Toxic Cleanup at Belmont May Cost Millions

The Los Angeles Unified School District may have to pay millions of dollars extra to find and clean up chemical hazards at its new downtown high school because top officials failed to act on warnings five years ago that they bought the land without adequate environmental tests, interviews and records show.

The warning came in a 1994 memo, distributed to then-Supt. Sid Thompson and his top assistants, that concluded a crucial environmental study provided by the seller of the Belmont Learning Complex property didn’t cover the most basic environmental issues.

Although the memo prompted high-level discussions within the mammoth district, no immediate action was taken by officials, who felt intense pressure to quickly build the new high school, which is now half completed. They chose to deal with any toxic hazards as they came up during construction.

Now that decision has come back to haunt them. Because of renewed safety concerns, the district faces a $700,000 bill for a new environmental assessment to answer questions the first study missed, say the experts involved. And the new assessment, they add, will probably recommend a fix-it plan that could add as much as $10 million--in part because it is expensive to extract contaminants around and under a half-finished building.

Meanwhile, construction delays caused by the new environmental testing threaten to trigger $10,000 a day in penalties the district would have to pay to its contractor, Temple-Beaudry Partners. The partnership has filed notices anticipating claims for delays of up to $3.4 million--a figure that could balloon if a cleanup is required.

“I think somebody dropped the ball,” said Barry Groveman, the environmental lawyer leading the experts investigating toxic problems at the site just west of downtown at Temple Street and Beaudry Avenue.

“The obvious, correct and prudent way to have tackled this problem . . . was not followed,” said Groveman, whose team will present its work plan for additional tests to the Board of Education today.

District Took ‘Calculated Risk’

Richard K. Mason, the district’s general counsel, acknowledged Wednesday that school officials took a “calculated risk” when the district purchased the Belmont property based upon a “minimally sufficient” environmental report done by the seller.

The trouble, he said, was that the unit charged with building the Belmont complex didn’t follow through with more environmental testing before grading and construction.

“We certainly are in environmental problems now,” he said.

The Belmont property has a number of potential chemical hazards including methane seepage, which could collect under buildings and explode, unknown oil products floating on shallow ground water and contamination by cancer-causing chemicals such as benzene.

The new environmental assessment was ordered by the state Department of Toxic Substances Control last year after two local legislators--Assemblyman Scott Wildman (D-Los Angeles) and state Sen. Tom Hayden (D-Los Angeles)--criticized the district for purchasing several former industrial properties without conducting adequate investigation.

With a price tag expected to approach $200 million, Belmont is already considered to be the most expensive high school in history, partly because it is built on a hillside and includes a retail center.

The district acquired the 24-acre site, which includes portions of an abandoned oil field, in March 1994 from a partnership that included Shimizu Corp. of Japan.

To qualify for substantial tax benefits in Japan, Shimizu had a March deadline for selling the property, said Mason and Robert Niccum, the district’s real estate manager.

School officials were eager to close the deal because the $30-million price, even in a declining market, was dramatically less than the $100 million Shimizu had paid and the $37 million outside appraisers said it was worth.

Shortly before the sale closed, the California Department of Education told the district it needed to perform an extensive environmental study on the property as a condition for receiving state funds for the project.

Instead of going through their own lengthy bidding procedure to hire an outside environmental contractor, district officials took the unusual step of asking the seller to perform the study just days before a crucial state hearing in Sacramento.

The attorney for Shimizu said she remembered the demand coming on the Friday preceding a Presidents’ Day holiday.

“We engaged a well-known, well-considered consultant . . . who was willing to work all weekend . . . and into the next week to get the report accomplished, and that’s what they did,” said attorney Timi Anyon Hallem. She said it was not customary for the seller to perform that work.

Dominic Shambra--the district’s bond manager who would be put in charge of building Belmont--chided the district’s facilities chief about the length of time it takes his department to complete an environmental review. In fact, Shambra had bragged that Shimizu produced the complicated report in 48 hours.

Stung by the criticism, district staffers responded with a memo written by real estate director Niccum on April 4, 1994--three weeks after the land deal closed.

“The [Shimizu] study fell far short of examining and reporting on matters which the district would have required of a consultant,” Niccum wrote in the three-page confidential memo. He said that the developer “failed to address many of the issues which need to be explored for district projects.”

Among the things the Shimizu study failed to do, Niccum wrote, was quantify hazardous substances and contaminants; determine the degree of contamination; locate all abandoned oil wells; or suggest the methods and costs of how to fix any environmental hazards.

Such information is “fundamental” to a thorough environmental report, and even administrators without technical backgrounds should have seen the memo as a call to immediate action, Groveman said. He added that his team is now investigating these issues.

Mason said he was the “gate keeper” of the memo, and document logs show that it went to Thompson; then-Assistant Supt. Ruben Zacarias; Shambra; former facilities chief C. Douglas Brown; current chief administrative officer David Koch, and director of environmental health and safety Suzie Wong.

Zacarias, now superintendent, said through a spokesman that he received the 1994 memo but that his responsibility at the time was for instruction, not building schools. Former Supt. Thompson couldn’t be reached for comment.

Shambra, who retired last year as the district’s director of planning and development, recalled that the memo sparked high-level discussions, possibly a meeting, but no action.

“I think everybody said, ‘I’m not responsible, that’s not my role,’ and in those days that was pretty much the way it was,” said Shambra, adding that the consensus was “when we start construction and we find problems, we’ll mitigate it.”

Environmental Problems

Mason said he saw the memo more as a warning for the future: “Don’t do this kind of thing because you’re going to get yourself into environmental problems.”

The environmental problems at Belmont, he said, were the responsibility of Shambra. Mason said Shambra’s office should have found and neutralized any environmental problems before sinking the first concrete piling at Belmont. He said Shambra chose to use outside consultants rather than rely upon the district’s own environmental team and was closely advised by outside counsel David Cartwright from the firm of O’Melveny & Myers.

“If David felt there were issues related to the environment, there were adequate environmental resources at his firm that he could have consulted,” said Mason.

Cartwright said the environmental problems were handled correctly. Consultants have worked with state and city officials to identify and correct hazards that arose during construction, he said. Moreover, advance exploration for methane would not be helpful because the extensive grading of the property changes seepage patterns, Cartwright said.

In the work plan submitted to the board today, the district’s new consultants said they will drill 12 wells to sample soil and 22 ground water monitoring wells and will install 48 probes to monitor gas in the soil.

Angelo Bellomo, vice president of Environmental Strategies Inc. and Groveman’s colleague on the safety team, said the study will prescribe measures to eliminate the contaminants to the extent possible and design safety systems to deal with whatever remains.

He said it is likely that piping systems will need to be constructed beneath buildings with pumps to suck away methane gas.

Bellomo said the corrective work could cost as much as $10 million, although the exact amount won’t be known until the tests are complete.