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$2,000 or $12 million? GM plant assessment may end up in court

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A $12 million dispute over the former General Motors engine plant in Massena may soon end up in court.

The plant shut down permanently last year. When GM declared bankruptcy it spun off a holding company to handle its shuttered properties. This includes the site on the St Lawrence River in Massena.

Motors Liquidation Corp. is suing the town for a re-assessment of the property. Executives say it should have a value of $2,000 dollars. Town officials say the 224-acre waterfront property, with its 890,000 square foot building, is worth $12 million.

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President Barack Obama flies to Detroit this morning to highlight what the administration says is the successful bailout of the auto industry. He'll tour a Chrysler factory and a GM plant. Critics still say the government-funded bailouts were a poor use of taxpayer money. The Obama administration says all three of the leaner companies are showing a profit. And they've created 55,000 jobs.   

On the other hand, the auto industry shed hundreds of thousands of jobs as it downsized, and shutdown operations across the US and Canada. One of the abandoned facilities is in Massena. The former GM engine plant shut down permanently last year. GM declared bankruptcy and spun off a holding company to handle its idled properties. The Massena plant is to be torn down and the industrial site cleaned up, but not before a $12 million dispute over the property's value is cleared up, perhaps in court.

Massena town officials say the waterfront and building are worth $12 million. Motors Liquidation Corp. is suing the town for a re-assessment of the property--at $2000. Tim Yost, the holding company's spokesman, says that the property value takes into account the site's myriad environmental problems. "Any New York property value should take into consideration all the factors that affect the value of that property, and that includes environmental issues. And as we know the plant in Massena does have environmental issues," Yost said. It's a federal Superfund site, contaminated by carcinogenic PCBs, among other toxins. Yost says until the property is cleaned up it has a negative value. When asked if the holding company would sell the property for $2000, Yost said "it's not that simple."

He says a federal ruling requires Motors Liquidation to clean up the site, no matter who owns it: "Frankly, it's impossible for someone to pay let's say $1000 for that site and take on the environmental responsibilities that go along with it. Believe me, the environmental responsibilities are much, much more than $1,000."

Massena town supervisor Joseph Gray says clean up could cost anywhere from $150 million to half a billion dollars. He says it's still a valuable piece of property: "Once the property is clean, there will still be restrictions on it in terms of redevelopment, in other words you couldn't put a housing development on it for example, but you could use it for industrial purposes or commercial purposes, to some extent."

Gray says the holding company's request for a re-assessment didn't come as a surprise. But the amount did: "The biggest slap in the face when this lawsuit/legal action came about was that we've had discussions ongoing, not going all our way, not going MLC's way. Then the last was a mature, responsible discussion. And then I found to come back with the $2000 assessment was not mature, responsible at all, and was an insult to the residents of the town of Massena," Gray said.

Gray says he hopes to keep negotiating with the holding company--and keep the re-assessment out of court. A lot of money's at stake: If the town valued the former GM site at $2000 dollars, Motors Liquidation would save more than $350,000 a year in taxes.

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