Assets of troubled Hazelwood recycling center to be bought

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A judge Monday approved the sale of a defunct recycling firm's equipment, securing the prompt cleanup of a Hazelwood site, but leaving unanswered other questions regarding Pittsburgh's program for handling glass, metal, plastic and newspaper.

U.S. Bankruptcy Judge Carlota Bohm approved the sale of Pittsburgh Recycling Services' assets for $1.35 million to GGMJS Property LLC, a Peters holding company. That firm agreed to start the cleanup of a waste-strewn, rat-infested site on Vespucius Street that has drawn protests from Hazelwood residents.

"I look at it as a positive sign that there is some movement on the bankruptcy, one that will now allow for some community dialogue with the new operator," said Jim Richter, Hazelwood Initiative executive director.

The city has asked for bids, due May 14, from companies interested in handling its recyclables, in hopes of getting money for the materials, rather than paying to have them processed.

For the final quarter of last year, Pittsburgh Recycling owed the city $100,000 for its recyclable materials, which it bought for $25 to $30 per ton, sorted in Hazelwood, stored in Lawrenceville and sold.

In January, Pittsburgh Recycling's creditors filed a petition to have it declared bankrupt, saying the firm owed $3 million. The city then hired Waste Management on a temporary, emergency contract to process its recyclable materials. During the first quarter the city paid $77,000 for that service.

City operations director Guy Costa said he did not know whether the fluctuating market value of recyclable material would allow the city to reap payments again. "That's hard to tell at this point," he said. "It depends on how many people bid."

GGMJS bought Pittsburgh Recycling's assets, including a sorter valued at $1.5 million, but the firm's attorney would not say whether it intended to bid.

That's because Greenstar LLC, a part of Waste Management, hopes to keep GGMJS out of the bidding. Greenstar argues that it previously purchased a company from GGMJS owner Gabriel Hudock, and that he agreed not to compete with Greenstar.

Judge Bohm refused to get involved in that issue. "Greenstar and you can fight somewhere else," she told attorney Kirk Burkley, representing GGMJS.

GGMJS committed to negotiating with the state Department of Environmental Resources and the Allegheny County Health Department on a plan to clean up the Hazelwood site.

Mr. Burkley said the Hazelwood cleanup will start promptly. "Some of the county's requirements are that we start within five days" of closing the sale of the assets, which should occur this week, he said.

Left unresolved is the status of 1,700 tons of recyclable materials Pittsburgh Recycling stored in a leased warehouse on 40th Street in Lawrenceville. GGMJS agreed to look at the material, and to determine whether it can be sold, but would not commit to removing it.

That leaves landlord Fort Willow Developers with no guaranteed means of clearing that building. Judge Bohm said she will take up that issue in June.

Sale proceeds will go to creditors, including former Pittsburgh Recycling employees, Cole Taylor Bank and the city. Bankruptcy trustee Owen W. Katz said the amount the city will get on the $100,000 it is owed has not yet been determined.

Rich Lord: or 412-263-1542. Twitter @richelord. Diana Nelson Jones contributed. First Published May 5, 2014 2:21 PM

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