Did the City of Hamilton overpay for a Brownfield Site

As reported by the CBC, the City of Hamilton recently paid $1.75 million for a brownfield site that once sold for $2.  The property, located at 350 Wenworth Street North, sold for $2 a decade ago and then for $266,000 two years ago.

In the property was purchased in 2013 for $266,000, hundreds of barrels of toxic waste were discovered behind a fake wall.  The barrels contained coal tar byproducts and industrial solvents, and roof tar.  The new owner arranged for the proper disposal of the barrels.  The Ontario Environment Ministry confirmed  in  an e-mail to CBC that the waste had been from the building and it was decontaminated by the fall of 2017.  It also confirmed that the clean-up included the removal of approximately 200,000 litres of liquid waste.

The cleanup of the toxic property has been going on intermittently since 2010 (Photo Credit: Hamilton Spectator) photo

It is not known how much the clean-up of the 800 barrels of toxic waste cost, but the Hamilton Spectator quoted the owner  in 2017 that the clean-up would cost $650,000.

Property records for the building stretch all the way back to 1988, when Currie Products Limited spent a million dollars for 350 Wentworth. Currie ran a tar facility that went out of business there in the late 1990s, and was considered by many to be the company that originally polluted the site. Owner John Currie died in 2013.

Through the years, the building has changed hands multiple times for a wide swath of prices, ranging from that original million dollars, to $610,000 in 2007, to $2 in 2008, to the tax sale in 2016 and now, for $1.75 million. Over that time, building owners fought with each other and the province over who was actually responsible for cleaning up the site, in some cases heading to court in search of a resolution. For each sale, the price of the property reflected what buyers knew about the site at the time.

The city’s purchase of the property is all part of a reshuffling of buildings in the area to create a transit hub for the lower city like the Mountain Transit Centre at 2200 Upper James.

While it appears the city could have saved money by taking over the property when it was up for tax sale, that’s not really the case, officials say. The city does sometimes take carriage of properties after a failed tax sale, but woudn’t do so on a property like this one with environmental issues, Hamilton City Councillor Matthew Green told the CBC.  He added, “The city won’t take on the liability by policy.  The liability is way too big, because you don’t know what you’re buying … you have no idea what could be found or buried.”

The city bought 350 Wentworth St. N., which has required much cleanup over the years. Most recently, 200,000 litres of liquid waste was removed from the site in 2017 (Credit: The Hamilton Spectator)

 

 

 

Can a Saskatoon brownfield be transformed into fertile green space?

The City of Saskatoon, Saskatchewan is in the process of implementing a Brownfield Renewal Strategy that it deems essential to growth in its main corridors. The initiative aims to assess and prioritize redevelopment potential of abandoned, vacant, derelict, or underutilized properties along the City’s major corridors that may have or do have perceptions of contamination.

The results of the brownfields evaluation will lead to the formulation of an incentive program that will help overcome financial and environmental barriers for redevelopment, as well as provide contamination management plans for future development.

One recent brownfield development in Saskatoon was initiated by a not-for-profit organization called CHEP Good Food.  CHEP has been promoting food security in Saskatoon for nearly 30 years. The organization is currently working toward restoring a plot of contaminated land to an agricultural plot of land.

The non-profit group, which works to promote food security, has already won a grant from CN Rail that will help them plant native trees and bushes at another brownfield site in Saskatoon and to restore the soil.   The project received the CN EcoConnexions grant through Tree Canada / Arbres Canada and Canadian National Railway Company to plant native trees and shrubs on the site.

The Askîy Project grows crops on brownfield land in Saskatoon using re-purposed containers. (CBC)

A previous fruit and vegetable garden project by CHEP began in 2014 under a different name as rooftop gardens at the University of Saskatchewan. The project relocated to the brownfield site  in 2015 and was renamed the Askîy Project — which means “Earth” in Cree.

The latest CHEP project is more ambitious than the existing Askîy Project.  It involves growing trees and bushes directly in the soil as well as remediation the site.  A professor from the University of Saskatchewan, Susan Kaminskyj, will oversee experimental bio-remediation at the site.

The bio-remediation will consist of utilizing native a fungi that will assist the plants in growing but will also biodegrade the petroleum hydrocarbon contamination at the brownfield site.

