Property owner makes $900K claim against city as state agency calls for cleanup

Historic Arsenal Park, a property owner represented by attorney James R. Arnold, has filed a $900,000 claim against Benicia, saying toxic substances were released on the property by industrial tenants during the city’s ownership, City Attorney Heather McLaughlin told the City Council in a Jan. 27 report.

McLaughlin wrote that the company and its attorney also are “making claim for continuing nuisance, trespass, and negligence.”

She said the company filed the claim Dec. 23, 2014, and is seeking damages, injunctive relief or both for the investigation and remediation needed to comply with enforcement action by the California Department of Toxic Substances Control (DTSC).

The Council currently plans to address the matter during the consent calendar portion of Tuesday night’s meeting. Items on the consent calendar are decided without discussion by a single vote, though anyone can request that an item is considered separately.

McLaughlin, who is recommending the Council deny the claim, wrote, “Claimants allege that the city of Benicia purchased the (former) Benicia Arsenal in 1964 or 1965, and then leased out the property to various industrial tenants.

“Claimants further allege that title was later transferred to Benicia Industries Inc., in 1975.”

In addition to claiming that during city ownership the toxic substances were released by industrial tenants, the company also says that the city owned and controlled the sewer and storm drain system, including those that service the Historic Arsenal Park (HAP) properties, and that sewer waste from the claimants’ properties go through the city’s waste treatment system.

Cleanup of the Arsenal has been a concern for decades.

The claim stems from two remediation orders issued by DTSC on June 24, 2014, one of which concerns HAP.

The orders apply to HAP properties listed by address as 938, 940, 942, 945, 946, 952 and 954 Tyler St.; 963, 965, 967, 969, 971, 973, 977, 979, 981, 983, 985, 989 and 991 Lincoln St.; and 900 and 954 Jackson St.

Two properties belonging to Benicia International Associates, at 711 and 750 Jackson St., are in the DTSC orders.

Requests for comment were sent to HAP and Arnold, to the Benicia Industrial Park Association, Benicia Chamber of Commerce, the Council and other officials, but none replied by press time. City Hall was closed Thursday for a holiday.

In the HAP section of its orders, the DTSC contended the Army began a variety of operations in the Arsenal in 1876 that included cleaning and repair of small arms with such metal treatments as acid, solvent and caustic baths, degreasing, painting and applying anti-corrosion treatments to small arms weapons, electroplating and incineration.

In addition, the Arsenal was used as a small arms test range. Onsite underground fuel tanks stored petroleum products, the report said, and the site had boilers and forges as well.

Aerial photographs of the Arsenal during its history showed 300 buildings, two motor pools, NIKE missile repair plants, an explosive holding area, and a network of 109 munitions storage sites called igloos.

“When the Army owned and operated the site, both the sewer and storm drain systems discharged domestic and industrial wastes without treatment directly into the Carquinez Strait,” the DTSC order said.

The city of Benicia is a respondent in the case because it is a former owner of the land and drains.

When the Arsenal closed, the Army sold it to Benicia for $6 million. Benicia Industries, a private developer, financed the purchase in exchange for a 66-year master lease for the development and operation of the Arsenal properties as an industrial center for Benicia, the report said. At that time the Army delegated investigation and remediation of the Arsenal to the U.S. Army Corps of Engineers.

“The city bought the HAP property in 1965 and subsequently parceled, leased and sold them for use by various industries,” the order said. The land is bound by Jackson Street, Lincoln Street and Polk Street, and includes the former Army 50 series complex and Building 120. It’s about 200 yards north of the Strait, from which it is separated by a large parking area and Bayshore Road, and primarily is used as office and commercial space.

Groundwater can be as shallow as 10 feet or less below the surface, and the report said it’s contaminated with volatile organic compounds (VOCs) that later can pose a vapor intrusion risk.

During the city’s ownership, sewer and storm drains also poured contaminants into the Carquinez Straits, the DTSC said.

Benicia modified and diverted the sewer outfall, but not the storm drains, in 1969 and 1970, but as late as 2004, trichloroethylene (TCE) and its breakdown products still were released into the strait’s waters, the orders said.

HAP itself is a respondent, based on ownership and operations, since it bought or leased property from Benicia after the Army left, the orders said. The buildings were used for office space and commercial rentals through 1981, the report said.

An earlier Army report indicated that there was “evidence of beneficial reuse of the parkerizing (anti-corrosive treatment) vats and former machine shop,” but the DTSC findings are that “beneficial use” of former Department of Defense land is defined as use by subsequent landowners or lessors in ways that would either mask contamination caused by DoD or continue contamination in the same way.

“Parkerizing” is the trademark name for phosphating during the process of zinc or manganese coating.

Again, waste fluids were disposed into existing sewer systems that discharged into the strait until 1970, the document said.

In 1998, the Corps of Engineers began the first of several investigations of the Arsenal in compliance with the Defense and State Memorandum of Agreement with California, which let the state comment on, but not oversee, remedial activities at the Arsenal.

Among its actions, the corps removed several underground storage tanks, but didn’t bother owners who were “beneficially” reusing the Arsenal’s features or adding to the area’s contamination.

