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Tuesday, Mar 21, 2023

Developers Wash Hands of Dirty ‘Clean-Tech’ Site

Los Angeles Mayor Antonio Villaraigosa had made a commitment to develop a corridor of clean-tech businesses a hallmark of his administration.

But his inability to carry through on that pledge is a prime example of just how difficult it is to build on brownfield sites.

The city has been trying to funnel green and high-tech businesses into a three-mile stretch of old industrial land along the Los Angeles River southeast of downtown. Its centerpiece is a 21-acre lot that was the location of a train depot, and a plant that made school buses and fire engines.

Vehicle maker Crown Coach Corp. vacated the site at 2425 E. Washington Blvd. in the late 1980s. More than 20 years later, the location sits vacant and in the hands of its fifth developer in three years – with no guarantees the property will be redeveloped.

“Everything is a function of will it and can it pencil out,” said Alex Glickman, an attorney at the Century City office of insurance brokerage Arthur J. Gallagher & Co. who specializes in brownfield developments.

Among the chief problems at the Washington Boulevard site is deep and complex contamination that built up between its first use in the late 1800s until it was abandoned in the mid-1980s. Even before Crown Coach opened its first plant in the 1930s, it had been used as a train depot.

Some of the contamination was discovered about the time the state bought the site for a prison in 1988; some 40,000 tons of contaminated soil were removed in 1992. However, the state never moved forward with the prison due to community opposition to the project.

Since then, the contamination was discovered to be more pervasive. Contaminants include heavy duty solvents such as trichloroethylene (TCE), a volatile organic liquid used to clean metal parts. It can cause cancer if it leaches into groundwater or is breathed in high concentrations. Other hazardous include heavy metals such as lead and compounds found in dirty oil.

Dangerous levels of TCE and similar organic compounds have been found as deep as 80 feet below the surface. The clean-up for those deeper layers alone is estimated at more than $3.3 million. But that’s not the half of it.

According to a remediation study approved by the state Department of Toxic Substance Control, the site is going to require intricate cleanup systems, including wells that extract contaminated water and fumes from volatile solvents in the soil.

What’s even more troubling to potential developers is that the full extent of the contamination isn’t known, though by one estimate it could go as deep as 220 feet. Without certainty about the contamination level, there is uncertainty about how long a cleanup will take – and most of all, what it will cost.

In fact, the city’s Community Redevelopment Agency only spent $15.4 million to buy the site in 2007 after a state law was passed two years earlier that limited the legal liability of property owners that acquire brownfield sites – though the city has indicated a willingness to share the cleanup costs.

Since then, the city has entered into discussions with several different companies in an effort to jump-start development of the site and the clean-tech corridor.

The agency first tried to bring Italian rail-car maker AnsaldoBreda Inc. to the site, but the deal unraveled when the company pulled out in 2009. Other failed deals involved Santa Clara solar panel maker Applied Materials Inc. and Coda Automotive Inc., an L.A. electric-car manufacturer.

Earlier this year, Culver City developer Genton Property agreed to buy the site but wasn’t able to come through with financing. Now, the city is in negotiations with Trammel Crow Co., a division of CBRE Group Inc., to buy the site.

Unlike the other parties, Trammell Crow has a track record in developing brownfield sites. Its environmental asset services unit has worked on multiple projects, including constructing a 156,000-square-foot office building on the site of a former Lockheed Martin Corp. aircraft engine factory in Burbank a decade ago. That property, better known as the Skunk Works site, had similar contamination issues.

Steve Andrews, a policy adviser to Villaraigosa and member of the California Redevelopment Associations’ Brownfields Committee, said the city is committed to redeveloping the site.

“In the city of L.A., only 6 percent of our land is zoned for industrial and when you run across brownfields that are not being used productively in (producing) taxes and providing jobs, a productive use of that land would be a very good thing,” Andrews said.

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