He wants to remediate site to save cost, but city hires private firm
OCEAN CITY – In spite of a plea from the owner of the Palmer Center – juxtaposed with a threat by his legal counsel of litigation and added expense – Ocean City Council went ahead with a resolution dealing with the cleanup of a property the city took by eminent domain.
The dispute apparently arises from the cost and scope of the cleanup, which Palmer Center wants to do on its own for a lower cost but the city believes will not be adequate.
At Thursday night’s council meeting, members went into an unplanned executive session after city solicitor Dorothy McCrosson told them about a late query that afternoon from attorney Albert Telsey representing the Palmer Center, part of properties the city acquired through eminent domain north of the Ocean City Community Center at 1735 Haven Ave.
The city took possession early in 2021 of the Palmer Center property and the Klause property that used to be home to Ocean City Chevrolet. The city paid $5.6 million for the Palmer Center lot, which is on 16th Street next to Emil Palmer Park, a large fenced-in playing field that takes up the block between Haven and Simpson avenues.
A court is still determining whether the price the city paid for the lots is fair and there is $1.5 million in escrow to be put toward environmental cleanup, a cost that would come out of the purchase price.
The cleanup and related cost is what apparently prompted Telsey to contact council asking that it pull Resolution No. 30 from the consent agenda and table it.
The executive session took place out of public view at the start of the meeting. Afterward, during public comment, both the attorney and John Flood, a former city councilman who is managing partner of the Palmer Center, asked members of council to delay the resolution. (They were commenting via Zoom, not in person.)
The resolution, later approved in the consent agenda, is for a $40,215 contract with GEI Consultants, Inc. to do pre-remediation sampling at the Palmer Center site.
Information included with the council packet said GEI anticipates cleanup of the piece of land at between $900,000 and $1.5 million. The cleanup involves excavation and removal of soil contaminated by chlorinated volatile organic compound source material to 12 feet below the ground surface and more.
The contract approved Thursday is for only the sampling.
Flood attorney threatens multiple lawsuits
Telsey is a partner at Meyner and Landis LLP in Newark who advertises himself with a focus on “all aspects of environmental compliance, counseling and litigation” including with condemnation and cleanup of contaminated sites.
He told council members if they approved the contract, they would be opening the city up to four potential lawsuits. He said the property owner (Flood) has his checkbook opened and is ready and able to do the cleanup at the site, but the city is denying him the opportunity.
“This is going to lead to a lot of litigation when it should lead simply to a meeting of stakeholders” to discuss access to the parcel and the remediation plan Palmer Center wants to pursue, Telsey said.
By approving the contract to have GEI do the work – some of which the Palmer Center has already done to determine the contamination – is a mistake that will lead to potentially four lawsuits, Telsey asserted.
One lawsuit is to get access to the site. He said the court denied them access to the site, but Judge Julio Mendez is reviewing their motion to reconsider. Even if the judge doesn’t agree, Palmer Center is going to take its case to the Appellate Division.
“That’s a lot of money for the city to be paying in legal costs, but that is only the first lawsuit,” Telsey said.
A second potential lawsuit is whether the city is allowed to spend money cleaning up the site when the owner is willing and able to pay for it himself.
A third lawsuit would come from not allowing him to do his legal obligation to cleanup the site, which puts his license in jeopardy, Telsey said.
And the fourth potential lawsuit stems from the city potentially spending more than necessary on the cleanup and not being guaranteed the court will make the Palmer Center pay the entire amount out of the escrowed $1.5 million.
“Even if you bond $1.5 million to pay for a cleanup we say can be done for much much less,” Telsey said, there is no guarantee the city is entitled to recovered, dollar for dollar, the entire cost of the cleanup from the escrowed amount.
He claimed much of the contamination of the site was done before it was owned by Palmer Center and the city may be paying more than necessary. “This cost recovery action is not a slam dunk,” he said.
He asked the council to p-put the brakes on the resolution.
Flood then weighed in.
“I’m asking you to consider tabling resolution 30 until you have time to understand everything involved with it,” he said, adding “a decision two or four weeks from now won’t change the outcome.” However, he said, approving the contract that night “could lead to other things happening down the road.”
Flood said his company is “ready, willing and able to do the cleanup.” He said they already did more than 30 soil samples and water samples. “Everything that GEI says it will do we’ve done. We’ve shared that information with them. They used that to generate what they feel it will take to clean it up,” Flood said.
He added the only thing stopping Palmer Center from doing the work is an access agreement they’ve been trying to get since last year. “If we had that, it would be done, it would be cleaned up.” Flood said he was asking city council or some members of council “to take a leadership role” and find common ground to get the site cleaned up.
City expert asserts Palmer Center cleanup plan insufficient
Although the issue was discussed in the closed executive session, no one on council or in the administration commented on the GEI contract in question during the open meeting before it was approved along with a slew of other resolutions in the single-vote consent agenda.
However, city public information officer Doug Bergen forwarded a copy of part of the city’s civil action against Palmer Center regarding the cleanup that was before Judge Mendez.
Bergen also pointed directly to the section that addressed the Palmer Center plan’s inadequacies.
The document, dated Nov. 23, 2021, was the certification of licensed site remediation professional Kathleen F. Stetser opposing Palmer Center’s request for access to the site to do the cleanup.
“We conclude that there is no reasonable likelihood Palmer Center, LLC can achieve an unrestricted RAO (Response Action Outcome) in the timeframes they proposed by the methods they propose for the costs estimated in their budget,” she wrote.
She said the plan to remove 225 tons of soil from the site is “inadequate” to achieve unrestricted use of the site and that GEI estimates nearly 4,000 tons be excavated or treated to address contamination.
In addition, Stetser wrote the use of “enhanced fluid recovery” in the plan to treat contaminated groundwater also is inadequate.
She said in her professional opinion the scope of work by Palmer Center “will not be sufficient for the remediation of the properties consistent with the highest and best use of residential development and without the need for long-term engineering or institutional controls. It is also my professional opinion that the estimated remediation costs are not fully supported by Palmer Center, LLC and the total cost estimate of $903,000 is not enough to fund the complete scope of remedial work.”
– By DAVID NAHAN, Sentinel staff