The Road to Harrisburg/J.B. Hunt
By the Bill Gladstone Group of NAI CIR

2/24/2010
Lynn Boyd, J.B. Hunt’s Director of Real Estate, decided it was time to proceed with an offer for the vacant USF Holland site in Harrisburg as the location for a 35,000 SF maintenance facility for Hunt. This site was strategically positioned equidistant between the Harrisburg and the Rutherford rail yards.

I sent Jerry Rauch, Principal with Burr & Tempkin and the broker for YRC (the current owner of the property through their purchase of USF Holland), a Letter of Intent to Purchase the existing terminal and maintenance facility for $1.3 Million with a 12-month contingency and 30 days to settle. The property was listed for sale at $3 Million. Jerry responded with a counteroffer of six months for contingencies and settlement ten days after that. The stage was getting set.

3/1/2010
The deal finally came together at $1.8 Million. Jerry sent me the draft agreement which I forwarded to Lynn.

3/17/2010
I met Lynn and the rest of the J.B. team at the USF site. Tom Markarian, the New Jersey based Regional Maintenance Director, Gary Anderson, the Sr. V.P. of Maintenance, Bob Coulter, the Regional Operation Manager, and Ken Miller, the Regional Vice President, were all present. It was a good site visit. Dick Bazdar, the Zoning Officer, Paul Cornell, the Township Manager, and Darrin Robinson, the Fire Marshall, were all there from Swatara Township. They saw no issues, were pleased to have J.B. coming to the neighborhood and were very reassuring that Swatara is a business friendly municipality. The civil engineer on the job was Dauphin Engineering led by Jeff Staub (Principal). Lynn and I met with Jeff at his office to review the project and the timeframe. As we went through it one more time we realized we needed seven months for contingencies, not six. I made a note to call Jerry and work it out with him.

3/26/10
Jerry and I worked through the issue of increasing the six months for contingencies. J.B. could buy two additional months (if needed) for $20,000 per month, applicable to the purchase price, but non-refundable if Hunt did not settle.

4/2/2010
Jerry received our comments to the YRC counteroffer. We expected to have it fully executed next week.

4/9/2010
Jerry has the sales agreement with our comments. Everything is in place. We should now be able to have it fully executed by next week. Unfortunately, it never seemed to happen quite on the schedule we needed. And that seemed to be a recurring theme - “Next week” - although no one is at fault.

4/30/2010
Jim Moore, Contract Counsel and part of J.B. Hunt’s in-house legal team, was waiting for the final copy of the contract. Once he got it, he reviewed it and had it signed quickly and sent back to me. I forwarded it to Jerry. Trying to get it countersigned quickly, prompted our recurring theme: Never quite on time but “next week”.

5/12/2010
It was fully executed today. I received an electronic copy from Jerry. Originals showed up on Friday the 14th; two went to Lynn and one came to me.

5/20/2010
We had a conference call with the J. B. Hunt team: Lynn, Melinda Propps (Real Estate Administrative Assistant for J.B.), Jeff Staub, and Ed Duborow (Sr. Geologist from Skelly and Loy, our environmental engineers). Everyone was up to speed on the issues and the timeframes. The Land Development Plan (LDP) was starting under Jeff’s direction.

6/7/2010
Melinda set up a second conference call at Lynn’s direction to review the results of our environmental testing and the civil and technical engineering that had been done to date. Lynn had asked that wells be drilled and that we go right to ground water testing because of the large number of soil samples (and the expense) that would be required. Lynn wanted better information sooner.

7/9/2010
Ed had all the Skelly and Loy paperwork done. Lynn gave him no choice. Our due diligence time period was up shortly and Lynn needed time to review the results and possibly renegotiate with YRC. It appeared we might need some monetary relief as our environmental investigation cost much more than anticipated. Thankfully the soils were clean per DEP standards. Ed was double checking to see if there were any soil quantities that had to be exported off the site. He was compiling a dollar amount for us regarding worst case scenarios for possible remediation costs. Slag had been an issue for us because its metallic composition interfered with our ground penetrating radar as we tried to detect metallic objects (tanks) still underground.

