LOUISVILLE, Ky./May 13, 2017 (AP) (StlRealEstate.News) — Metal roofing has collapsed.
Trees are growing tall inside buildings. Walls are heavily tagged with graffiti.
And trespassers have set up makeshift camping or lounge areas among the arsenic and long-banned pesticides, having hauled in several couches in recent months – one of them with two small toy dolls left on the cushions.
It’s now about seven years into what Kentucky officials have called their largest urban environmental cleanup, and property owner Tony Young, on a rare tour of what he calls the Louisville Industrial Park, says: “I need to speak my piece. If I don’t do it now, I won’t have any chance.”
The 29-acre property, known by regulators as the Black Leaf site for a tobacco-based pesticide once made there, is scheduled for a foreclosure sale on Friday.
After long-banned pesticides like DDT and other dangerous chemicals or heavy metals were found in the soil, Young said he became unable to pay the $20,000 monthly mortgage he owed to First Capital Bank of Kentucky. He also owes the city nearly $1 million in back property taxes and the Metropolitan Sewer District $200,000 for several years of unpaid drainage fees. But as Young this week faces the loss of the property he’s owned since 1999, he is taking steps to recover financially while he promotes his plan to develop affordable housing for western Louisville.
Young last week sued his bank, a bank holding company, and ExxonMobil, claiming in a U.S. District Court filing that businesses have entered into “a secret deal” that cut him out and could cost him more than $20 million. He said he believes a new business cooperating with the bank and ExxonMobil intend to buy the property in a process that will wipe away the liabilities for the new owner and will allow ExxonMobil’s plan to proceed.
But that plan, he contends, would require a lesser degree of cleanup than his, which would need to meet more stringent standards for residential development.
“I am going to get my money back, one way or the other,” Young told the Courier-Journal. But if the ExxonMobil plan wins the day, “it screws all the community” by leaving chemicals behind and not meeting demand for affordable housing, he added.
Still, his plan does not appear to be going anywhere.
Exxon plan favored
The state of Kentucky instead is casting its provisional blessing on an alternative proposal backed by the giant oil company, Occidental Chemical Corp., and Grief Inc. to get the property ready for recycling it into future industrial or commercial businesses, with the less extensive cleanup that would require. Each of those companies inherited liability for past pollution, state officials have said.
City officials see the foreclosure sale as potentially removing a logjam by getting the property into the hands of a business with the financial ability to bring economic development to the blighted property – and to remove a festering eyesore and safety hazard just two miles from downtown in one of the city’s most troubled neighborhoods.
Park Hill, where the property is located, is one of the crime-riddled communities Louisville Metro Police are focusing extra enforcement efforts in this year, along with Victory Park, Russell, Smoketown, Shawnee, Russell and Shelby Park
Theresa Zawacki, a senior policy adviser for Louisville Forward, the city’s economic development arm, said it is hard to predict the outcome of the foreclosure sale. But she said she expects more than one bidder on the property, now that businesses with liability for the pollution are ready to begin remediation. Friday’s sale is “another step in that process,” she said.
It’s large and directly served by rail, and suitable for industrial purposes, she said. “When things like this come up, there is typically a lot of interest,” she added.
Already, the state and U.S. Environmental Protection Agency teamed up to remove contaminated soil from dozens of homes near the industrial site.
But the Courier-Journal in 2016 reported that Kentucky Division of Waste Management officials had said they could not under state law force a full cleanup to residential standards inside the property. This week, a spokesman for the waste management division, John Mura, said state officials have accepted the technical portions of the ExxonMobil plan “with the caveat that Exxon must be able to demonstrate property access and the ability to place an environmental covenant on the property if necessary.
“To date, Exxon has not demonstrated that ability.”
He said state officials hope the Young lawsuit “does not further delay the restart of remedial work that could begin soon after the property access and ownership issues are resolved.”
Exxon has played a key role in working with the state on a remediation plan.
“ExxonMobil seeks access to the property to meet its environmental and regulatory obligations,” said Todd Spitler, company spokesman. “We continue to work under the direction of (Kentucky regulators) to develop and implement a remedy for this site that is protective of human health and the environment.”
A First Capital Bank of Kentucky representative did not return a request for comment.
Some of the chemicals found on the property have been measured at hundreds to thousands of times higher than state officials consider safe.
Young granted the Courier-Journal its first tour of the property on Monday, where he sought to make a case for his position. He portrayed himself as a man looking out for a neighborhood troubled by drugs and violence. He said he feels his bank, Exxon and state officials turned against him. “I’ve tried my best. I’ve cooperated with the state,” he said.
The Kentucky Resources Council, an environmental group, also supports cleanup to residential standards, said its director, attorney Tom FitzGerald.
That would best help to “redress a burden that the neighbors have borne for entirely too long, and to provide for the broadest range of future uses,” he said. Leaving polluted soils in place shifts costs to the next generation, he said, adding “it may be legal, but it does not make it just or moral.”
Metro Councilman David James, who represents the area, had also been pressing for a cleanup that would do what Young was seeking – allow for residential development.
James said Tuesday he has not yet heard from the state environmental agency on Black Leaf cleanup requirements and is frustrated that a problem discovered in 2010 remains unsolved.
“I would like to have had it resolved five years ago,” he said.
James also said he was concerned to hear that trespassers or squatters may have set up camps by bringing in couches. He said he did not see any of that several months ago on a visit to the property. “It makes it difficult for police because they don’t have access to it,” said James, a former police officer. “It’s private.”
He also said he may need to “find out why Mr. Young is not doing more to prevent people from coming onto the property he owns – like hiring private security.”
For his part, Young said the property is too large to keep everyone out.
James also said he was not aware of any discussions between Young and the city to bring low-income housing to the property. “At this point, Mr. Young has financial interests in the property and is looking for a way to cover his interests,” James said.
Young said he had been working with the nonprofit Housing Partnership Inc., on the low-income housing plan. The partnership has ties to the city – Mayor Greg Fischer is a board member – and several years ago looked into whether a several-hundred unit affordable housing plan was economically feasible prior to the discovery of the contaminated soils.
That kind of contamination “stops development in their tracks,” said Mike Hynes, president of the partnership.
Last year Hynes reiterated his partnership’s interest in the property for low-income housing if the environmental problems could be worked out. But Hynes said: “The property has to be safe for people to live there.”
Young said his cleanup plan, which he said has been rejected, would have piled a lot of contaminated soils in berms, where it would be permanently entombed.
But he also offered no details on its costs.
When the Courier-Journal on Monday requested details on the two cleanup plans from the state, Mura told the Courier-Journal to submit a request for documents under the Kentucky Open Records law because the matter was now in litigation.
The state, however, is not part of that litigation, and the Courier-Journal is still waiting for a response to the records.
For his part, Young tells a story of how what he thought would be a good, $1.9 million investment has turned into a nightmare that’s cost him dearly. He said he had the property checked out by environmental consultants – a bank requirement – before purchasing it, and they found none of the problems that state officials later discovered.
“I tried to do something good here,” he said. “I am still trying to do something good.”
JAMES BRUGGERS, The Courier-Journal