Commissioners debate the ethics of using grants to improve private tracts
A discussion about cleaning up possibly contaminated properties in Montezuma County has prompted concern among the county commissioners over any use of grant funds to benefit private landowners. At a meeting March 18, Commissioner Keenan Ertel raised strong objections to using taxpayer dollars on blighted properties.
“Spending money on a derelict piece of property and a derelict owner and getting his property fixed up so he can sell it and make money off it. . . I think there’s a fundamental wrong and a fundamental break in what’s right,” Ertel said.
At a later meeting, the board did decide to approach the owners of two such tracts about a clean-up, according to County Administrator Ashton Harrison, but the fate of some other properties remains uncertain.
Ertel’s comment came during a discussion with Mark Walker, project director with the Colorado Brownfields Foundation. The non-profit foundation helps municipalities and local governments that want to clean up sites that may be contaminated, such as old junk yards, dry-cleaning businesses and gas stations. It does not actually clean up the sites, but provides technical support in assessing the degree of contamination and then in helping the entities find funds to pay for the clean-up.
Earlier this year, the county planning commission prioritized six sites as having a high priority for clean-up because they are on the gateways to municipalities.
Two of them are the former M&M Truck Stop and restaurant complex at Highway 491 and County Road G south of Cortez; and the former Wild Wild Rest convenience store and Sinclair gas station on Highway 160 between Mancos and Cortez.
• The former Novotny junkyard on Highway 491 north of Cortez;
• The Mesa Oasis RV Campground on Highway 491 south of Cortez;
• The old dump for the town of Dolores on Highway 184;
• A drilling-equipment yard on Highway 491 just north of Cortez.
On March 18, Planning Director Susan Carver was seeking permission from the commissioners to approach the landowners to see if they are interested in help getting their tracts improved. The effort would be voluntary; the county is not trying to force the owners to take action.
Funding to clean up “brownfields” comes largely from the U.S. Environmental Protection Agency, which began a program in 1995 that provides grants for such projects. The 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.”
Walker, who has visited with the commissioners several times, said some of the six properties prioritized by the planning commission may not be contaminated but are perceived as being so, making them difficult to sell. “The perception about these sites has prevented them from being redeveloped,” he said.
“The purpose of brownfield [assistance] is for the community to say, ‘This is a priority site. We believe it’s worthy of assistance.’ You attempt to level the playing field, either remove those perceptions by finding out there’s no contamination or you quantify what the clean-up is to be so the buyer knows the cost of the clean-up.”
In the case of the M&M and the Sinclair, Walker said, it is known that old gas storage tanks have leaked underground; however, there may be a misperception that the contamination is more widespread than it is. He said he had talked to a woman at a local bank who told him, “We don’t lend down there any more[the M&M area] because everybody knows the contamination goes all over.”
“It’s not true,” Walker said, “but as a bank they don’t want to take the risk.” The Brownfields Foundation can help owners get technical assistance from the state or EPA in the form of a two-phase assessment of a potentially blighted property.
The first phase ascertains if the property is contaminated; the second phase determines the extent and estimates the cost of clean-up.
Walker said an example of how the program might work is the Novotny junkyard.
“It was 60 acres of dead cars at one time,” he said. “It could be a relatively easy cleanup if they never crushed cars out there, but who’s going to risk the $30,000 to $50,000 for an assessment to find out?” He said the ground could contain lead from batteries, chrome, gasoline, or oil, but if cars were crushed, that location could contain antifreeze, hydraulic fluids, and more.
As another example, he said, the Mesa Oasis Campground is covered in graffiti and “looks awful,” but a Phase I assessment might clear up the perception that it’s contaminated from an inadequate septic system.
But Ertel raised the question of whether it was right to spend taxpayer money to help a landowner who might then realize a profit from selling the property.
In the case of the M&M, he said, “Let’s say it’s $600,000 to clean it up, and the property owner has gotten $450,000 in grant monies from somebody to do that. Then the Hilton Hotel pays him $1.3 million for that property. Is he not responsible to refund that grant money?”
Walker said old gas stations are different from the other cases because they have paid into an insurance fund, the Petroleum Storage Tank Fund, and can access that fund to recoup the costs of a clean-up.
However, if time goes by and the property owner doesn’t remediate the property, he or she is penalized by losing access to some of the funds.
Ertel said he would like to see gateway areas improved, but only if the property owner would not realize a net gain from the use of grant monies.
“It’s 100 percent benefit to the community, but I cannot tolerate irresponsible landowners that have let 25 percent of their insurance erode away and now John Q. Public has to come in and clean it up,” Ertel said.
Commission Chair Steve Chappell agreed. “No, I don’t think taxpayers should pay for issues the owners created,” he said. Commissioner Larry Don Suckla was absent that day.
Walker said in some cases, property owners may not have the money to do an assessment, especially if they fear learning that an expensive clean-up might be required. In other cases, projects may be hampered by ongoing litigation.
“There’s no question in my mind those sites need to be dealt with. Everyone knows they’re eyesores,” Ertel said. “I just want the property owner to be fully involved… If he’s going to make a buck off of it I’d like to have some way to not let him come out of there with a pretty little net gain.”
Walker said, “If there’s a Phase 1 and 2 done at $60,000 expense and you find out you have a $250,000 cleanup, a smart buyer will knock down the price $250,000. Are you comfortable with that scenario?”
Ertel said no, because the owner would still have received a $60,000 grant he did not have to pay back.
“The potential buyer won’t risk that $60,000 to find out he might have a milliondollar cleanup,” Walker said.
The commissioners asked whether the owner could be required to repay the costs of the initial assessment, but Walker said the grants are from a non-revolving fund and are designed to be “disappearing.”
“The county will benefit from the redevelopment,” he said.
But Ertel said that was not his primary concern. He and Chappell mentioned the federal bank bailout in 2008 and 2009 and the problem of the burgeoning federal debt.
Ertel said he would be much more comfortable if the county were able to get title to the blighted properties; then it could utilize the grant funds and return them to its own coffers when a property was sold.
“That’s fairly aggressive on the part of the county,” Walker said, adding that most counties don’t want the title to a contaminated site “because they’re afraid of walking into a godawful mess.”
Cortez resident Bud Garner objected from the audience. “Where does it stop? Under what conditions can a county own land?” he asked.
“Once you start down this slope the grease just gets thicker,” Garner said. “When do we quit using government to bail out business in the private sector?”
“There is another wrinkle,” Chappell said. “A lot of people would like to see the economy improve and things be cleaned up. When things fail, it’s a blight on the whole community. That’s just another perspective – I’m not saying I agree.”
Chappell mentioned the past clean-up of old uranium mines with radioactive material.
“The danger of those uranium tailings is largely overblown,” Garner said. “Yeah, they do pose a risk to some people.” But paying for those clean-ups was acceptable because the mines were operated under contract with the Defense Department, he said. “The county government did not contaminate the M&M.”
Harrison later told the Free Press that the commissioners had decided to allow Carver to approach the current owners and/or potential buyers of the M&M and the Wild Wild Rest about a clean-up because the source of the monies would be the Petroleum Storage Tank fund rather than taxpayer- funded grants.
Walker told the Free Press it would benefit the community to have eyesore sites redeveloped, and grant monies not used here will be spent somewhere else.
“I think there’s a solid majority out there that would like to see these sites addressed and they have not made that representation to the commissioners,” he said. “It’s time to hear from those who are in favor.”