Professor Kaminskyj explained in an interview with CBC, that the microbe is a common fungus, but one with “unique abilities.”  A property in the fungus allowed plants to grow and thrive on coarse Oil Sands tailings.  In early field trials, Professor Kaminskyj’s team found more than 90 per cent of dandelion seeds treated with the fungus sprouted on coarse tailings while no untreated seeds sprouted. The researchers also found the fungus was able to grow with diesel, crude oil and similar materials as its only nutrient source.

 

 

 

Former Contaminated Mine Site in NWT Declared Clean

The Government of Canada recently announced that the former Tundra Gold Mine, located in the Northwest Territories, has been successfully remediated.  The cost of clean-up was $110 million and was paid for by the government.

Tundra Mine was briefly operational in the 1960’s and was used as a dumping ground in the 1980’s.  It’s former owner, Royal Oak Mines went bankrupt in 1999.

Remediation of the site included revegetating soil, sealing mine openings, consolidating and isolating tailings and waste rock, treating petroleum hydrocarbon impacted soils, erecting barriers for erosion control, and removing buildings.  The clean-up project lasted more than a decade.

Though some re-vegetation has begun, the land – around 240 km north-east of Yellowknife – will remain recognizably an old industrial site for decades to come.

Tundra Mine Site post clean-up (Photo Credit: Jamie Malbeuf/CBC)

Dominic LeBlanc, Canada’s newly installed minister for northern affairs, called Tundra’s remediation “a great example of the hard work of northerners and the importance of partnerships with local Indigenous communities.”  Northern residents represented 76 percent of the project’s suppliers and 61 percent of its employees.  The Minister stated that the restoration will help local Dene and Métis peoples once again use the land for traditional practices.

The Canadian government will continue to oversea that monitoring of the site to ensure it remains stable.  Monitoring, using a combination of on-site equipment and drones, will cost an unspecified further sum each year.

More work to be done remediating the North

According to an article in Cabin Radio, Tundra’s successful clean-up remains a drop in the larger ocean of contaminated sites within the NWT.  Tundra is the 24th site under federal supervision to have reached this stage, a spokesperson for Crown-Indigenous Relations and Northern Affairs Canada said by email to on Cabin Radio.

federal webpage last updated in 2013 suggests Canada is responsible for more than 50 significant contaminated sites in the territory, including those 24.

separate federal website lists 1,634 contaminated sites within the Northwest Territories, where a contaminated site is defined by the Federal Goverment as “one at which substances occur at concentrations (1) above background (normally occurring) levels and pose or are likely to pose an immediate or long term hazard to human health or the environment, or (2) exceeding levels specified in policies and regulations.”

Some entries on the latter list are considered remediated and their files closed. Some are smaller sites not felt worthy of their own, separate clean-up projects.  Several dozen of them, for example, are grouped under one project to clean up the Canol Trail, a World War Two initiative which left contaminated soil, asbestos, and a range of hazardous materials strewn across 355 km of the Sahtu.

In the 2017-18 financial year, public records show federal agencies were obliged to spend money on some 275 separate contaminated sites in the Northwest Territories.  $157,000 was spent assessing a range of those sites, while a little over $103 million was spent on remediation work.

Of that figure, around $23.6 million was spent remediating the Tundra site in that financial year.

Unsurprisingly, Yellowknife’s Giant Mine – considered among the most toxic sites in Canada, harbouring 237,000 tonnes of poisonous arsenic trioxide in underground chambers – was the only site receiving more remediation money.

In the same period Canada spent just over $36 million on Giant, where full remediation work does not even begin until 2020.

Giant, like Tundra, was owned by Royal Oak when the company collapsed and the site became an unwanted federal problem. The full bill for Giant’s clean-up and maintenance – a program of indefinite, certainly decades-long duration – is expected to reach $1 billion in today’s money.

Tundra Mine 1963 (Photo Credit: Gerry Riemann)

 

Mine fined $100,000 for not Monitoring Effluent

On August 20, 2018, Lupin Mines Incorporated was ordered in the Nunavut Court of Justice to pay $100,000 after pleading guilty to a violation under the Fisheries Act related to the Metal and Diamond Mining Effluent Regulations. Of the total penalty, $80,000 will be directed to the Environmental Damages Fund.

An investigation launched by Environment and Climate Change Canada enforcement officers revealed that Lupin Mines Incorporated did not carry out an environmental effects monitoring study within the prescribed period, contrary to the requirements of the Metal and Diamond Mining Effluent Regulations. Lupin Mines Incorporated has since completed the required study.

Owners and operators of mining companies are required by law to conduct environmental effects monitoring studies that examine the potential effects of their effluent (discharge) on fish populations and aquatic invertebrates.