7/9/2010
Lynn, Jeff and I discussed the results of the confirmatory samples with Ed. They looked fine. The 9.6 parts per billion of arsenic in MW2 dropped to 9.3 and the 8.6 parts in one of the other two wells disappeared all together.

7/13/2010
Ed sent Randy Allen, Senior Technician with Dauphin Engineering, a draft letter on the soil samples. He and Jeff reviewed it and sent it to the rest of the team. The soils were fine; none had to be exported. There are no soil issues. Additionally the geotechnical data on the soils was done by Blair Kitlinski (F.T. Kitlinski & Assoc.). His investigations indicated we would need 1600 cubic yards of stone brought on-site to support one area of the new building. The soils in that area currently failed.

7/15/2010
Melinda set up another team call to review and confirm that the soil samples and the water sampling had gone well. J.B. Hunt was requiring DEP to sign off on a release of liability on the site. Unfortunately the site was “too clean.” With no contamination, there had been no release of product and thus no paperwork that would be generated needing a DEP signature. This was a potential problem.

7/16/2010
Gary Anderson was here to visit the site. Jeff Staub, Ed Durborow, and I met him at the site with Lynn and Tom Markarian to update him on the deal. We reviewed the environmental, the LDP and the geotechnical data. Everything was fine. Gary was aware we had to import 1600 cubic yards of stone to support one area under a supporting wall for the new shop.

7/23/2010
All was moving along fine especially in the township. Our LDP was looking very good and in compliance with all codes. No variances were needed! But now we discovered three parties had rights to this property through past actions. These individuals were part of the same subdivision when this USF Holland tract was first created. As such, their rights were created by un-opened streets on our tract that had never been abandoned by the municipality. We reviewed our documentation with Dave Wion, the Solicitor for Swatara, Stewart Title and Jim Moore. Jim’s feeling was that quit claim deeds would need to be signed by all three parties to extinguish other rights to the 300 +/- SF or unopened roads on this 11+ acre tract.

8/6/2010
We had requested an extension of our due diligence which was up on August 9th. We sent a letter relinquishing the deal (we had no choice due to timing) but willing to reinstate it if YRC signed it today (a Friday). Unfortunately our recurring theme was back. There was just no one at YRC to sign it. Finally, on the 10th, it got signed and the deal was back on track with our First Amendment now attached to the contract.

8/12/2010
Gary toured the site. The team was there to update him on everything we had learned since his last visit. Everything went well on the site. Gary then drove off-site to check the ingress and egress. He was concerned about the turning motions at Route 441, a three-way intersection. Jeff and I called Greg Creasy, Vice President of Grove Miller Engineering (traffic engineers). Greg thought we could get a stop sign at this t-intersection (28th and Sycamore Streets). We had a study done by Grove Miller and by J.B. Hunt’s safety department. Neither found an issue with the intersection. Greg’s study found we could put traffic signs there actually enhancing turning at the corner.

We also checked with Linda Goldstein at the Capitol Region Economic Development Corporation and Brian Ross at the Governor’s Action Team to see if there were funds to move an on-site PPL structure or to install traffic control devices at the Route 441 intersection. Unfortunately no money was available.

9/7/2010
Lynn flew in for the Planning Commission meeting. With excellent guidance from Paul and Richard, our LDP was recommended for approval to the Board of Commissioners in only one meeting. The Board was very helpful in allowing our project to move quickly through their planning process, while making sure it adhered to their policies.

9/9/2010
We asked for a price reduction ($200,000). We were granted $100,000 for the environmental work since we went above and beyond what was typical and customary. The site warranted such action and YRC understood. Now we had a Second Amendment that needed to be signed. YRC decided they would also include their need for an access agreement after settlement and potentially well into the future in case the PA Department of Environmental Protection required YRC to remediate anything on the site once we removed the underground tanks. Yet we had no ability to get a sign off from DEP. The site was too clean. This was unacceptable to J. B. Hunt as it obviously impaired their ability to develop the site after they settled on it, not knowing when YRC may come back wanting access and possibly halting all construction.

