Enforcement and Assistance in New England
Federal, state and local officials reached agreements with the owners of Brook Village and Centredale Manor to contribute to the cleanup of the Centredale Manor Restoration Project Superfund Site in North Providence, RI. The public comment period has closed and EPA will soon request that the district court enter the settlements. The agreements will generate at least $3.6 million towards the cleanup of the site.
Both parties are limited partnerships whose only significant asset consists of an apartment building that provides affordable housing to the elderly. The apartment buildings are located on the site. Both limited partnerships will generate the funds for the cleanup by refinancing each property’s mortgage with Rhode Island Housing and Mortgage Finance Corporation. As part of the transaction, the parties will agree to continue to operate the buildings as subsidized elderly housing for 40 more years.
The settlements, called a “cash-out” settlement, represent the maximum equity that can be realized from the new mortgages subject to state and federal requirements. Once the two consent decrees are approved by the federal district court, Brook Village and Centredale Manor will:
- pay EPA approximately $1.2 million and $1.9 million, respectively, after the closing of the refinancing transactions;
- pay the State of Rhode Island approximately $104,200 and $172,900, respectively, after the closing of the refinancing transactions;
- place $150,000 each in an escrow account to cover ongoing obligations at the site; and
- pay $68,450 each to the Department of Interior for natural resource damages and assessment costs.
Brook Village will also pay EPA 75 percent of any future insurance recoveries. As a result, EPA expects to receive an additional $360,000. In return, the parties and Rhode Island Housing will be released from any further EPA or State of Rhode Island costs associated with the site, and will receive protection from potential contribution lawsuits by other liable parties.
Brook Village completed construction of its apartment complex in November 1977 and currently provides affordable elderly housing to about 100 residents. Centredale Manor constructed its apartment complex in 1982 and currently provides affordable elderly housing to about 130 residents. Although both building owners purchased their properties after the contamination was generated, they are still legally responsible for the contamination under the Superfund law.
Brook Village and Centredale Manor have been funding and performing cleanup work at the site along with other companies that either operated at the site previously or generated waste material that was taken to the Site. EPA will continue to look to the remaining parties to fund and perform future cleanup work at the site.
In late August, 2003, EPA filed a cost recovery case under the Comprehensive Environmental Response, Compensation and Liability Act (CERCLA or Superfund) against Atlas Tack Corporation (ATC) and its president, M. Leonard Lewis. Trial in the case began in October of 2004. After seven mediated sessions before a magistrate judge and extensive negotiations into 2005, a negotiated settlement of the case was achieved and memorialized in a consent decree signed by ATC and Mr. Lewis on August 2, 2005 and lodged in Massachusetts Federal District Court on December 12, 2005. The settlement is based, in part, on ability-to-pay considerations.
According to the negotiated settlement, Lewis and ATC agreed to pay EPA the principal sum of $2,335,000 plus an additional sum for interest. This sum will be paid in installments over a two-year period. The financial obligations of the ATC and Lewis will be secured by mortgages on properties in Vermont and California. In addition, once the Fairhaven Site is cleaned up, EPA will essentially receive about 95% of the fair market value of the property.
The Town of Fairhaven is also a signatory to the Consent Decree as a settling party. Although EPA did not notice the Town as a Potentially Responsible Party at the Site, ATC sued the Town in a contribution action. In consideration for the settlement, the Town agreed to forego collection of a portion of past due property taxes and penalties owed by ATC on the Fairhaven property.
For more information, visit EPA New England’s Superfund Enforcement Program.