To: Board of Supervisors
From: John Kopchik, Director, Conservation and Development
Report Title: Holding Agreement for Hookston Remediation Project
☒Recommendation of the County Administrator ☐ Recommendation of Board Committee
RECOMMENDATIONS:
APPROVE and AUTHORIZE the Conservation and Development Director to execute a Holding Escrow Agreement between First American Trust FSB (Escrow Agent), the County, Union Pacific Railroad Company, the Helix Family Trust dated December 15, 1992, the Karen S. Hook Trust dated March 18, 2009, and the Blake Pucell Living Trust dated July 2, 2018, for the purpose of enabling the Escrow Agent to perform the duties of an escrow agent in connection with the implementation of a remediation and monitoring plan for the Hookston Station contamination site, subject to approval by the County Administrator and approval as to form by County Counsel.
FISCAL IMPACT:
The County’s share of the cost of this agreement is a Recognized Obligation of the former Redevelopment Agency and is included in the Recognized Obligation Payment Schedule (ROPS) submitted to the California Department of Finance annually. There is no impact to the General Fund.
BACKGROUND:
In 1992, the County, using the Redevelopment Agency funds, acquired a portion of a former railroad right-of-way in the Hookston Station area of Pleasant Hill. The right-of-way was being acquired to preserve the former rail corridor for a future fixed guideway/transit use; for the Iron Horse Trail; and for a roadway connection between the Contra Costa Centre area and Monument Blvd. The roadway element has since been dropped from consideration as a planned roadway.
The seller of the property, a group of individual investors (Dan & Mary Lou Helix, John Hook, Steven Pucell, and Nancy Ellicock) is referred to as the Hookston Group. The Hookston Group had acquired the right-of-way between Hookston Road and Mayhew Way as part of a reversionary transaction from the Southern Pacific Railroad Company. In the County’s acquisition of the right-of-way, steps were taken to protect the County from liability related to the removal of identified surface and sub-surface contaminants.
Subsequent to the County’s acquisition of the right-of-way, chlorinated solvents (trichloroethylene) were determined to exist in the groundwater. Prior testing had not revealed their presence. Some of the contamination is suspected to have come from a prior tenant of the property during the tenure of Southern Pacific’s ownership. The County/Agency joined the Hookston Group in filing suit against Southern Pacific related to the groundwater contamination. Effective in November 1997, the County, the Agency (now the Successor Agency), the Hookston Group, and Union Pacific Railroad Company, which is the successor to Southern Pacific, entered into a settlement agreement to resolve the federal lawsuit. In general, the settlement agreement assigned financial responsibility to the parties.
The parties owning the property during the time period contaminants are suspected to have been introduced to the groundwater were given the primary role in funding remediation. The County was assigned a subordinate role in funding remediation. The County, the County Redevelopment Agency, and the Hookston Group also entered into an additional settlement agreement in 1998 to further clarify remediation funding responsibilities as outlined above.
The parties have engaged in a process to develop and obtain regulatory agency approval of a remediation plan. The remediation plan is ongoing, and the financing of the costs associated with the work goes through an escrow account with contributions from UPRR -50%, the Hookston Group-25% and the County/Successor Agency-25%. Bank of America is currently the escrow holder, while EnSafe, Inc., is the administrator. EnSafe, Inc., has moved their firm away from the administration scope and has notified all parties of their desire to terminate their contract. The parties have been working with First American Trust to act as both the escrow holder and administrator and desire to formalize that agreement.
CONSEQUENCE OF NEGATIVE ACTION:
The parties would be without an administrator of the escrow account and could fall behind in their response to Orders from the Water Board.