FEDS OK CLEANUP FUNDING U.S. TO PAY HALF OF LOCKHEED BILL.

Byline: Lee Condon Staff Writer

BURBANK - The federal government will pay about $180 million to Lockheed Martin Corp., approximately half the bill for cleaning up soil and groundwater contamination at former military aircraft manufacturing plants in Burbank.

Under a consent decree entered in U.S. District Court on Thursday, the government will cover the cost of past and future cleanup at the former Lockheed campus near Burbank Airport where the Air Force had several manufacturing plants from the 1940s to the 1970s.

``They owned and operated property. They directed disposal practices,'' said James Buckley, associate general counsel for Lockheed Martin. ``Congress has said the U.S. has a responsibility for its cleanup problems.''

The settlement ends years of negotiations over a lawsuit that Lockheed Martin filed in March 1997, alleging the government should share in costs of the massive cleanup. So far, Lockheed Martin has spent $265 million on its cleanup efforts and has estimated it will spend $110 million or more to complete the job.

The company, formerly known as Lockheed Corp., moved out of Burbank in the early 1990s and has spent the past several years cleaning up and selling off 305 acres of property.

Lockheed Martin alleged in its suit that the government took over the Burbank facility during World War II and owned and operated the majority of the site as Air Force Plant 14 until 1973. Buckley said the government actually owned the 103-acre B-1 site and the Building 199 site for three decades.

When Lockheed Martin bought the property back from the government in 1973, the company alleged the government continued to exercise extensive control over daily activities while Lockheed Martin worked on sensitive military projects such as the F-117A stealth fighter. For many years, Lockheed's primary business was providing aircraft for the U.S. military.

Lockheed Martin claimed the government directly contributed to the environmental contamination under the Burbank facilities and in the regional groundwater.

The formal settlement agreement, known as a consent decree, was entered in federal court Thursday and signed by U.S. District Court Judge Marianna R. Pfaelzer in Los Angeles.

Officials with the U.S. Department of Justice could not be reached for comment Thursday.

Under the terms of the deal, the government will pay Lockheed Martin $120 million for past cleanup costs, Buckley said. In addition, the government will have to pay for half of all future cleanup costs, estimated to be about $60 million. However, future costs could be higher than the estimates and the government in all could end up paying about $200 million to the company, Buckley said.

``It's a fair result. We're pleased it will reduce our costs,'' Buckley said.

Gail Rymer, a spokeswoman for the company, said Lockheed Martin estimates it will have an additional $110 million in cleanup costs above the $265 million that has already been spent.

The investigation and cleanup of environmental contamination has been under way since the mid-1980s under the direction of state and federal environmental agencies. The cleanup is being carried out under the authority of the federal Superfund law, formally known as the Comprehensive Environmental Response, Compensation and Liability Act.

Lockheed Martin was able to seek reimbursement from the U.S. government because Congress in 1986 amended the Superfund law to provide that the government could be held financially responsible for repairing environmental damage caused by its operations.

Most of the cleanup has already been completed and much of the land has been recycled for new uses. However, the company still needs to clean the 31-acre A-1 North site, where Zelman Development Co. plans to build a light industrial complex.

Lockheed Martin is also still operating a vapor extraction system to clean deep soils on the 103-acre B-1 site and also runs a groundwater treatment plant.

In 1996, Lockheed Martin paid $60 million to residents of Burbank as part of a secret settlement. The residents had claimed their health and property were damaged by contamination at the Lockheed properties. The company denied it caused any harm to its neighbors, saying the settlement was a business decision. Since then, thousands more Burbank residents have filed suit against the aerospace giant alleging similar claims.

Rymer said the government is not picking up any of the costs associated with Lockheed's payouts to residents.

Late last year, Lockheed Martin cut a deal to sell the last of its 305 acres in holdings. Most of its old plants have been demolished or renovated. Its old properties are now home to a hotel, a Fry's Electronics store and large office complexes housing film and Internet companies.

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Map: LOCKHEED CLEANUP SITE