SALES CRITERIA
RELEVANT CRITERIA AND FACTORS TO BE CONSIDERED FOR THE SALE OF RACER PROPERTIES
All offers to purchase any Property owned by the Trust (or its subsidiary, RACER Properties LLC; and together, "RACER") will be considered by the Trust only when the submitted offer is complete, whereupon it will be evaluated by the Trust based upon the extent to which it independently and comparatively complies with the requisite Sales Criteria, taking into account any or all of the Factors, as determined in each case, in the sole judgment of the Trust.
SALES CRITERIA: The 89 "Properties" owned by General Motors Corporation when it filed for bankruptcy in 2009, have been transferred to RACER in accordance with the bankruptcy court-approved Environmental Response Trust Consent Decree and Settlement Agreement to which it is a party, notice of which was published in the 75 Fed. Reg. 66390 (Oct. 28, 2010), and a copy of which is available here (the "Settlement Agreement")*. RACER is now required, among other things, to sell these Properties with the objective that they be put to productive or beneficial use. In making such determination, in accordance with paragraph 65 of the Settlement Agreement, the Trust will consider all of the following criteria (collectively, the "Sales Criteria") when evaluating an offer for the sale of Trust Properties:
First, whether the monetary value of the purchase price is sufficient in light of the projected budget for the sale of that Property, taking into account any surplus from past Properties sold or projected shortfall on the sale of the remaining Properties;
Second, the potential for the proposed reuse to create jobs in the State and the affected community;
Third, other benefits to the State, the Tribe, if applicable, and affected communities (such as increasing tax revenue, reducing blight, and providing a sense of renewal);
Fourth, avoiding a material increase in the cost of or interference with the Environmental Action;
Fifth, the views of the State, the Tribe, if applicable, and affected communities; and
Sixth, the reputation and credibility of the prospective buyer.
FACTORS CONSIDERED WHEN PERFORMING THE SALES CRITERIA TEST ASSESSMENT: This guidance is to provide prospective buyers with some of the quantitative and qualitative factors that may, at a minimum, be considered by the Trust when evaluating offers for the purchase of a Trust Property (the "Factors"), to assess whether and to what extent such offers meet the Sales Criteria. These factors are not presented in any particular order of priority. Each transaction involving Trust Property will have unique circumstances, which may require the Trust to consider other Factors, and balance their relative merits and weight differently, after analyzing the requisite due diligence, including a careful review of objective information, consultations with community officials and local community investment in the subject project, with due consideration given to any intangible benefits of the offer. The Trust will strive to balance all of these Factors, with the ultimate goal of achieving the optimum outcome for stakeholders in every case, but the Trust retains the ultimate discretion on how best to weigh these Factors and which offer or project, if any, best satisfies the Sales Criteria and the Trust's other requirements.
Before we consider your proposal further you will need to execute our standard confidentiality agreement, a copy of which is available here. Of course, no agreement with the Trust will exist until a definitive written agreement has been executed and all required approvals and conditions have been satisfied**.
Some of the Factors to be considered by the Trust, in its sole discretion, are the following:
Monetary Value. Factors relevant to the first criterion include:
The monetary value to the Trust from the real and personal property assets associated with the Property -- including: land, buildings, infrastructure, machinery & equipment, and other real and personal property. Proposals in which the real and personal property are bundled will not be accepted by the Trust, except that a proposal from a bona fide turn-key operator, along with a binding commitment to operate the plant subsequent to the sale, may be considered.
Fair market value of the real and personal property, which shall be based on current appraisals, applicable market conditions, or other appropriate information, taking into account whether, in the Trust's view, the real and personal property will ultimately be reused or liquidated for investment recovery or its scrap value.
Impact on the Trust's holding costs for the Property.
The time to close or otherwise defray the Trust's holding costs for the Property. The Trust may weigh more favorably proposals that are more certain of prompt closing in light of their potential impact on holding costs.
Whether the Buyer's plan avoids or otherwise favorably addresses utilities separation issues and/or costs for the Trust.
Job Creation. Factors relevant to the second criterion include whether the Buyer's plan:
For the ultimate end use of the Property is expected to create and/or retain jobs for the State and affected community early on (and, ideally, by a date certain). The Trust requires that the following information shall be furnished for review by the Trust to assist in its determination of whether the plan for job creation and/or job retention is viable:
A detailed estimate of the number of each type of job to be created or retained
A description of each type of job to be created or retained
An estimate of wages and benefits for each job to be created or retained
A detailed schedule estimate for when each job will be created
Leverages local, state, tribal, and Federal economic incentives for job creation and/or retention. Please identify and describe specific incentives you anticipate utilizing and discuss any efforts to date to qualify and/or apply for such incentives, including grants and tax incentives. If you have prior experience with these benefits, please discuss that experience.
Tax revenue, blight reduction, and other. Factors relevant to the third criterion include whether the Buyer's plan provides other benefits to the State, the Tribe, and affected community such as:
Increasing tax revenue. If you have prepared proforma projections, please provide them.
Increasing economic activity.
Reducing blight. Please discuss, for example, your plans for demolishing (or preserving and/or "beautifying") existing structures, and the inter-relationship between your ultimate re-use plans and the surrounding community.
