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Digging in the Dirt

Toxic surprises found at city project sites routinely take public to the cleaners

By Will Harper

WHEN THE AGENCY bought the land between Third, Fourth, San Antonio and San Fernando streets 27 years ago, officials had no idea what they were getting into. But this dated example isn't the only instance where the agency or the city unknowingly bought contaminated land that taxpayers later have had to pay hundreds of thousands of dollars to clean it up.

Three years ago, the city paid landowner Jim Fox, a regular political contributor, $4.25 million for a chunk of downtown property without testing for contaminants. Soon after crews broke ground to build the so-called Century Center parking lot, they found toxics underneath carrying an estimated $500,000 cleanup price tag.

For the recently renegotiated deal to build the Market Gateway housing project, located on the northwest corner of South Market Street and Pierce Avenue, the agency could pay as much as $1.2 million for toxic remediation. If environmental consultants determine early on that cleanup costs will go above $1.2 million, the agency can cancel the deal with developer David Neale. Even so, the agency will still be stuck with the land, which taxpayers bought for a reported $3 million in the late '80s.

Fixing up properties no one else will touch is the cornerstone of all redevelopment. However, a San Jose businessman familiar with the agency's dealings (who declined to be named in this story) says that at some point policymakers need to be more selective, more careful about the land they buy with public dollars.

The agency--working with the city--took such precautions when buying toxic land to build the Arena, negotiating down purchase prices with owners of contaminated properties. In one reported case, the agency's offer to pay $566,400 for a gas station got reduced to $1,000 after factoring in cleanup costs.

Nevertheless, former Councilwoman Lu Ryden says local government doesn't have a good track record for checking out property carefully before making offers, and taxpayers end up footing the bill for hasty decisions.

"You have to use common sense," says Ryden, who served on the council during the 1980s redevelopment boom. "You can't just say you want things redeveloped no matter what the cost. When [a piece of property] doesn't move, there has to be a reason."

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From the June 12-18, 1997 issue of Metro.

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