Before March, it had been a few years since Point Ruston made a payment toward millions owed to the U.S. Environmental Protection Agency.
Rather than pay the agency to oversee its complex and sprawling 97-acre urban village on a polluted Superfund site, Point Ruston instead preferred to accrue interest, according to a letter from Point Ruston’s legal affairs manager, Loren Cohen, to the agency in 2010.
The federal interest rate governed the development’s earlier payments. That rate plummeted to nearly zero in 2009 and has remained there ever since.
A new contract, called a consent decree, outlines when Point Ruston must pay the EPA $4.4 million, which includes accrued interest and charges dating back to 2009.
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The decree, inked last month, pegs interest at 5 percent per year and mandates that Point Ruston repay what it owes by 2018. The company made a $750,000 payment toward its bill in March.
“There is nothing illegal about what they did,” said EPA Superfund project manager Kevin Rochlin. “This time around we wanted to make sure we have the past costs paid.”
Point Ruston is built atop some of the most polluted land in the country. For 76 years the American Smelting and Refining Co. smokestack dominated the skyline near Point Defiance. During that time it emitted plumes containing arsenic and lead, which has settled into the soil of area homes and parks.
But the biggest source of concern for the EPA is the land itself. Rather than haul off thousands of tons of dirt, EPA officials preferred capping it with a layers of impermeable liner, gravel, clay and dirt. In some cases the agency allows building foundations and roads to serve as a cap.
As construction continues at the more than $1.2 billion development, CH2M Hill employees working on behalf of the EPA are onsite to ensure the contractors build the cap in a way that will keep contamination in place. It’s those oversight costs that Point Ruston in the past did not pay when billed.
Cohen said his development could not borrow money for less: “You would be making money with anything less than 3 percent. It’s economics.”
The new agreement also says Point Ruston must complete the cap by 2020.
Coehn said he believes Point Ruston will be able to construct the cap by then — and possibly sooner.
Given demand for apartments and condominiums at the site, which has sweeping views of the Olympic Mountains, Puget Sound and Mount Rainier, Cohen said: “We can’t build them fast enough.”
The development straddles the Tacoma-Ruston city line. Last year, the developers and the small city of Ruston tussled for months over building permits, which at times have led to construction delays. The new contract with the EPA says developers can seek relief from construction deadlines if permits are delayed.
Part of the acrimony between the town of Ruston and Point Ruston arose when the developers built a foundation without a permit from the town. Developers claimed the federal consent decree allowed them to build the cap without permits, because the parking garage’s foundation is part of the cap.
The new agreement with the EPA sought to untangle the complicated web of the original agreement with Asarco and subsequent amendments into one 78-page document, Rochlin said.
“It’s an amazing piece of property,” Rochlin said. “There aren’t 60 acres of (undeveloped) waterfront property anywhere in the area. To them it was a challenge and a way to hopefully make money.”