Godsey: Hidden pollution kills riverfront plan

City knew of problems, but significance downplayed

jgaines@macon.comDecember 14, 2013 


Macon Mayor Robert Reichert swings a ceremonial sledge hammer against the former Central Services building on Riverside Drive prior to an excavator tearing down the building on Thursday, June 20, 2013

JASON VORHEES — jvorhees@macon.com Buy Photo

CORRECTION: A map that formerly accompanied this story gave an incorrect impression of the extent of soil contamination on and near the site of a proposed Riverside Drive development. The identified soil contamination does not extend to the northeastern bank of the Ocmulgee River. According to Kevin Chambers, a spokesman for the Georgia Environmental Protection Division, it does not reach as far as the low-water bank of the river.

A multimillion-dollar residential and commercial development planned for Riverside Drive in downtown Macon is dead, poisoned by contaminated soil, said its primary promoter, Kirby Godsey.

According to legal documents, the city knew years ago of state restrictions that barred residential use of the 10-acre site and was obligated to inform any potential developers. The 2005 agreement involving the city and two utilities, as well as a 2009 consent order from the Georgia Environmental Protection Division, bear the signature of Mayor Robert Reichert.

“I am formally terminating my option on this property, because we discovered in October that this land was listed with EPD as a toxic waste site and could not be used for residential purposes,” said Godsey, former president and current chancellor of Mercer University and now the principal figure in Renaissance on the River LLC, which organized to build the proposed development.

Reichert said Friday he was dismayed to learn of Godsey’s decision.

“Last I heard was that he was willing to listen and get the (environmental) testing done,” Reichert said. “That’s news to me that he is going to drop the option.”

The mayor maintains that the site should still be viable with “minor remediation” and rearranging the planned buildings.

“I don’t mean to correct Dr. Godsey, but I think he is mistaken in some of his understanding,” Reichert said. “Yes, there is some contamination on the property. Yes, there are restrictions on the use of some portions of the property. That’s a matter of public record.”

The August 2011 real estate option agreement between Renaissance and the Macon-Bibb County Urban Development Authority, which held the land, notes that there may be “petroleum-based environmental contamination” that may require cleanup on a small part of the site, but it says that’s the only known environmental problem. The agreement was attached to a resolution that passed Macon City Council.

Godsey said his group’s plans always included covering that oil contamination with a parking deck, but then he discovered the problem is much wider. A map prepared for Godsey’s group by local surveyors shows contamination on about 60 percent of the site, leaving only fragments that could be developed without restrictions.

Historic pollution

Three parcels of property, covering nearly 7 acres of the proposed development site, were once the location of an Atlanta Gas Light/Georgia Power plant that turned coal into gas for heat and light, said David Reuland, unit coordinator in the state’s Environmental Protection Division’s response and remediation program.

That left the ground contaminated with lead and coal or oil residue, he said.

“It was delisted from the hazardous site inventory a couple of years back,” Reuland said. “Without further controls or cleanup, it would be limited to nonresidential (use).”

But the plant didn’t operate there very long. Compared to coal-gasification plants in many other cities across the country, which can take tens of millions of dollars to clean up, this one was small, Reuland said. Then about 40 feet of fill dirt was dumped on the low-lying original site, so it would take a lot of work to dig out the contaminants, he said.

In June 2005, the city signed an agreement with Georgia Power and Atlanta Gas Light that the city wouldn’t “place, permit or approve” any residential use of the land.

If any part is used for a residential purpose, the city would have to pay $500,000, with half each going to Georgia Power and half to Atlanta Gas Light; and the city would then be responsible for 30 percent of any remediation cost on the plot at 801 Riverside Drive, which was then the city’s Central Services headquarters, according to that agreement. The two companies would split the rest of the cost but wouldn’t be responsible for any cleanup at the former Macon Transit Authority site at 815 Riverside Drive.

The deal was signed by then-Mayor C. Jack Ellis; by executive assistant to the mayor Sam Henderson, who was then acting city clerk; and by the city’s hired attorney, Robert Reichert.

Then in 2009 the city signed a consent order from the state EPD. It requires the city to include a copy of a corrective-action plan with any document offering the land for sale, and to notify the EPD -- particularly if any change in land use involves residential use. It further requires notice in any deed or related document that the land needs environmental remediation. Reichert, by then the mayor of Macon, signed the consent order.

But Godsey said he didn’t learn of the larger problem until his project manager was discussing underground utilities and someone made offhand mention of the property restrictions.

“At the time we discovered this, the project was on track, on the timetable that was spelled out,” Godsey said. “We had developers who were prepared to enter letters of either interest or intent.”

Reichert said there was no effort to conceal the use restrictions.

“In fact, everybody -- I thought -- understood that it just is going to take putting the parking deck on top of certain areas of the property,” he said. “We think that the site is still a viable site. It just is going to take some work and some reorientation of buildings.”

