Using Department of Energy Assets for Community Benefit

by Sean Stockard, Director of Economic Transition, Tri-City Industrial Development Council

In southeastern Washington state, The Tri-City Industrial Development Council (TRIDEC) is helping the region transition from economic dependence on the U.S. Department of Energy’s (DOE) Hanford site. One project in particular is benefiting the region, the DOE and American taxpayers – a company formed to disburse the excess assets that remain at the Hanford site.

Hanford is 560 square miles of shrub steppe, sand and sagebrush located on the Columbia River. As a plutonium production complex, Hanford played a pivotal role in the nation’s defense for more than 50 years, beginning in the 1940s with the creation of the site as part of the Manhattan Project.

TRIDEC’s predecessor, the Tri-City Nuclear Industry Council, was formed by community leaders in 1963 to lobby for ongoing federal funding for Hanford. In 1984, realizing a broader scope was needed to ensure an economically sound future for the region, the Council merged with the Tri- Cities Chamber of Commerce to become TRIDEC, the lead industrial recruitment organization for the community. TRIDEC serves two counties, the cities of Richland, Pasco and Kennewick, and several smaller outlying communities for a total population of approximately 210,000.

In 1995, the DOE designated TRIDEC as the local Community Reuse Organization (CRO), responsible for taking the lead to mitigage the economic impact of Hanford’s downsizing. TRIDEC’s main role as the CRO has been to administer a $23 million federal grant for spurring economic growth and offsetting the impact of massive layoffs.

Maximizing the benefits from asset distribution

One of the many tools that CROs have is the excess assets that become available when local DOE sites no longer have a use for them – provided that the equipment transfer is used for economic development in the wake of a DOE facility’s closure or downsizing. In 1999, TRIDEC formed a subsidiary called the Tri-Cities Asset Reinvestment Company, LLC (TARC) to distribute these surplus assets into the local economy with the goal of creating jobs.

When first created, TARC fulfilled its mission by concentrating on the “low-hanging fruit” from the Hanford site. Assets were distributed to local businesses, given to new start-up businesses in the community, or used as an incentive to lure new industry into the area. Equipment requests were given to the site contractor in charge of surplus material and were filled as well as possible.

TARC management recognized very quickly that while offering surplus items to industry as growth tools or relocation incentives was a benefit, the community really needed a business recruitment and expansion incentive fund, to become more competitive. TRIDEC could use the fund to offer low- to no-interest loans or grants as an incentive to retain companies or attract new facilities to the community.

TARC management approached the DOE Office of Worker and Community Transition (now the Office of Legacy Management) to propose the idea of converting the site’s assets into cash for the incentive fund. DOE agreed and allowed TARC to begin the sale of excess equipment.

As a result, TARC’s asset disposition activity grew dramatically, and DOE later approached TARC regarding taking over the entire disposition function. The site’s prime contractor would still maintain the function of processing all items declared excess – including radiological surveys and identification of sensitive and export control items – but under a no-cost MOU with the local DOE office, the actual disposition of the items would now be TARC’s responsibility.

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