The Corps’s expanded site investigation, dated September 2005, concluded that the Army 50 series complex and Building 120 appeared to be the TCE sources that could be attributed to Army activities. It also found lead contamination of soil south of building 58A.

TCE also apparently was carried by city-owned sewer and storm drains, according to a Dec. 7, 2004 letter from Brown and Caldwell, an engineering company with offices in Walnut Creek.

Building 50 had many tanks for weapons parkering, and TCE may have been used as a degreasing solvent, the report said. Building 120 was used for electroplating, which involves the use of copper, nickel, cadmium, chromium and cyanide.

The site investigation documents reported not only TCE but also cis-1,2 Dichloroethene (1,2 DCE) at or near the Army 50 series complex, as well as the release of lead to soil and groundwater in the area.

The Brown and Caldwell October 2004 report concluded that groundwater had been contaminated with VOCs, TCE, 1,2 DCE and vinyl chloride, particularly along the west wall of Building 57 and the east side of Building 120, and that the toxins had migrated offsite to the area’s lowlands to the south and southeast.

Heavy concentration of lead in soil south of Building 58 also was found.

Concerns about conditions in the old military weapons site have been aired for years.

A March 1994 archives report on the Benicia Arsenal by the Army Corps of Engineers was titled “Defense Environmental Restoration Program for Formerly Used Defense Sites: Ordnance and Explosive Waste Chemical Warfare Materials.”

It focused on the large amount of shipments of chemical warfare materials (CWM) and ordnance and explosive waste (OEW), especially during open storage.

The report said neither Benicia Industries nor Exxon Oil Company, which operated the Benicia refinery now owned by Valero, reported any OEW or CWM “incidents.”

Benicia Fire Department and Benicia Police Department personnel had reported “anecdotal evidence,” including the finding of aluminum shrapnel, landscapers’ discovery of a hand grenade and the finding of an empty 105 mm Howitzer round during a cleanup of lead contamination.

However, the report said the Corps’s inspection of the area “revealed no evidence of OEW or CWM.”

An April 1997 supplement to the March 1994 report stated that “Although CWM was clearly present at the Arsenal during (World War II) and then returned to the Arsenal after the war, it appears unlikely any of the mustard was disposed of on the Arsenal property.” Only one incident involving leaks was noted in the report, and that container was pushed off a dock into Suisun Bay, and only a few chemical rounds required decontamination, none of them involving mustard.

The update said nothing remains of known or suspected CWM storage igloos or magazines.

Conventional ordnance was returned the the Arsenal after WWII, some disposed of on Arsenal property and others dumped offshore.

The suspected demolition area on the refinery property was used as a small arms firing range, the report said, but, “We cannot confirm use as a demolition area.”

Despite this, the revised report confirmed the previous recommendation that the Arsenal should have a Risk Assessment Code of 1, considered hazardous, and that any development should be done with caution.

In 1999, Benicia resident Marilyn Bardet, speaking for a citizens’ group called ComPACT, she said no standards existed for cleaning up such former military arsenals as the one the U.S. Army operated in this city for more than a century.

“Ordnance can surface years later,” Bardet said in interviews that year. “With erosion, landslides and earthquakes, it can come out of the ground like splinters out of flesh.”

In an April 14, 2006, letter to Katherine Greene, project manager of the U.S. Army Corps of Engineers, Randy Potter, representing Historic Arsenal Park, asked that post-military buildings be given military numbering addresses in Corps documents, and said trichloroethylene had been used in the Arsenal during parkerizing.

In his letter, Potter said he believed that process had been used all over the Arsenal.

By 2010, Benicia had spent $500,000 to develop a Lower Arsenal Mixed Use Specific Plan and had started reviewing a Draft Environmental Impact Report (DEIR), both later rejected, particularly as the condition of the Arsenal remained clouded.

The area was designated by the Department of Defense as a formerly used defense site (FUD) under the 1986 Defense Environmental Restoration Fund, one city resolution noted, explaining that a preliminary risk-hazards assessment had been done at the Arsenal by the Army Corps in 1993, which gave the Arsenal a “Critical II” risk-hazards ranking.

That resolution cited the federal Comprehensive Environmental Response, Compensation, and Liability Act, saying it compels the Department of Defense to protect the public from potential hazards attributed to former military activities and contending the department never intended to examine all Arsenal land.

The resolution cited reports identifying 389 specific sites for investigation, and noted that DTSC regulates FUD cleanups in California and in 2007 the agency had said characterization of the Lower Arsenal is incomplete.

It also noted that property owners or potential developers would be required to pay any cleanup costs up front before seeking recompense from the Department of Defense.

The city resolution also asked legislative officials, “for the sake of public health and safety” as well as the area’s “economic future,” to seek a cleanup collaboration between the Department of Defense and DTSC, either voluntarily or by order.

The resolution was approved unanimously by the City Council on Feb. 2, 2010.

Mayor Elizabeth Patterson wrote a letter the next day to Benicia’s federal and state elected officials, as well as others, sending them copies of the resolution and seeking both congressional and state legislative support to ask DTSC to “exercise its authority to cause the cleanup of the entire former Benicia Arsenal with specific priority given to the Lower Arsenal area for the former Benicia Arsenal.”

