Bankruptcy court approves three sales of HRK land at Piney Point

Bankruptcy court approved sale of HRK Industries 8-acre parcel for $1.57 million

Herald Staff WritersJanuary 10, 2014 

MANATEE -- One of the nation's largest chemical companies has acquired a former HRK Industries plant on the troubled Piney Point land through one of three recently court-approved sales.

Utah-based Thatcher Chemical, purchased a chemical production plant and other facilities on 8 acres of HRK Industries' Piney Point property for $1.57 million in a sale approved by a federal bankruptcy judge. Thatcher makes chemicals for food, dairy and industrial uses and had been leasing the existing plant at 2905 Inland Transport St.

HRK still has more than 500 acres of the former Piney Point Phosphate plant -- once called "one of the biggest environmental threats in Florida history." It was working to clean up toxic waste from fertilizer production and phosphate operations near Port Manatee.

The land, on the corner of Element Avenue and Inland Transport Street, includes 3 acres that features a chemical plant, lab trailer and unused railroad tracks plus five acres of unimproved land, according to the sale agreement.

Before HRK's foreclosure, the company sold 36 acres in 2012 to Air Products and Chemicals for $6 million, just south of its newly sold land.

The proceeds of the sale will be applied by Regions Bank to reduce the pre-petition debt secured by a first mortgage on the property, according to court records.

The sale closed Dec. 31 after approved in the U.S. Bankruptcy Court Middles District in Florida. HRK was

being sued by several creditors. Among other claims are one for $750,000 from Providence Logistics Inc., of Tampa; $326,056.94 from Ardaman & Associates Inc., of Orlando; $1,219,601.84 from Xylem DeWatering Solutions Inc., of Bridgeport, N.J.; and two claims, one for $479,124.55 and the other for $750,000, from Spectrum Underground Inc., of Sarasota, according to court documents. HRK filed for bankruptcy June 27, 2012.

Two other sales were approved in court Nov. 15 but have not yet closed. Allied Universal Corp. contracted to purchase about 10 acres for $1.95 million plus $195,000 for additional land to be included in the deal. Also, Mayo Fertilizer and Farm Supply contracted to purchase 14.5 acres for $5 million of property it previously leased and additional land. Both deals have yet to close.

"We're looking at all options," said Scott Stitcher, attorney for HRK, about plans for the remaining 500 acres. Stitcher said it would be at least another year before everything is resolved regarding the property.

Ardman & Associates, which is still owed money, was the agency that performed a state Department of Environmental Protection-commissioned study in 2005 that found elevated contamination in a shallow groundwater aquifer, largely on Piney Point.

The property has a long history of contamination, spills and disasters. The Thatcher sale will not impact HRK's obligation for cleanup and maintenance, according to DEP.

"HRK has full responsibility for compliance of its property with all applicable environmental laws and rules," said Dee Ann Miller, a spokeswoman for DEP. "DEP retains access easements over the site, if and in the event DEP must respond to emergency conditions which HRK is unable to address."

Craig Thatcher, president of Thatcher Chemical, did not return messages seeking comment by deadline Thursday.

Related to the sale, HRK has a long-term care line of credit extended by Regions Bank of about $350,000 to financially assure HRK will continue to pay for cleanup and long-term care for the stack system, according to court documents.

Environmental history

In 2001, previous property owner Mulberry Co. went bankrupt and abandoned the plant, leaving billions of gallons of acidic water and stacks of arsenic, lead and radium, according to Herald archives. About 250 million gallons of Piney Point's treated wastewater was shipped out and dumped into the Gulf of Mexico in 2003 during the worst period of the disaster, which state officials decided was the only way to avoid a major environmental disaster from overflow.

In 2011, DEP also found HRK responsible for a breach in the liner of the Eastport Terminal facility. Cleanup efforts that year were so desperate, workers used seven queen-sized mattresses to block a massive leak.

Local environmental group Manasota-88 in the fall of that year asked the federal Environmental Protection Agency to investigate whether water quality requirements are being met at Piney Point because the nonprofit felt the state Department of Environmental Protection wasn't doing enough. EPA responded to the group saying DEP ought to have oversight of the property and doesn't believe there is a potential for an "overtopping of the dikes"

"It's not unexpected," Manasota-88 Chairman Glenn Compton said Thursday. "DEP is the lead agency that should be providing oversight of the property. Unfortunately, the state doesn't appear to be doing an adequate job. I was hoping the federal agencies would look into it but they do not have that as a priority. I'm somewhat disappointed."

Compton doesn't know anything about Thatcher Chemical, but hopes the new owners can continue to clean up the property and improve water quality.

"Bottom line is HRK has clearly demonstrated they cannot manage Piney Point," Compton said. "If someone else can prove they can do it, then we can start in the right direction."

Entangled lawsuits

If the pollution issues aren't messy enough, the court cases add to the complications.

The bankruptcy order states that the new owner cannot use the rail line or extend it. In a 2012 Circuit Court case, Reeder, Snell and Airport and Hillsborough are suing HRK and DEP over a railroad easement.

For its part, HRK is suing several companies, including Ardaman & Associates, Comanco, CDM Constructors, Shaw Environmental, WRS Infrascture and Environmental Consulting and Technology, for damage to the gypsum stack systems, property and its business in relation to the breach discovered in 2011. The next hearing is scheduled for Jan. 27.

Port Manatee has an interest in an HRK Holdings' bankruptcy proceeding concerning the sold parcel and acreage around it. In 2012, the Manatee County Port Authority filed a $12 million claim against the company as part of its Chapter 11 case.

The claim stems from a dredging project that involved storing dredged materials in a former gypsum stack on the Piney Point land HRK owns. Stitcher said HRK has not yet filed its objection to that claim.

Carlos Buqueras, executive director of the Port of Manatee, said Thursday that the port's attorney has barred him from commenting on the claim.

Buqueras also declined to comment on the $3.5 million the port had contracted to pay HRK to store the dredged materials on the Piney Point land. He was unable to say whether or how much of that fee had been paid to HRK.

HRK's founder, William "Mickey" F. Harley III, is also dealing with court cases for various business dealings, including a 2012 case still active in which a Pittsburgh nonprofit, Claude Worthington Benedum Foundation, accused Harley of defrauding the organization of $2 million and using investment money to buy shares of lingerie store Frederick's of Hollywood, of which Harley is a board member. The federal suit is in the midst of court-approved mediation that could result in a settlement, according to court documents.

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