In Manhattan Beach : Methane Vapors Halt Home Sales
The near-pastoral, wide-open setting of Manhattan Village, a new-home project in Manhattan Beach, belies concerns that the developer has been working to assuage.
Ever since methane vapors were discovered earlier this year at the 76-acre site and adjacent 21-acre planned golf course, Chevron Land & Development Co., a division of Chevron Corp., has been conducting tests--not only to reassure residents but also to satisfy the state Department of Health Services and the state Department of Real Estate, which shut down sales at the partially completed, 515-home community on March 22.
“And we won’t permit sales until we get a decision from the health department,” Bob Gilmore of the state Department of Real Estate said.
Ricardo Notini of the state Department of Health Services indicated that a decision is “still at least a month away” but stressed, “We don’t see any possibility of a fire or explosion. We’re focusing more on health hazards that might develop during the next 20 years.”
The shutdown may be a first in housing history involving methane gas.
“I’ve been here since 1975, and I can’t recall anything similar,” Gilmore noted.
From the day construction started on the models in late 1982, the project was unusual. It’s not every day that vast acreage becomes available in a Los Angeles-area beach city. The site was, in the words of the developer, “the last major parcel of land approved for residential development in the South Bay.” The project is Chevron Land’s first solo venture as a residential developer.
The site was part of the 186-acre, Standard Oil tank farm, built in the 1920s to house holding tanks for fuel used in steam engines and steamships. After 10 years of city processing, the first project on the property, now known as the Manhattan Village Retail and Entertainment Center, was built four years ago on 37 acres fronting Sepulveda Boulevard. The homes are being built between Marine and Rosecrans avenues, just east of the shopping complex.
No more than a couple of miles west on Rosecrans, in an area called El Porto, gasoline-based hydrocarbon vapors found in five homes along the Strand prompted city officials to ask Chevron Land to test the Manhattan Village residential site.
Carl Abel, Manhattan Beach director of public services, recalled how it all started:
“They (Chevron USA Inc.) were putting in a new pump station in El Segundo, and they dug down and smelled gasoline. Then they tested and found the same vapors in El Porto.”
The vapors at Manhattan Village and El Porto are “totally different,” he emphasized. Modris A. Tidemanis, Chevron Land project manager, explained:
“Gas vapors are more flammable, and methane is a slow product of natural decomposition.”
Yet, in March, pressure of underground methane gas caused an explosion in the Fairfax district of Los Angeles, injuring 22 people and demolishing a discount-clothing store.
“The Manhattan Village situation is nothing like the Fairfax district’s,” Abel said, “because the methane gas in Manhattan Beach is not under pressure. The concentrations aren’t great enough. If there was any danger of explosion, we would have evacuated all of the people over there.”
The concentrations aren’t great enough, he explained, because the methane vapors have been coming from a mixture of old crude oil, which leaked over time from the football-size concrete storage tanks, and dirt. Most of this mixture was buried 5 to 10 feet beneath the site before Chevron started building, but some--which Tidemanis described as “above the lower-explosive limit"--was buried, he said, “below the site, generally 20 to 30 feet deep, where there is no place to ignite.”
Buried the Mixture
Methane is explosive at 53,000 parts per million, and Tidemanis conceded that “it’s true that we’ve discovered methane levels higher than this but only at these greater depths. No methane gas has been discovered above the ambient level or surface of the ground.”
When burying the oily material, “Chevron didn’t realize that it would deteriorate and create methane gas,” Abel explained. Tidemanis said that the plan to bury the mixture was reviewed by all of the necessary regulatory agencies and “nobody expected that it could generate methane.”
They didn’t realize it because, as Abel put it, “this was a first, using new technology, and it just didn’t work.”
The vapors are different, but the solution to the El Porto and Manhattan Village problems are similar. Said Abel:
“Basically, the solution is to extract the vapors from the soil--literally suck them out of the ground.”
What he terms “a mitigation system,” which in essence does this, “will be turned on along the Strand on June 17,” he said. Chevron USA already “put in a sealant as a temporary solution (for the five affected homes) until the vapor well system is installed,” he continued, “but this new system was designed to remove the hydrocarbons in three to six months or at least reduce the vapors to a level that shouldn’t hurt anybody.”
‘No Immediate Concerns’
An area from Ocean Drive up to the Chevron USA property in El Segundo has also shown some evidence of gasoline-based vapors, but these are 100 feet underground “with no immediate concerns to homeowners,” he said. However, these will be addressed after the Strand, he added.
So far, he noted, a vapor problem hasn’t been discovered elsewhere in Manhattan Beach, except in Manhattan Village. Said Tidemanis:
“We’ve tested 70 homes and found no methane at the surface in any part of the residential project, so there is no danger to residents. Even in the (planned, 21-acre) golf course, it’s below the ground, and our venting system will take care of that.” It will also take care of the elevated gas levels found deeper in the ground, he added.
The venting system of underground pipes is yet to be designed, but Chevron Land is having that done this week. “It will be a preventive system so there will be no (vapor) buildup over time,” he added. A pilot program has already been installed, and the final system is expected to be in operation within a month.
In the meantime, Notini voiced his department’s concerns. Among them:
--"Chevron tested to characterize the types of gases present. We will review this and determine if there is a health risk.” Benzine, a carcinogen, is present in what he termed “very low levels” in crude oil. “So a trace amount of it at Manhattan Village would be no surprise.”