9/22/2010
We were working hard on getting the Highway Occupancy Permit (HOP). It was slow but coming together.

10/1/2010
The Second Amendment was still not signed because of this access agreement, required by YRC. Candice Blair, the Contract Counsel Manager for J.B. Hunt, was on top of this situation and continuously worked with her YRC counterpart to try and resolve this matter and a few other smaller items.

10/12/2010
It was not going well with the YRC attorney and the Second Amendment. J.B. would not accept an access agreement for post settlement entry and will not settle if the tank removal paperwork was not signed off on by DEP. To top it off , YRC wanted to settle before the end of 2010. That wasn’t possible. We had major issues with this access agreement, possibly our HOP, and maybe even the quit claim deeds.

11/10/10
Through the assistance of the Swatara Township staff and particularly Paul and Richard, the LDP was unanimously approved by all nine Commissioners.

11/18/2010
YRC contracted with their environmental company to have the two 10,000 gallon diesel UST’s (underground storage tanks) pulled from the fuel island. That caught us by surprise. We were expecting Brad Wolf, Senior Project Manager with BL Companies, to pull those two tanks, one other UST (previously closed in place) and seven AST’s. It had been worked out between J.B. and YRC but YRC was starting today! Lynn reacted quickly. He agreed to it and the tanks were pulled with a request of expedited samples. We had the results by the end of the week. The soils under the tanks were clean. The lines were traced; also clean. However, two of the four dispensers had contaminated soil under them, approximately one dump truck load. The good news: the site was not clean, we had one dump truck load of contaminated soil. That load would create the necessary DEP paperwork yielding a written release of liability under Act II and negated any further need for an access agreement. The soil which needed to leave the site was already stockpiled. The work was done. Nice job team! Candice was now able to get the other contract issues resolved since the access agreement was no longer necessary.

11/23/2010
Two of the three quit claim deeds have been resolved. The third took longer. We now had Charlie Suhr, Esq., attorney with Stevens and Lee in Harrisburg dealing with this issue. The paperwork is ready to be submitted to PennDOT for our HOP, and settlement is set for December 17th. Tom Markarian is getting ready to take over this site once the 35,000 SF maintenance facility is under construction. Candice got the Second Amendment signed and we kept moving forward.

11/29/2010
Thanksgiving was a welcomed break for everyone. Once we got back the deal continued to move well. The HOP paperwork was all together and had been submitted to PennDOT. The LDP was waiting for a signed Letter of Credit (LOC) and Service Agreement for J.B. Hunt, which would then be signed by the Swatara Township Commissioners. Finally it would be recorded at the courthouse. Melinda worked diligently with Cindy Croom, Treasury Manager at J.B., to get the LOC back to the township. Cindy was able to work with their bank to quickly get the changes to the LOC done that Dave Wion was requesting. We were close. As soon as these changes were signed and sent to the township, Jackie Bertolette, the Planning/Zoning Coordinator for Swatara, would have it signed by the Commissioners and recorded. We still had one more quit claim deed to be signed. I was trying to get the environmental report to DEP prior to settlement (December 17th). We had definitely turned the corner and were headed down the home stretch!

12/10/2010
Finally Charlie Suhr had all the quit claim deeds signed. Debbie Crimmel, the Office Manager at Dauphin Engineering, verified that Jackie Bertolette had the necessary signatures on the LDP to record it Monday, December 13th.

12/12/2010
We were now on the downhill side as we approached settlement. We needed to get our actual HOP and record our plans. Debbie and Melinda worked together and did an excellent job coordinating all the last minute details on the HOP and the LOC. Jackie went above and beyond to prove Swatara truly wanted J.B. Hunt in their township. I wanted to get the environmental report affirmed by DEP with paperwork in place, but that seemed a little unlikely with only one week until settlement.

12/13/10
Debbie verified Jackie had recorded the LDP at the courthouse.

12/15/10
The HOP was approved by PennDOT and the permit was issued.

12/17/2010
It settled without a hitch. The team did an excellent job in making this happen. J.B. Hunt now has a strategically located property in Harrisburg. Congratulations to the team that made it happen - 296 days later!