Landmark Toxic Site Deal Struck : Environment: A developer and six chemical firms will buy the Houston neighborhood and pay more than $207 million in damages to families.

Six chemical companies and a real estate developer have agreed to buy a Houston neighborhood and pay for the college educations of 700 children who live there in what is believed to be the largest settlement of lawsuits over a toxic waste dump in U.S. history.

Children with severe illnesses, such as leukemia and birth defects, will receive millions of dollars each.

In all, the developer, the chemical concerns and their insurers will pay $207.5 million in damages to 1,700 parents and children, in addition to the cost of buying the homes next to the toxic waste dump known as the Brio Superfund site. The 58-acre former dump is located 20 miles southeast of downtown Houston.

“There isn’t any happiness in this,” said attorney Joseph D. Jamail, who represented many of the families. “How can they be happy with sick children?”

The settlement brings to a close one of the most contentious disputes in the history of the Environmental Protection Agency’s Superfund program, which was created by Congress to clean up the nation’s worst toxic sites. The Brio fight divided a community, closed a school and left hundreds of people disillusioned and frightened.

The settlement was reached Thursday just as the lawsuit consolidating most of the claims was about to go to trial. The total payout includes amounts from previous settlements with the companies involved in the dispute.

The insurer for Farm & Home Savings Assn., the Missouri thrift that developed the subdivision, agreed to buy out the mortgages of 212 families still living near the waste dump who were part of the lawsuit. The insurer also agreed to pay those families and other plaintiffs an additional $128 million in damages.

The fate of the other 430 or so houses in the subdivision is uncertain.

Six companies that used the site to dispose of wastes settled with the families. The largest amount, $39 million, came from Monsanto Co., which had sent the most toxic chemicals to the site for burial in unlined holes in the ground.

The $207.5-million total is the largest ever in a toxic waste case, said Lois Gibbs of the Citizens Clearing House for Hazardous Waste. Residents of Upstate New York’s Love Canal, including Gibbs, received $20 million in 1985.

The defendants did not admit wrongdoing. Loren Wassell, a spokesman for Monsanto, said the company believes that no one was injured by exposure to chemicals from the Brio site. He said Monsanto settled to avoid the costs of litigation.

The EPA, a focal point for community anger for the past three years, maintains there is no danger to residents or to students at a nearby elementary school.

“If there were any kind of contamination problem or public health threat, we would have been the first people to call for closure of the school and other actions,” said Roger Meacham, an EPA spokesman in Dallas.

But the 10-year-old school was closed in March after experts hired by the school district found health risks to the children and teachers.

And the EPA reassurances still sound hollow to parents such as Donna Black, whose son has severe illnesses she associates with the toxic dump 250 yards from their house in the Southbend subdivision.

“We couldn’t, in moral consciousness, sell this house to another family,” Black said. “On top of that, we couldn’t afford to move because of the tremendous medical bills for our son.”

While Black said Friday that her family had not learned the details of the settlement, as plaintiffs their house will be bought by the insurers and they plan to leave immediately. But even escaping has not diminished her bitterness toward the EPA.

“I don’t have any good thoughts or feelings about the EPA,” Black said. “I don’t think they can be trusted.”

The struggle was kept alive by the community’s tiny weekly paper and its feisty co-publisher, Marie Flickinger, despite complaints from advertisers and a decline in revenue that threatened to shut down the paper.

“I just couldn’t not fight the EPA when I saw so many kids getting sick,” Flickinger said.

The Southbend subdivision was built in 1982, the same year the Brio refining site next door shut down. By that time, Brio’s pits contained an estimated 245,000 cubic yards of toxic material, including such suspected carcinogens as vinyl chloride from Monsanto.

The site was placed on the Superfund list of the nation’s worst toxic sites in 1985. But the EPA maintained that the neighboring area was safe even after residents began to notice what they believed was an increase in miscarriages and other serious health problems.

Attorney Jamail said his expert witnesses found sharp increases in rare illnesses associated with toxic wastes. He said they had proven that toxins migrated beneath the subdivision as well as into the water system and the air.