--"We know that there is some methane gas underneath some of the homes, but we haven’t found it seeping in through cracks in the foundations, because these are new homes, but what about 10 or 20 years from now? We recognize the concern, so we would require a long-term monitoring program.”
The $40-million, 394-room Radisson Plaza Hotel is also being built on the old tank farm on about 20 feet of the oily waste, he said. However, according to Tidemanis, Chevron Land put two vacuum wells in the basement “just in case it has to be vented off” and tested for methane vapors at the shopping center and other projects bordering the homes, including some office buildings and a tennis club.
“During the past couple of months, we’ve completed an extensive investigation of vapors, soil and ground water, and there is no problem anywhere at the surface,” he emphasized. An earlier report that a deep underground aquifer under the housing supplies 15% of the city’s drinking water was not true, he added, saying, “There has been no use of any of that aquifer for drinking-water purposes.”
Underground testing has been completed at the housing and golf-course sites but has just begun at the so-called “border properties.”
Chevron has spent more than $100,000 “just in the investigation stage,” he estimated, and the venting system is expected to cost hundreds of thousands of dollars more. Add that to what Chevron is losing in home sales, and the financial impact is substantial.
So far, the company has closed 158 sales and another 54 are in escrow, which can’t be closed until the Department of Real Estate reopens sales. About a dozen sales in escrow have been canceled, because the buyers “just couldn’t wait,” Tidemanis said.
Construction is progressing on the residential project, but only on the phase under way when sales were stopped. The golf course is expected to be under way at the middle of next month, and the hotel, which is being developed by Century City-based US Hotel Properties Corp., is--as Tidemanis phrased it--"full steam ahead.”
Construction of housing has been delayed, though, by more than two months, he said, and that will probably depress Chevron’s $10-million to $12-million in sales projections for this year.
Cost Is Great
The cost is great, but he recognizes the importance of testing and taking whatever measures are necessary, not only to satisfy state agencies but also to bolster buyer and community confidence. Chevron still has 212 homes to build and sell, not including the ones in escrow, and 158 families already live there, some since first move-ins in early 1983.
“The residents are naturally concerned,” he said, “but we publish regular newsletters and give briefings at homeowner meetings to keep them informed.” Chevron Land is also planning a press conference on the subject this Wednesday at the Manhattan Beach City Hall.
What are the results of such efforts? Positive, he concluded.
That seems to be true from a quick drive-through. There are few resales on the market, although by law, individuals who have already bought in a subdivision can sell, even if the developer can’t. However, sellers and real estate licensees are required to disclose any problems, such as methane gas.
That is a concern, according to Debbie Walmer, a sales agent at Real Estate West in Manhattan Beach. “I don’t think property values are affected that much by this (methane-gas problem),” she said, “but when realtors mention something like methane gas, they’re afraid it will turn off the buyer. Yet, it may not be a liability, because it is a problem, but it is going to be taken care of.”
A couple of Manhattan Village residents expressed the same sentiment. Said Heather Baines:
“Chevron has researched even in the homes and hasn’t found any problems there, so I’m not concerned. I’m far more concerned about making the money to pay off the mortgage.”
Price of Homes
Homes at Manhattan Village aren’t cheap. The Court Homes range from $213,500 to $266,500; the Town Homes, from $255,300 to $315,000, and the Estate Homes, from $343,000 to $470,000.
The owner of a home with a for-sale sign in front of it said that she would sell it for $249,000--"the same as the new ones, but it has $15,000 in amenities in it.” However, she noted, she’s not moving because of the methane-gas problem. She and her husband are relocating to San Francisco because of a job change. Sale of their house has been affected by the methane-gas situation, she figures, because she gets asked a lot of questions about it by potential buyers.
Notini of the Department of Health Services hasn’t seen, as he put it, “anything (at Manhattan Village) to date that is extremely alarming, though I am relying on our medical staff, but compared to other sites, the situation at Manhattan Village doesn’t seem that dangerous.”
More worrisome to him are situations where there are underground gasoline tanks at gas stations. “In West Hollywood, there is a problem where gas seeped out of these into sewer lines, and this is affecting some homes,” he said. Chevron’s check of sewers has been what he termed “encouraging.”
Chevron might have spent less by excavating out the old crude oil before starting construction or capping it with a sealant, he suggested, but capping it could result in a build-up of vapors, possibly resulting in an explosion. So other builders in similar situations might get a feasibility study, he said, “and we would require a site characterization,” to determine if remedies are needed. A site characterization was not required of Chevron, because “we haven’t dealt with this that much,” he added.
Comparable situations are hard to come by, because few if any housing projects have been built on former fuel storage sites, but Tidemanis claims that many housing projects are being built under what he termed “worse situations” than the one at Manhattan Village.
“Many are on old landfills that are producing much more methane than we are,” he said. “In fact, there’s a project in Palos Verdes where so much methane is produced that it is being sold to consumers.
“Methane gas is, after all, the same as the natural gas that’s used in the home for cooking and heating.”
PROBLEM: Crude oil that leaked from storage tanks over the years was mixed with soil and buried 5 to 10 feet beneath parts of Manhattan Village before discovery that deterioration of this oily material creates methane gas.
SOLUTION: Artist’s conception shows network of underground pipes for the site of a new-home project in Manhattan Beach. When installed, the pipes are supposed to vent and pump off methane vapors, preventing a buildup over time.