removal of old trailers is a plus. Those things are the first to fly apart in a hurricane and usually aren't built to last more than 10 years anyway.
I don't think the exact number of houses effects this deal one way or another either.
I woukd think the ground water contamination issue and proximity to the refinery itself will make this property difficult for residential sales, It's prime commercial/industrial property for sure though.

Perhaps I can help clarify some of the questions by reference to the documents.

1. Housing. The trailers were removed. That is correct. However, the house count is also correct and was certified to the Court. It was done recently. In addition, the extra 300+ acres are to the East of the existing facility (and are very good land.)

2. Environmental. There have been a number of USEPA AOC's on the HOVENSA site (Areas of Concern) all except one of which of which have been addressed under EPA supervision and approved. The one that has not been officially approved has been remediated and is under supervision. In addition, there is an existing $35 million trust fund and another $40 million has been reserved from this deal to continue that environmental remediation/control.

You are correct...one of the AOC's deals with the massive pre-1985 'floating hydrocarbons" issue that was of Exxon Valdez proportions. However, the many wells on the property you mention were drilled under an EPA consent order to recover that material -- all funded now and into the future. (The pump and clean process actually spins off a little money from recovered materials.) More to the point, the EPA certified three years ago that more than 95% of that was recovered.

The issue of OTHER in-ground pollutants "affecting the STX aquifer" is another issue, but was the subject of the massive, 12-year long suit brought by Dema for the GVI. (I was one of the lawyers involved -- for SCRG, which was a neighbor). There were innumerable studies conducted and experts deposed. It is the most studied and re-studied property in the USVI. (Second would be the adjacent waters.) The main STX aquifer is no longer used for STX drinking water, but even if it were, Hovensa is downgradient of the rest of the STX system -- pollutants would run to the bay not to the inland areas. Outlet is monitored. Hess/Hovensa settled for over $40 million (the GVI mortgage) and it was approved by USEPA, DOJ and a chief federal judge from Pennsylvania. Thus, the environmental condition is extremely well known, there will be more than $75 million to deal with issues, and an additional environmental policy above that is being secured.

3. Taxes. As for the tax issues, the GVI is being released from a very real $200+ million tax claim, gets 10% of operating income (with a cash minimum of $7 million per year) and gets a LARGE percentage if the facility is ever sold. Thus, this arrangement nets more in tax benefits to GVI at a lower cost than HOVENSA remaining open would have by several hundred million dollars -- even if you accept a differential of $14 million as compared with the minimum of $7 million in PILOT (payments in lieu of taxes) payments.

4. Competency. The GVI was represented by a very dedicated team of top environmental, financing, bankruptcy, litigation, petro-industry and other lawyers working with the AG and GVI lawyers. They have worked on this behind the scenes for a half year. It was their $4.5 billion lawsuit (not $1.5 as reported) that broke the dam and forced this settlement that would have been undreamed of otherwise.

Accurate information is good in this case. Feel free to ask any other questions you might have -- THAT, LIKE THESE, I CAN ANSWER FROM THE DOCUMENTS.

Carl

ps. Speaking of deals people criticize but don't understand.....Has anyone actually gone and looked at what has been done next door at SCRG under the CERCLA order we negotiated? Alcoa and Lockheed are extensively cleaning both the major areas -- an effort costing tens of millions of dollars thanks to a $28 million federal jury verdict SCRG got against Alcoa's subsidiary (and plowed back into the remediation) and more than $25 million additional that the GVI got from Lockheed. The old buildings have been removed. The old red hills (area A) have been graded, covered with geomesh, engineered, and within a year, will be re-forested. All because of legal actions and resolutions. Sometimes these big "deals" result in the only real progress on such issues that one can ever really get.

When it is completed next year, it will hopefully house other job and tax producing businesses that will provide a synergy with the new Arclight activities.

Thank you for clarifying this for the people.

Yes, thank you Carl.
Let's hope this deal gets done.

Great stuff Carl.

Thank you for clarification of the ground water issues and EPA.

Carl, I am so happy you volunteer your time to educate us. Nobody else seems to want to or is able to give us the facts. I am going to see if I can share your comments with others. Thank you!

80 jobs with a potential for 200 is a drop in the bucket.
I know you all are drooling to have legislature approve this but I think it's giving away the farm for decades to come. Way too many tax exemptions.

I'm thinking something is better than nothing and watching it rust. The Hess era is over and this is the reality of the present petro financial world. Hovensa went broke refining oil due to the price of crude oil and the high energy costs.

Alana, do you have an idea for 80 jobs? The money to implement the idea and pay 80 salaries? I haven't heard of any alternatives and the clock keeps ticking without any jobs being created. This shouldn't be the end all of deals, but a start at increasing revenue.

What jobs are they offering?

Presumably the initial jobs will be those involved in the initial plan to set up and operate the storage terminal. It was pretty well covered in the news:

http://virginislandsdailynews.com/news/hovensa-deal-now-in-legislature-s-hands-1.1978138

Jobs that are not there now. Jobs that pay better than KMart, McDonald's, most hotel jobs, most restaurant jobs, most tourist jobs. Even if they paid the same wage, it's still 80 jobs.

One bird in the hand is better than 2 in the bush.

So they say.