Orange County prosecutors have reached a $125 million tentative agreement with GKN Aerospace that includes a claims program to compensate the 50,000-plus residents and businesses forced to evacuate over the Memorial Day weekend due to a failing chemical tank at a Garden Grove plant, as well as reimbursement for the local emergency agencies that worked to prevent a massive explosion or street-level spill.
Along with a $100 million evacuees claims program, the settlement includes $8.47 million to cover the emergency and abatement response, what prosecutors described as a robust safety plan and multi-year monitoring program and $15 million in civil penalties, according to an Orange County District Attorney’s Office statement.
An Orange County Superior Court judge must still sign off on the agreement, which was negotiated between GKN and the District Attorney’s Office following a criminal investigation started in the midst of the toxic chemical scare. The agreement was filed with the court on Monday.
The agreement comes as GKN is moving toward restarting manufacturing at its Garden Grove facility, which employs more than 500 workers. But restarting the operations requires a court-approved safety plan.
A hearing at which a judge would discuss the agreement — including the safety plan — crafted between the OC District Attorney’s Office and GKN has not yet been scheduled.
Following the DA’s announcement, GKN officials announced that they will hold a community event on Oct. 27, and that it has completed the work necessary to launch the claims program once it is approved by the court.
“As requested, GKN has now announced a date for a community meeting. While this is long overdue, it is an important step forward,” Garden Grove Mayor Stephanie Klopfenstein said.
“I will continue to insist that the claims program launch date and clear reimbursement plan be announced at the same time,” she said. “Our community deserves transparency, accountability and a concrete path toward resolution.”
Officials with the District Attorney’s Office referred to the agreement as an “important milestone” in “recouping the millions of dollars in taxpayer funds spent responding to the Memorial Day weekend hazmat incident.”
The claims program specifically will allow residents and businesses to seek reimbursement for expenses such as hotel stays, meals, transportation or loss of wages tied to the evacuations, officials said. The money will be administered by an independent third party not affiliated with GKN, prosecutors added.
According to terms outlined in the tentative agreement filed with the court, those making claims could be eligible for up to $300 per night for lodging, up to $50 per day for transportation costs, and up to $50 per day for meals, among other economic losses. Eligible businesses could receive up to $5,000 per day that they were impacted by the evacuations. Those claims would require documentation, such as receipts or bills, according to the court filing.
The multimillion dollar claims program was first announced in late August as a way to address the financial impacts of widespread evacuations.
On May 21, vapors began venting from a storage tank containing methyl methacrylate, a toxic chemical used in acrylics-plastics manufacturing.
Concerns that the tank could explode — releasing a massive plume of chemicals into the air and the surrounding community — or rupture and spill — causing the chemicals to flow out into nearby streets and storm drains — forced authorities to trigger widespread evacuations. Over a five day period, an estimated 13,000 to 17,000 households in Garden Grove and five surrounding cities were impacted.
A crack in the tank ultimately served to relieve pressure, helping authorities bring the situation under control without a massive explosion or rupture.
Investigators over several months carried out a review of GKN’s operations that included onsite inspections, reviews of plant records and consultations with experts. Prosecutors ultimately opted to move forward with a civil agreement with GKN, rather than pursue a criminal case.
District Attorney Todd Spitzer, when previously announcing the claims program, described GKN as playing “a critical role in manufacturing cockpits for military aircraft,” adding that it had “fully cooperated” with the DA investigation.
Some residents have called for the shutdown or relocation of the 15-acre GKN Aerospace facility. The company previously paid a nearly $1 million settlement related to numerous environmental violations at the plant, and a history of spills, leakages and violations at the facility prompted city officials in 2023 to urge the company to improve the “general housekeeping.”
In late August, a coalition of groups called for either the shutdown of the GKN facility or the creation of a “buffer zone” between the plant and surrounding homes and businesses. City leaders said the closure of the plant was unrealistic, while acknowledging that more could be done to alleviate safety concerns.
“I think with this settlement and this amount that’s going to be paid out, it’ll give residents reparations, but it doesn’t address the structural issues around the toxic military manufacturing facilities that are nearby residents, residential areas and schools,” said Carlos Perea, founding executive director of the Harbor Institute for Immigrant and Economic Justice and a member of the GKN Out of Garden Grove coalition.
GKN employees have argued that shutting down the plant would impact other nearby aerospace companies, along with the larger domestic and military production chains.
GKN leaders have apologized for the chemical scare and has donated several million toward community relief efforts.
Residents have been told that methyl methacrylate — the volatile chemical that caused the fears of an explosion — will not be stored at the Garden Grove plant until the first quarter of next year at the earliest.
Since the chemical scare, county leaders have requested $4 million in reimbursement costs related to the hazmat response, with much of the money meant to pay back costs incurred by the Orange County Sheriff’s Department. The county in late August announced that they were going to file a lawsuit against GKN.
Dozens of lawsuits against GKN in connection to the evacuations have been filed in both state and federal courts. It is unclear how the agreement between the OC District Attorney and GKN could impact those civil cases.
The agreement with local prosecutors also would likely not impact a potential federal investigation. The FBI and EPA carried out a search of the Garden Grove plant in early June. Federal prosecutors have neither confirmed or denied whether an investigation into GKN is ongoing.