Providing a sense of renewal. For example, you may wish to discuss your local hiring and any community relations or publicity efforts that will be a part of your plans.
Impact on Remediation. Factors relevant to the fourth criterion include whether the Buyer's plan:
Whether the buyer proposes to conduct any remedial activity itself (see paragraph 67 of the Settlement Agreement*), and/or how any such remedial activity proposed to be conducted by buyer will interact with that to be conducted by RACER.
Recognizes and otherwise includes appropriate use limitations (e.g., deed restrictions and engineering controls) and access related to cleanup requirements.
May avoid or reduce cleanup costs (e.g., where redevelopment infrastructure may meet or exceed a cleanup requirement and otherwise ensure protection of human health and the environment).
The Trust will give weight to proposals and plans that show a detailed understanding of RACER's likely cleanup plans for the site (as detailed in RACER's website).
In furtherance of point 3 immediately above, recognizes and allows for the non-disturbance and continuance in place of any structures contemplated in RACER's cleanup plans, such as pre-existing slabs, remedial systems, and the like.
Please discuss how you would propose to coordinate redevelopment and remedial activities, as suggested in paragraph 74 of the Settlement Agreement*.
Views of Communities, the Tribe, and the States. Factors relevant to the fifth criterion include whether:
Views of affected communities, the St. Regis Mohawk Tribe (where applicable), and State governments will be sought and considered.
The degree to which the local community is making an investment in partnership with the Trust to attract economic development opportunities.
A binding development agreement, with specific milestone dates for investment amounts, repositioning activities, zoning, construction completion, and job creation commitments, will be executed at closing.
The community, the Tribe, and the state endorse the redevelopment plan and reuse of the Property. The Trust shall seek an endorsement from the community, the Tribe, and the state only after the Trust has solicited the views of the community, the Tribe and the state, undertaken the marketing of the Property, called for and vetted the proposals received, and made a tentative selection of the reuse or redevelopment plan which, in the Trust's opinion, has the greatest potential to satisfy the Settlement Agreement* criteria.
Reputation of Proposed Buyer. Factors relevant to the sixth criterion include whether:
The buyer and/or new end user have a proven record of property ownership, management, operations, and/or redevelopment for comparable sites. The Trust requires that a minimum of three recent and relevant case studies of similar projects, including references, shall be furnished for review by the Trust to assist in its determination of whether the buyer and/or new end user has demonstrated the capacity to carry out the redevelopment plan being proposed for the Property. References must include at least one each from the following: government, seller, and financial). In addition, the following must be provided:
Resumes of principals/management
List of company affiliates and d/b/a's
List of directors, partners, shareholders, managers and members
Ownership structure (percent by name)
List of other boards, partnerships and joint ventures
Number of years in business
Disclosure of any actual or potential conflicts of interest
The buyer and/or new end user have adequately disclosed and explained their project plans and financing to the Trust. The Trust requires that the following information ** shall be furnished for review by the Trust to assist in its determination of whether the project proposed for the Property is viable:
The identity and a detailed description of the line of business of each of the entities involved
A minimum of three-years' audited financial statements for each of the entities involved
A detailed financial pro forma (3 years) for the project
A detailed schedule of the sources and uses of funds for the project. If any source of capital is from a third party, a copy of the loan and/or commitment agreement must be provided. If buyer is under any restrictions with respect to use of its own capital, whether pursuant to a loan or other agreement, these must be provided.
Business plan, including copies of all agreements or contracts for services/products or partnerships relied on in any way to support the business plan and the jobs/income/products or any other component of the proposed development plans
The buyer and/or new end user have demonstrated to the Trust that they are capitalized to implement planned redevelopment and related activities. The Trust requires that the identity of the sources of capital and the capital structure shall be furnished for review by the Trust to assist in its determination of whether the capital sources and the capital structure are adequate to undertake the proposed investments at the Property.
Current, interim financial statement (last fiscal quarter)
Credit references
Audited financial statements of financial guarantors
List any bankruptcy, IRS liens, other liens
List property ownership (including any interests in adjoining or nearby properties).
The new end user has a proven market for the products and/or services to be produced at the site. The Trust may require that the agreements for the underlying process inputs and/or output sales be furnished for review by the Trust to assist in its determination of whether an end user's business plan is viable.
Whether the buyer and/or new end user's reuse of the Property:
Incorporates sustainability concepts in its design.
Supports renewable energy manufacturing or generation.
The extent to which the buyer and/or new end user conducts its activities in a professional and business-like manner and is respected within its peer community. Reputation and credibility will also be evaluated in part on an assessment of the validity and accuracy of any and all representations made by or on behalf of any applicant/developer/buyer by any member/partner/agent of the developer in any public or private forum/format. Misrepresentations found to be negligent or intentional, in the sole discretion of the Trust, will be grounds for rejection of any and all proposals from said buyer.
* The Settlement Agreement — which was entered into by the United States, the fourteen states where Trust Properties are located, and the Saint Regis Mohawk Tribe, and was approved in March 2011 — can also be found on RACER Trust's website at https://www.racertrust.org/About_RACER/Settlement_Agreement.
** All information and documentation furnished to the Trust shall be kept confidential when the information is subject to the terms of an executed confidentiality agreement between the parties.