As a result of this conviction, the company’s name will be added to the Environmental Offenders Registry.

Environment and Climate Change Canada is responsible for the administration and enforcement of the pollution prevention provisions of the Fisheries Act, which prohibit the deposit of deleterious substances into water frequented by fish. The Metal and Diamond Mining Effluent Regulations authorize the deposit of effluent, provided that conditions prescribed in the Regulations are observed.

Lupin Gold Mine, Nunavut

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U.S. Ninth Circuit Rules Military Contractor Liable on CERCLA Clean-up Costs

Written by: By Whitney Jones Roy and Whitney HodgesSheppard Mullin Richter & Hampton LLP

TDY Holdings, LLC brought suit for contribution under the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA) against the U.S. government relating to environmental contamination at TDY’s manufacturing plant. The district court granted judgment in favor of the government after a 12-day bench trial and allocated 100 percent of past and future CERCLA costs to TDY. On appeal, the Ninth Circuit held that the district court sharply deviated from the two most “on point” decisions regarding allocation of cleanup costs between military contractors and the U.S. government when it determined the cases were not comparable, clarified the applicability of those cases, and remanded the case to reconsider the appropriate allocation of cleanup costs between TDY and the U.S. government.

TDY (formerly known as Ryan Aeronautical Company) owned and operated a manufacturing plant near the San Diego airport

From 1939 through 1999, TDY (formerly known as Ryan Aeronautical Company) owned and operated a manufacturing plant near the San Diego airport. TDY’s primary customer was the U.S. government—99 percent of TDY’s work at the plant between 1942 and 1945, and 90 percent of the work thereafter was done pursuant to contracts with the U.S. military. The United States also owned certain equipment at the site from 1939 to 1979. Id. at 1006. Chromium compounds, chlorinated solvents, and polychlorinated biphenyls (PCBs) were released at the site as a result of their use during manufacturing operations. Id. In some cases, the government’s contracts required the use of chromium compounds and chlorinated solvents. Id. After passage of the Clean Water Act and other environmental laws classifying these chemicals as hazardous substances in the 1970s, TDY began environmental remediation and compliance at the site and billed the government for the “indirect costs” of that work, which the government paid. Id. at 1006–07. TDY incurred over $11 million in response costs at the site. Id. at 1007. Until the plant’s closure in 1999, the government reimbursed 90 to 100 percent of TDY’s cleanup costs at the site. Id. at 1007, 1010.

In 2004, the San Diego Unified Port District brought CERCLA claims against TDY. TDY and the Port District entered into a settlement agreement in March 2007 in which TDY agreed to cleanup releases at the site. TDY then brought suit for contribution under 42 U.S.C. § 9613(f)(1) and declaratory relief against the United States. Id. at 1007. The district court granted TDY’s motion for partial summary judgment declaring that the United States was liable as a past owner of the site under CERCLA. Id. After a 12-day bench trial on equitable allocation of costs, the district court held that the contamination caused by the hazardous substances at issue was attributable to TDY’s storage, maintenance, and repair practices, as well as spills and drips that occurred in the manufacturing process, rather than to the government’s directives to use the chemicals. Id. Accordingly, the district court allocated 100 percent of the past and future response costs for remediation of the three hazardous substances to TDY. Id. at 1008.

On appeal, TDY argued that the district court erred (1) when it allocated liability according to “fault”; (2) that the government’s role as owner rather than operator should not have been a dispositive factor in the court’s allocation, and (3) that the government should bear a greater share of response costs because it specifically required use of the chemicals at the site. Id. The court of appeals summarily rejected TDY’s first two arguments, but found that the district court did err in its analysis and application of binding authority on point: United States v. Shell Oil Co., 294 F.3d 1045 (9th Cir. 2002) and Cadillac Fairview/California, Inc. v. Dow Chem. Co., 299 F.3d 1019 (9th Cir. 2002). Id. at 1008–09. Shell Oil and Dow Chemical each produced products to support the U.S. military during World War II and incurred liability for contamination caused by hazardous chemicals that the government required to be used. In both cases, the Ninth Circuit affirmed the district courts’ allocation of 100 percent of cleanup costs to the government because “the contractors’ costs were ‘properly seen as part of the war effort for which the American public as a whole should pay.’” Id. at 1009.

