Piney Point sale hits hurdle

jsalman@bradenton.comAugust 9, 2012 

TAMPA -- Air Products and Chemicals Inc. has postponed its negotiations to buy portions of Piney Point from troubled HRK Holdings LLC -- leaving 250 jobs and the threat of toxic runoff on the line.

In federal bankruptcy court Wednesday, Air Products representatives said their company won't close on the deal until the Florida Department of Environmental Protection provides written assurance clearing them of any future obligations at the site.

The state, already facing a $15.8 million bill for environmental cleanup at Piney Point, has refused to forgo that right.

Judge K. Rodney May gave final approval for the Air Products sale Wednesday at federal bankruptcy court in downtown Tampa.

But the scheduled closing now has been postponed two months until Oct. 30, giving all parties time to work out their differences.

That delay strips up to $1.2 million in shared proceeds from the DEP to use toward preventing the reservoirs at Piney Point from overflowing with toxic water -- a date the agency projects will come in early September, according to documents and emails obtained by the Bradenton Herald.

HRK has yet to file a water management plan for the site, and with no operating cash available, the DEP now appears forced to either assume the cost or face the possibilty of an acidic runoff spill into Bishop Harbor.

"I don't think any of us know exactly when the occupancy will be exceeded, hopefully it's after the sale occurs," said Jonathan Alden, senior attorney for the DEP. "We're working with HRK to ensure they're prepared for the rain anticipated."

DEP officials in June ordered HRK to immediately address eight deficiencies at the former Piney Point phosphate processing plant, ranging from high levels of ammonia in a drainage ditch to watershed that's still contaminated with dredging sediment.

Damage to structures near the gypsum stack liner tear last summer, which sent 170 million gallons of toxic water gushing into Bishop Harbor, remains unrepaired.

The DEP's letter warned HRK those maintenance violations could lead to the discharge of untreated storm water by Oct. 1 -- sending water contaminated with radioactive sediment into area waterways and creating the threat of algae blooms potentially deadly for fish and aquatic plant life.

Heavy rainfall in July moved that date up three weeks, according to the DEP, which is now being asked to conduct an internal investigation.

HRK, meanwhile, required court approval Thursday to borrow another $45,000 just to continue operating until the next hearing Sept. 7.

The land sale "is in the best interest of all of us," said Scott Stichter, an attorney representing HRK. "We're selling off parcels to pay creditors."

The sale price has grown from $5.8 million to $6.1 million to accommodate two extra acres that have been tacked on, bringing the parcel total to 32.1 acres. At the site, Air Products plans to build a manufacturing facility that ultimately would employ 250 workers, the company said.

More than 60 creditors owned about $26 million from HRK will spar for a share of the proceeds at the September hearing.

"I don't know who's first or second in," May told the crowded room of attorneys. "I don't have the entire pecking order today."

Gypsum stacks that were used as disposal grounds for Port Manatee's Berth 12 dredging project now occupy nearly 365 acres at Piney Point. In May 2011, the liners and pipes storing the dredged material sprang leaks -- spilling 170 million gallons of toxic water into Bishop Harbor on southern Tampa Bay.

HRK has outlined a plan to sell the remaining 280 acres of developable land there to other potential suitors at a price of at least $71,000 per acre, which would satisfy all of its debts.

But attorneys representing the creditors questioned if some of the potentially contaminated land is even worth a penny.

HRK now will seek court approval to hire an investment banker to help manage its funds and market the site.

"This debtor has a lot of land, but it doesn't generate much cash," said Rick Malchon, an attorney representing Regions Bank, which is owed more than $17 million. "It needs to sell a lot of land, and it needs to sell it fairly quickly."

Josh Salman, Herald business writer, can be reached at 941-745-7095. Follow him on Twitter @JoshSalman.

Bradenton Herald is pleased to provide this opportunity to share information, experiences and observations about what's in the news. Some of the comments may be reprinted elsewhere in the site or in the newspaper. We encourage lively, open debate on the issues of the day, and ask that you refrain from profanity, hate speech, personal comments and remarks that are off point. Thank you for taking the time to offer your thoughts.

Commenting FAQs | Terms of Service