Communities across the Great Lakes are struggling to make use of massive properties that are too polluted to sell and too costly to clean.
Excerpt from this story from Inside Climate News:
New York, Ohio and Indiana have collectively retired 47 coal plants in the past two decades. Of these, only 11 have been successfully redeveloped—converted mostly into gas-fired power plants, but also into data centers and cryptocurrency mining operations.
And the Great Lakes region is far from an outlier. Across the United States, retired coal plants sit vacant and rusting, with little to no chance of revival. They are, in many cases, the picture of neglect: abandoned lots with murky ash ponds and dirt berms, visible to locals only through barbed wire fences. In some cases, the deserted structures have been known to catch fire or unexpectedly collapse.
Yet they also occupy some of the country’s most valuable plots of land—large, contiguous parcels abutting major waterways, often within walking distance of a population center. These qualities make them attractive locations for parks, industrial centers, or, as in the case of Nanticoke, clean energy hubs. Why, then, are they so rarely redeveloped?
The answer to that question involves shadowy companies, secret agreements, and false promises—but it begins 40 feet below the Tanners Creek ash ponds. Before any redevelopment can occur, the site must be purged of the harmful toxins such as arsenic, boron and radium that decades of burning and dumping coal allowed to leach into the soil. All told, decommissioning and remediating a retired coal plant can cost anywhere from $3.5 million to $200 million. What’s more, thanks to a 1980 federal environmental law, a botched remediation job can trigger lawsuits against the original polluter, even if they no longer own the property.
Former coal plant sites, then, are not so much attractive assets as they are a monkey on the back of power plant operators desperate to offload them.
Dave Altman is the president of Cincinnati-based environmental law firm AltmanNewman. In his five decades of litigating remediation cases, he has witnessed the creative tactics companies employ to jettison contaminated sites. Initially, he says, “the dream of any polluting company was to turn over their contaminated property as a gift to the Boy Scouts, the Girl Scouts, or a church.” That way, when the full scope of contamination was discovered, elected officials would opt to clean it up with state funds rather than sue the “mom-and-pop nonprofit” that had unwittingly agreed to assume ownership of the site. Altman says people eventually caught on to this tactic; he himself warned Xavier University against accepting an exploded chemical plant as a gift in 2000.
With few willing recipients and no desire to maintain the properties, power plant operators now pay millions to offload the sites and, in doing so, unburden themselves of the environmental liability. That has spawned what Altman calls “an entire industry for taking the liability off the books.” Around the country, companies purporting to specialize in brownfield redevelopment have sprung into existence. These companies, Altman said, sign “secret deals” with power plant operators to take over their contaminated properties and associated liabilities.
A closer look at these companies raises more questions than answers. Take the example of Tanners Creek. The property’s official owner, Tanners Creek Development LLC, was incorporated only seven months before assuming control of the site and seems to have no other assets. Altman said this structure is by design. “They set up a separate, small limited liability organization to take hundreds of millions in liability,” he said. Under this structure, the parent company can reap the profits of the land transfer while the small pockets of its subsidiary limit the amount it might have to pay out in the event of a lawsuit, effectively shielding the parent company from responsibility. As an added benefit, he said, “it makes it appear that they’re different companies to regulators who are asleep at the switch.”
Land transfers are often followed by vague statements about redevelopment. But the redevelopment companies’ economic incentives point in a different direction. “They get paid millions of dollars to do the minimum they can do to get out,” Altman said. “If you resolve your uncertainty with a phony cleanup, nobody is going to touch the property. Everybody knows it, but the utility has got it off its books.” In other words, having cashed in on the liability transfer, the new owners would prefer to perform “cosmetic cleanup” than to take on the substantial remediation costs involved in developing.
