At their May 17 meeting, Port of Tacoma commissioners unanimously approved the execution of a settlement agreement with Sound Mattress and a second with Wyeth, formerly known as Washington Steel, both the previous owners of the former Brown and Haley building known as Parcel 91, located at 1940 E. 11th St., which the Port purchased in 2006.
The settlement agreements resolve several years of disputes among the three parties related to environmental liability of the site.
Before acquisition of the property by the Port, normal due diligence was performed during which chlorinated solvents were discovered in groundwater and soil on the property.
On Thursday night, Rob Healy, environmental senior project manager at the Port of Tacoma, gave the commissioners a report on the history leading up to the settlement agreements formulated in January, describing how Sound Mattress, the owner of the property previous to the Port, entered into a Voluntary Cleanup Program with the state Department of Ecology to address the solvent issue in the soil and groundwater at the site.
“They have completed a remedial investigation,” Healy said. “They submitted a draft feasibility study, but it was deemed inadequate by Ecology and by the Port. In 2014-2015, we demoed the building and there was PCBs in the paint and soil surrounding the building. We spent an additional $2.1 million to deal with that issue.
“Following completion of the project, we submitted a claim to Sound Mattress under the purchase and sale agreement for that amount and they did not tender that to their insurance companies, so we ended up suing them,” Healy explained. “We also sued Wyeth … that’s the entity that owned the property before Sound Mattress. We went through discovery and depositions and expert witness work to try to get them to come to the table. They agreed to mediate with us in January of this year. We started formulating settlement agreements, and we’ve been working on the details of that over the last few months.”
Wyeth is a party in the lawsuit, Healy explained, because they were responsible for the PCB-contaminated building coatings, including interior and exterior paints on the walls and foundations, as well as soil and groundwater surrounding the building, and the property storm-water system. Sound Mattress is equally culpable, Healy said, because they did little to address the contamination during the time they owned the property.
A settlement agreement with Sound Mattress requires Sound Mattress to pay the Port a lump-sum amount of $3.4 million; and holds the Port responsible for undertaking all further environmental investigation, cleanup, and remedial action at the site.
A settlement agreement with Wyeth represents a partial settlement and interim cost-sharing agreement whereby Wyeth is ordered to pay the Port a lump-sum amount of $1.5 million, and the Port and Wyeth agree to partner in the further environmental investigation, cleanup, and remedial action at the site.
Also according to the terms of the settlement agreement with Wyeth, additional costs for investigation and development of a Draft Cleanup Action Plan will be paid 85 percent by Wyeth and 15 percent by the Port up to $800,000. Costs in excess of $800,000 will be 50 percent by Wyeth and 50 percent by the Port.
Litigation support costs are estimated by the Port at $1.53 million. To date, litigation support costs incurred by the Port have been $1.06 million. Port staff reports that future costs for developing a feasibility study, cleanup action plan, remedial design and remedial construction are not yet determined. According to staff, additional Commission authorization will be required to approve and enact future stages.