City Council Clears Plan for Cleanup of High-Rise Site

In a move that could clear a major hurdle blocking a 40-story, 400-unit apartment tower, the San Diego City Council on Tuesday agreed to a tentative settlement that will lead to the removal of contaminated soil and water from the site of the proposed high-rise.

If approved in federal court on Jan. 26 as expected, the settlement involving the property owners and their insurance companies will help the downtown redevelopment agency, Centre City Development Corp., put to rest a problem that has dogged it for almost four years.

That was when city officials discovered that the northwest corner of Market Street and 1st Avenue, a premier redevelopment block across from Horton Plaza, was the site of illegal dumping and storage of hazardous wastes, corrosive materials such as acid and metal sludge, copper, lead, nickel and cyanide.

The discovery forced an immediate stop to redevelopment plans for the block, part of which is owned by the agency. The ground water was also found to be contaminated, though the heavy metals were relatively small components of a much larger gasoline and diesel fuel plume that originated on nearby blocks and still has redevelopment officials vexed.

Officials charged the company on the site--Super Plating Inc.--with contaminating the land. The electroplating company’s general manager, Sanda Lazovich, pleaded guilty to a felony count of knowningly disposing of acid and metal sludge in a trash bin, and its chief financial officer, Thomas Nerat, pleaded guilty to a misdemeanor count of improperly storing metal sludge in an unlicensed facility.

The company was also ordered to clean up the site, but those plans were ditched when the company filed for bankruptcy and closed.

As a result, the redevelopment agency sued the property owner, the Starr Children Trust, which was also sued by its eight insurance companies. The three sides entered a series of negotiations that led to the settlement. In a secret session Friday, the agency’s board of directors approved the settlement.

Under its terms, the insurance companies will pay $660,000--which has been deposited with the agency since July--to clean up the contamination. The property owner agrees to demolish the remaining buildings as well as to guarantee the cleanup, even if it costs more than $660,000, Pam Hamilton, the agency’s top executive, said.

The agency, in turn, agrees to buy the land for $856,000, after it is cleared of pollution. Hamilton said that price is “above fair market value” but explained that the cost is necessary because of the added problems of the toxic wastes.

“I’m delighted with the result,” she said.

If the settlement is approved, demolition and cleanup should begin within three months. The entire project, including excavation, is expected to take about nine months.

After the contaminated dirt is removed, and the problem with the underground plume is resolved, the block will be ready for Courtyard, a $52-million apartment tower proposed by Tutor-Saliba Corp. The redevelopment agency picked the company in a competition, and the two have entered negotiations.