She continued that with a voluntary agreement, “DTSC could also make sure that certain processes were followed and completed,” such as determining appropriate remediation and acceptance of public input, which she said was “shut down” by the U.S. Army Corps of Engineers when it disbanded the Restoration Advisory Board, initiated by petition in 2000 and made up of residents, property owners and business operators.

Despite the resolution’s findings that the Department of Defense funding for FUD cleanup “remains virtually indefinite,” potentially extending beyond 2015, the city learned on Sept. 8 2010 that there was no federal money for any examination and cleanup.

The previous day, the Council had a heated debate about the potential cleanup, with Mark Hughes, currently the city’s vice mayor, saying he and other Council members were caught off guard. “When we authorized the resolution, we thought we were asking for one thing. The state came back with another.”

At that meeting, the Council chose Patterson and Councilmember Alan Schwartzman as its Arsenal subcommittee.

Attorney Dana Dean, representing AMPORTS, the firm that operates the Port of Benicia in the Arsenal, wrote the Council Sept. 7, 2010, saying DTSC was determined to issue Unilateral Imminent and Substantial Endangerment Orders, which could compel landowners like her client and the city to underwrite the investigation and cleanup according to DTSC requirements.

Complying with endangerment orders costs on average $4.4 million, Dean wrote. Failure to comply could result in fines of up to $25,000 a day, she added.

The Council was reassured somewhat after a subsequent conference call with DTSC Deputy Director Stewart Black that property owners could continue to develop the Arsenal.

Black also agreed with Council members that a Unilateral Imminent and Substantial Endangerment Order would be an onerous weight on property owners and the city.

He promised instead the lighter voluntary agreement that would allow landowners to sign a consent agreement to do their own investigation and mitigation so they could continue to operate existing businesses and build on their properties.

Writing in The Benicia Herald about those tense days, former Councilmember Mike Ioakimedes wrote that the Council had chosen its words carefully.

“What we’d intended as a formal notice to the U.S. Army that there was still cleanup work to be done in the Lower Arsenal, and that any cleanup work should be done with no cost or interruption to the current property owners, had exploded into a state agency preparing to issue a regulatory order that would drive a spike right into the heart of our community’s biggest and most important job and revenue creator.”

He said the city’s intent in passing the resolution was to name the Army as the responsible party, so it would have the sole responsibility for the cost of the cleanup, which should be done to standards set by DTSC.

The city wanted the state, through DTSC, to pursue a voluntary cleanup agreement or order so property and business owners would have flexibility should their sites need Army cleanup, similar to howcleanup was handled on the Tourtelot property, Ioakimedes wrote.

An Imminent and Substantial Endangerment Order would compel property owners to characterize their property for potential contamination, then clean it up, he wrote. Should another party, such as the Army, be determined as responsible for the contamination, the property owner could sue to recover the costs.

Some property owners were given a private advance notice of the proposed endangerment order during a meeting with Patterson and McLaughlin. “We didn’t have much time: the order was scheduled to be issued on the 10th,” he wrote.

In a telephone conference with Benicia’s then-Assemblymember Mariko Yamada, Ioakimedes learned that some state officials had thought, after several meetings between DTSC and some city officials, the endangerment order was what Benicia was seeking.

Ioakimedes wrote that he also learned from then-U.S. Rep. George Miller that no Department of Defense money would be available for the cleanup.

The city hired its own consultant, ERS, a Walnut Creek amalgam of engineering, insurance and legal firms, for support and representation.

In May 2012, after multiple meetings with the city, Charlie Ridenour, branch chief of the cleanup program of the DTSC’s Brownfields and Environmental Restoration Program, said the bulk of the Arsenal would not be impacted by the agency’s order.

In addition, he said, much of the district had been removed from the DTSC Hazardous Waste and Substances Site List, called the Cortese List, that is used to identify hazardous materials release sites.

However, he said that some properties had been recognized as having hazardous materials releases that would require some response actions.

“We’ve come a long way from potential DTSC orders for a big chunk of the former Army Arsenal base to approximately three sites in the Lower Arsenal,” Mayor Elizabeth Patterson said after his announcement.

But June 24, 2014, DTSC issued two remedial action orders from Ridenour for properties in the historic Benicia Arsenal.

One of the orders focused on Tyler, Lincoln and Jackson street parcels, collectively known as Historic Arsenal Park, represented by Gordon Potter.

On those properties are Benicia Youth Soccer League, photography, artist and dance studios, business offices and an arborist. The other was for 711 and 750 Jackson St., identified as owned by Benicia International Associates.

Among the responding parties named were the city of Benicia and the U.S. Army Corps of Engineers.

Since the orders were issued, McLaughlin has given periodic brief updates on Arsenal developments during Council meetings, primarily updating members about her conversations with DTSC officials and about planned meetings with affected property owners.

The Council will meet in a closed session at 6 p.m. Tuesday to discuss several legal and labor-personnel matters.

The regular meeting starts at 7 p.m. Tuesday in the Council Chamber of City Hall, 250 East L St.