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Great Park is in safe hands with…AIG?!
January 23rd, 2009, 3:00 am · 16 Comments · posted by Teri Sforza, Register staff writer
So you want to build an emerald jewel (and thousands of homes) atop a potentially troublesome toxic waste site. What to do?
Buy insurance. Like, $100 million worth of insurance.
And don’t panic when you realize that your insurer is a branch of embattled American International Group - a company trying to stave off financial collapse.
The City of Irvine and developer Heritage Fields, LLC, bought a 15-year policy in 2005 to protect them from environmental risks at the Great Park/former El Toro Marine base/Superfund site.
Total premium: $11.7 million, broken down as follows:
- Heritage Fields, $8,8 million;
- City of Irvine, $2.9 million (paid for from development agreement fees).
The policy is through AIG’s American International Specialty Lines. And you probably 
know by now that AIG suffered “unprecedented financial problems stemming from investments related to the mortgage credit crisis” (the city’s words) and is floating on a $152 billion lifeline from U.S. taxpayers, who now own 80 percent of the once-mighty insurance giant (our words).
The city is not worried. “We believe that AIG has ample resources to pay claims,” it said in a written statement. That confidence is based on the subsidiary’s current credit ratings - and the reassuring intervention of the federal government.
“With our insurance broker, Alliant, we continue to closely monitor AIG’s financial condition,” said city spokesman Craig Reem in an email.
Contamination at El Toro is the result of more than 30 years of aircraft maintenance. Our colleague Sean Emery wrote recently about concerns over chemicals in the ground water below the Great Park.
Irvine leaders assure residents that the contamination is too deep and at too low a concentration to pose a health risk. They urge residents to monitor the city’s website for details.
Spokesman Reem points out that the federal government is responsible for “any known environmental remediation,” and that the insurance policy covers “any risks that might be discovered, on city property or Heritage Fields LLC, since the policy went into effect.”
City documents show that the policy is meant to cover great unknowns, including:
- Delays by the Navy to remediate newly-discovered contamination;
- Regulatory changes that tighten pollution standards;
- Legal liability from claims of injury or illness relating to the use of the Great Park, transportation of contaminated material, etc.;
- The cost of remediating the land beyond the standards required by the Navy.
(It may be worth noting here that the subsidiary recently agreed to pay $42.5 million to clean up contamination at four former Fruit of the Loom industrial sites. Goodness, what do they put in the underwear?)
More Watchdog:
- Pricetag for elected officials’ health insurance is hefty
- OC animal shelter director resigns; critics lobby for major change
- Many county workers enjoy generous benefits
- County’s head honcho makes $370,000; is he a bargain?
- A half-million bucks pays two execs, of two agencies, in one building
- Many county workers enjoy generous benefits
- Union executive’s paycheck rivals that of county supervisors
- Union official offers ‘ground fire from the guys in the cheap seats’
- Employee union at center of county tussle saw fortunes rise
- The Pink Slips Cometh
- It could save taxpayers money and make sense? Forget it!
- Millions shower top execs of OC’s dozen water districts
- Millions misspent by Irvine-based California Avocado Commission
- IRS computers at risk of hacking, report says
- Hollywood ending eludes evicted Salvation Army kettle - or does it?
- In OC, $41,000 up front for ‘free and fair’ election
- Ousted AIG chief laments, ‘What are you guys DOING?!’
- Are elections purposefully avoided at Irvine Ranch Water District?
- Nuclear regulators: Concerns over San Onofre remain
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Great Farce indeed.
The Great Park,..a muslim mousqe,…a hot air baloon,…AIG insurance
decals for the kiddies,…..Oh,……When can we go….?
It doesn’t matter who your insurance is with if you never file a claim. . .
even more cause for ridicule.
The Great Scam. Nothing Great about it and hardly a Park. Just a eyesore piece of land.
it takes a few years to get a great park in full form, if u all would look up the history of central park or city park , u would see it takes time for it all to come to fruition, it is a better alternative to an airport for sure, especially in this economic climate. stop being so negative
Teri,
I appreciate your renewed interest in insurers.
Given the quiet over the past 90 days on healthcare issues, shall I toss you another remarkable story?
How about you guys cover the AIG subsidiary that was insuring the health insurers?
That’s right… I hear that AIG was providing a “premium default” coverage to the health insurers. So, if the employers were defaulting, then the AIG coverage would step in to help the health insurance carriers.
So, what happens when the premiums default on a 1.5 million person basis?
Great Parking Lot
Don’t we have great Government State Federal and Local?
I say bring back the military–we need the civilian jobs and the boost to our local economy the military would bring along with it.
F-ing joke, the entire administration is Irvine City council members and Realtors who just want to increase the property tax rolls and make money slinging more properties. The current downturn only highlights how building more residential here only inhibits the opportunity for growth. It should have been made an airport because at least then there would be enough jobs created for people to be able to buy the damn houses they are trying to sell in the first place. South O.C. is a haven for greed and corruption, I can’t believe people ever voted for such a con but as long as the problem is in someone else’s yard…..
I am a former El Toro Marine and for the last twenty years, I have been a news reporter and photographer. Our ongoing investigation of the trichloroethylene (TCE) contamination at Salem-News is ongoing and the list of former and current residents and Marines and their dependents is an ever-growing list. I appreciate the Register covering this and proving that media is not scared of taking on the truth when it comes to big developers. Thanks to the growing amount of coverage on this, the cat is almost completely out of the bag now. People of Orange County and former El Toro Marines deserve better.
This great park vision is the biggest whitewash to cash in on the RE ponzi scheme. I hope the whole bloated fish just suffers and dies as a point of corporate greed and speculation. I think it is one big toilet with a weathered orange balloon to show for it. Irvine is an overpriced crap hole and really sucks always as Irvine is way over rated and way overpriced. Many other south county areas are far better and not worth the silly prices in Irvine.
“it takes a few years to get a great park in full form, if u all would look up the history of central park or city park , u would see it takes time for it all to come to fruition, it is a better alternative to an airport for sure, especially in this economic climate. stop being so negative”
somewheeeeeeeeeeeeeeere, over the rainbow…..
The great park isn’t sounding so great anymore. Great job guys, keep spending our tax dollars to make those developers and contractors rich. Then when the public shows little interest you can ask for millions more to renovate it.
Brianguy: It has been over 7 years and there is nothing to show for it. The Great Park has been a Great Waste of Money.
In this economic climate, an airport would be the better choice. There are jobs, hotels, restaurants, etc that would be there. The airport would be up and running by now providing tax revenue. What has the Great Park done? We were promised jobs and tax revenue. We got the dozen or so people running the balloon and the sales tax the ride generates. Woo hoooooo!!!!. Where’s the thousands of jobs that were supposed to be created? Then there are all the dead trees in planter boxes (you can see these driving down Trabuco on the back side of the base/airport). How much money was wasted there?