The Ninth Circuit disagreed with the district court’s conclusion that Shell Oil and Cadillac Fairview were not comparable, but agreed that some deviation from their allocations were appropriate. Id. The Ninth Circuit agreed that the government exercised less control over TDY than it did over Shell Oil Co. or Dow Chemical. In support of this determination, the court noted that the government was an operator, rather than an owner, of TDY’s site, that the government-owned equipment was removed from the site 20 years before TDY ceased operations, and that TDY’s own practices at the site caused the contamination. Id. at 1010. Furthermore, the district court properly determined that “industrial operations undertaken for the purpose of national defense, standing alone, did not justify allocating all costs to the government.” Id.

However, the Ninth Circuit held that, in allocating 100 percent of cleanup costs to TDY, the district court failed to consider that the government required TDY to use two of the three chemicals at issue beginning in the 1940s, when the need to take precautions against environmental contamination from these substances was not known. Id. Furthermore, the Ninth Circuit determined that “[t]he court’s acknowledgement of the evolving understanding of environmental contamination caused by these chemicals, and TDY’s prompt adoption of practices to reduce the release of hazardous chemicals into the environment once the hazards became known, further undercuts the decision to allocate 100 percent of the costs to TDY.” Id. The district court also failed to consider the parties’ lengthy course of dealing through 1999, when the government paid between 90 and 100 percent of cleanup costs at the plant. Id. Although “a customer’s willingness to pay disposal costs . . . cannot be equated with a willingness to foot the bill for a company’s unlawful discharge of oil or other pollutants,” the Ninth Circuit nevertheless determined it should have been a relevant factor in the allocation analysis. Id.

This article was originally published on the Sheppard Mullin Real Estate, Land Use & Environment Law Blog

____________________

About the Authors

Whitney Jones Roy is a litigation partner in firm’s Los Angeles office. Ms. Roy was recognized by Law360 as a “Female Powerbroker” and by the Daily Journal as one of the Top 100 Women Lawyers in California in 2014.  Ms. Roy has experience in all aspects of California and federal civil procedure through trial. She also defends her clients on appeal when necessary.  Ms. Roy also specializes in complex environmental litigation and related products liability litigation. Her expertise includes the Clean Air Act, CERCLA, RCRA, design defect, failure to warn, negligence, nuisance, and trespass.

Whitney Hodges is an associate in the Real Estate, Land Use and Natural Resources Practice Group in the firm’s San Diego office. She also serves on the firm’s Diversity and Inclusion Committee, Pro Bono Committee, Recruiting Committee, Energy, Infrastructure and Project Finance Team and Latin Business Team.  Ms. Hodges specializes in the representation of clients involved in real estate development. Her practice focuses on advising and representing major residential, industrial, commercial and mixed-use development projects, as well as Native American Indian tribes and renewable energy developers through all phases of the land use regulatory process and environmental compliance.

 

 

B.C. government moves forward on action to protect coast

The British Columbia provincial government will be moving forward with consultation around four bitumen spill safeguards while referring to the courts the outstanding issue around B.C.’s right to protect B.C.’s coast, Premier John Horgan announced today.

“We believe it is our right to take appropriate measures to protect our environment, economy and our coast from the drastic consequence of a diluted bitumen spill,” said Premier Horgan. “And we are prepared to confirm that right in the courts.”

Premier Horgan says his government will be retaining expert legal counsel to ready a reference to the courts, adding that it may take several weeks to bring the reference forward. This reference will seek to reinforce B.C.’s constitutional rights to defend against the risks of a bitumen spill.

Crews on spill response boats work around the bulk carrier cargo ship Marathassa after a bunker fuel spill on English Bay in Vancouver, B.C., on Thursday April 9, 2015. (Darryl Dyck/The Canadian Press)

Premier Horgan says this safeguard has generated disproportionate and unlawful reactions from the Alberta government, specifically their decision to ban the import of wines from British Columbia.

“The actions by the Alberta government threaten an entire industry and the livelihoods of people who depend on it,” said Premier Horgan. “We have taken steps to protect our wine industry from the unwarranted trade action by the Government of Alberta.”

“It’s not about politics. It’s not about trade.  It’s about British Columbians’ right to have their voices heard on this critical issue,” said Premier Horgan. “And it’s about B.C.’s right to defend itself against actions that may threaten our people, our province and our future.”

The Premier adds that consultations will begin soon on the remaining four safeguards announced in January by Environment and Climate Change Minister George Heyman. These safeguards include:

  • Spill response time
  • Geographic response plans
  • Compensation for loss of public and cultural use of land
  • Application of regulations to marine spills

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