Two recent appraisals for a Jackson Street property that Columbus Parks and Recreation is buying to use as a storage facility show large drops in value after environmental contamination was revealed.
The appraisals, conducted in June by Appraisers Inc. and Valbridge Property Advisors, estimate that the former Machinery Moving Inc. site, located at 1360 Jackson St., is worth between $158,000 and $230,000. That’s about $95,000 to $157,000 less than it would have been worth if the environmental contamination was not there, according to documents provided by the parks department.
On Wednesday, the Columbus Parks Board voted to purchase the property for $205,000 in six annual installments of $34,166.67. The property is owned by Columbus Mayor Jim Lienhoop’s aunt. Lienhoop has recused himself from all negotiations or decisions about the building and has repeatedly referred all questions about the transaction to parks officials handling the negotiations.
After Wednesday’s meeting, Columbus Parks Director Mark Jones said property owner Norma Lienhoop did not receive any special treatment from the city at any point during the negotiations for the property sale.
In its appraisal, Valbridge estimates the value of the property to be $158,000 to $196,000 when environmental contamination is taken into consideration, compared to an estimated $315,000 if there was no environmental contamination on the property.
Appraisers Inc. said in its appraisal that the property is worth an estimated to $192,000 to $230,000 due to the contamination. The property, however, would be worth an estimated $325,000 without any environmental contamination.
Under state statute, the city must have at least two appraisals done on any property it purchases and cannot pay more than the appraised value of the property. The appraised value is calculated by averaging the highest estimated value from each appraisal ($196,000 and $230,000), which came out to $213,000, said Pam Harrell, director of business services at Columbus Parks and Recreation.
“We have to have at least two appraisals and then we take the average of the two,” Harrell said. “That’s the maximum we can pay.”
Finding contamination
The city had the two recent appraisals done after environmental contamination was uncovered, park officials said Wednesday.
An outside contractor hired by the city, Indianapolis-based Ark Engineering Service, determined in January that soil and groundwater on the site were above regulatory levels for certain cancer-causing and potential human carcinogenic petroleum hydrocarbons and estimated that it would cost $95,000 to $133,000 to remediate the property, according to a report dated Feb. 12.
City officials said they are “very confident” that a grant from the Indiana Finance Authority’s Brownfields Program would offset all costs of remediating the environmental contamination on the property. The Indiana Brownfields Program is a statewide program that assists in the redevelopment of brownfield properties.
The U.S. Environmental Protection Agency defines a brownfield as a “property, the expansion, redevelopment or reuse of which may be complicated by the presence or potential presence of a hazardous substance, pollutant or contaminant.”
City officials said during Wednesday’s meeting that they have written documentation, including emails, that Indiana Brownfield Program officials are “committed” to funding remediation of the site, but only if the property is in the city’s ownership — not owned by a private citizen such as Norma Lienhoop.
However, the state has yet to “determine eligibility for funding,” for the Columbus remediation, said Stephanie McFarland, spokeswoman for the Indiana Finance Authority’s Brownfields Program.
“No grant has been approved or issued at this time,” McFarland said in a statement to The Republic. “The Indiana Finance Authority’s Brownfields Program is aware the City of Columbus is working to acquire the site mentioned. Once the city confirms it has finalized the site acquisition, the IFA’s Brownfields program will begin the process to determine eligibility for funding via the Petroleum Orphan Site Initiative.”
The Petroleum Orphan Sites Initiative seeks to help communities across the state address petroleum contamination caused by leaking underground storage tanks that “cannot be addressed by the party responsible for cleanup as a result of an inability-to-pay, bankruptcy or other factors,” according to the program’s website.
The initiative receives funding from the Indiana Department of Environmental Management’s Excess Liability Trust Fund, which currently is funded by an “inspection fee” that the Indiana Department of Revenue levies on every barrel of fuel, said Barry Sneed, Indiana Department of Environmental Management spokesman.
“That tax is then passed down to the consumer in the form of a $0.01 per gallon gas tax,” Sneed said.
Soil borings
In an executive summary provided by Ark Engineering Service in Phase I and Phase II environmental reports, company officials said they did six soil borings to collect soil and groundwater samples. The company also collected wipe samples within the interior of the buildings to “evaluate for the presence and/or absence of chemical impacts to building surfaces associated with historic site maintenance and storage operations.”
Machinery Moving Inc., an industrial rigging facility, set up small and large heavy machinery at off-site factories and manufacturing facilities. Operations included transportation and storage of various types of machinery until early 2018, according to Ark.
Ark reported that the soil showed chemical impacts exceeding the Indiana Department of Environmental Management Remediation Closure Guide, Residential Migration to Groundwater Screening Levels and Residential Direct Contact Screening Levels for several petroleum hydrocarbon constituents. These included benzene, ethylbenzene, 1,2,4-trimethylbenzene, 1,3,5-trimethylbenzene, xylenes, 1-methylnaphthalene, 2-methylnaphthalene and naphthalene.
Petroleum hydrocarbon substances in the form of benzene, 1-methylnaphthalene, 2-methylnaphthalene and naphthalene were found in groundwater in amounts that exceeded IDEM’s Residential Screening Levels, the report stated.
Benzene was also found exceeding IDEM Residential Vapor Exposure Screening Levels, the report stated.
The wipe samples did not reveal chemical contamination that exceeded applicable IDEM screening parameters, the company said.
Ark officials said the soil contamination was found in two soil borings, and the groundwater contamination in one soil boring in the presumed area where the company may have had the underground storage tanks, the document states.
The contractor said the contaminants were likely due to three underground fuel storage tanks that were used on the property from 1972 to 1976.
“Based on the results of this limited investigation, both soil and groundwater impacts do not appear to be widespread and appear to be limited to the area of the historic USTs, (underground storage tanks),” the report states.
“Although this area of impact is not widespread, additional investigation will be necessary to fully characterize the nature and horizontal extent” of the contamination, the report states.
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Columbus parks officials are working with the seller of the property to get the property’s title ready for the transaction, said Pam Harrell, director of business services at Columbus Parks and Recreation.
The Columbus Board of Public Works is expected to consider the property transfer during its meeting on Tuesday, Harrell said.
The closing date for the transaction will be set if the Columbus Board of Public Works approves the transfer.
The Columbus Board of Public Works will meet Tuesday at 10 a.m. in the counsel chambers at Columbus City Hall, located at 123 Washington St.
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