But Godsey said the contamination is wide enough that it rules out many of the buildings he had planned -- and for which the basic layout has been known for two years -- without major environmental work.

Pointing fingers

Reichert said he recalls that it was ultimately Godsey’s responsibility to research the land’s suitability, not the city’s to give notice.

“My recollection is that the option provided for certain periods of time for them to do due diligence on environmental and title and this, that and the other,” Reichert said.

The purchase option agreement says Renaissance had 180 days from the late-2012 handover of the last parcel on the site to study environmental issues and allowed uses, among other things. It says the Urban Development Authority would assist by providing copies of all related documents Renaissance “may reasonably request.”

During that time, if Renaissance found anything that made the project infeasible, it could terminate the option “and neither party will have any further rights, remedies or obligations hereunder.” The city is not mentioned.

Alex Morrison, executive director of the Urban Development Authority, said the localized oil contamination mentioned in the purchase option agreement was well known. But it was only a couple of months ago that he learned the scope of the problem himself, he said.

Macon City Councilman Rick Hutto said contamination on the site came up nearly a decade ago when there was talk of renting it to the state Department of Corrections. When Godsey’s project was first discussed, Hutto himself brought it back up, he said.

Hutto, chairman of the council’s Public Properties Committee, recalled asking, “Are we to believe that has all gone away?”

“And the city attorney’s office and the mayor’s office just looked at us and said, ‘Oh yes, it’s not an issue anymore.’”

Some environmental problems, at least, were widely acknowledged, but Hutto said it was a surprise to be told by Reichert that it wasn’t a problem for development.

“He certainly was very well aware of it,” Hutto said.

Godsey said that he, personally, and a few partners have already spent hundreds of thousands of dollars on planning and promoting the development, only to find belatedly that it’s not viable as planned.

“If the property ever becomes developable, we’ll be happy to talk with the Urban Development Authority about an option,” he said.

Pricey plans

The Renaissance plan, now dubbed The River Park Macon project, was to include more than 200 condominiums or apartments, a boutique hotel with room for retail, and 240,000 square feet of medical and other office space. That would be spread through six buildings plus two parking decks in a basic layout that has been known for more than two years. The phased project would have broken ground in 2014 and be finished by the end of 2016.

The latest description projected that the finished development would have “a potential fair market value in excess of $90 million.”

The Peyton Anderson Foundation put in about $1 million to buy land, while Macon and Bibb County provided the rest, turning it all over to the Urban Development Authority. The plan was to sell the land, appraised in 2008 at $2.3 million, to Godsey’s group for $1.16 million.

Estimated development costs ran around $49 million, with $8.3 million more in infrastructure. In December 2010 the city approved a tax allocation district, or TAD, for the site, with revenue from it backing development bonds. In addition to clearing the site, the city bought and renovated the warehouse at 1000 Seventh St. as a new home for Central Services at a cost of about $1 million.

A resolution before the Macon City Council on Dec. 17 would have the city accept ownership of 801 and 815 Riverside Drive back from the development authority. Those parcels, the former locations of Central Services and of the Transit Authority, were turned over to the development authority with a clause requiring the hand-back if construction hadn’t yet started, even though Godsey’s purchase option for the land wouldn’t have run out for another six months at least.

The reversion of those two parcels to the city isn’t connected to the environmental issue, Morrison said.

Unknown possibilities

The state environmental restrictions, however, aren’t set in stone, Reuland said.

Given the relatively low level of contamination on the site, it should be possible to change the existing determination of the site, he said, adding that he’d be “excited” to help.

“There are ways to revisit those contamination issues in a way that would be easily dealt with,” Reuland said. “It’s certainly doable. It’s just a matter of engineering and going through the regulatory process.”

The question is how much it would cost.

“We did have a meeting with the mayor and his staff, and his attorneys and a team of consultants he brought together for EPD,” Godsey said. “They discussed remediation possibilities, but the mayor made clear that any remediation done for this project would need to be funded from TAD resources.

“We asked a direct question of the city’s outside counsel: ‘What would it cost to remediate this entire site?’ And his answer was ‘$26 million.’”

That’s correct, Reichert confirmed -- if every bit of contaminated soil was “dug up and hauled off.”

“But that’s not necessary,” he said.

The cost of a more limited cleanup isn’t known, Reichert said, but he’s willing to have that prospect studied. He wants to talk to Godsey about it further.

“I regret any misunderstanding. I think that the site is viable,” Reichert said. “I think the mere fact that the Environmental Protection Division has said that it’s OK to use it, but for nonresidential purposes, would indicate to most people that it’s not that serious, that it’s still usable for commercial, retail, everything like that.”

Morrison said he didn’t know what could be done with the land, which is still in the development authority’s hands, but his agency will work with the city on that.

“We’re all in this together,” Morrison said.

To contact writer Jim Gaines, call 744-4489.

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