New developer emerges for Superior Plating site

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February 28, 2014 // UPDATED 2:56 pm - March 5, 2014
By: Ben Johnson
Former Superior Plating site at 1st & University avenues.
Ben Johnson
New pollution discovered at site ramps up cleanup costs

A large amount of industrial waste recently discovered underneath the floor at the Superior Plating site has nearly doubled the estimated pollution cleanup cost, threatening a potential sale to a new developer.

First and University Investors bought the 5-acre site at 315 1st Ave. NE in 2012 after Superior Plating went bankrupt, and has been paying for the ongoing pollution cleanup. Rich Kauffman, president of Midwest Construction for DLC Residential, told neighbors at a Feb. 27 Nicollet Island-East Bank Neighborhood Association (NIEBNA) meeting that DLC Residential has signed a letter of intent to purchase and develop the property into 400–600 rental apartments. He also said DLC was open to including ground-floor retail in the project at the neighborhood’s request.

DLC is a Florida-based developer that primarily builds big market-rate or luxury apartment towers. It’s beginning a big push into the Twin Cities apartment rental market and recently had its first Minnesota project, a 184-unit property in St. Louis Park’s West End area, approved by the city.

DLC’s purchase of the Superior Plating site is contingent on complete pollution cleanup. Eric Anderson, a representative from First and University, said that additional funding from a combination of state, county and Met Council pollution remediation grants will be required in order to finish site cleanup. Cleanup costs were originally estimated to be between $3 million and $3.5 million, but now that has risen to more than $6 million after the space underneath Superior Plating’s wooden floor was found to be crammed full of industrial waste — old twisted piping, metal tanks, and contaminated dirt, brick and other debris.

“As workers got into the building and interior cleanup they discovered a subfloor with at least 50 to 60 years of debris. The previous owners had basically been filling these huge underground trenches with garbage,” said Eric Galatz, a lawyer for First and University.

Kevin Carroll handles pollution remediation grant applications for the city of Minneapolis. Grant applications have to receive city approval as part of the application process.

Carroll said Minneapolis has been very successful in obtaining these grants, securing more than $8 million for cleanup during the last three years.

“Our success, in large part, is due to the fact that we focus on sites that have projects that are very close to being ready for development,” he said.

This is where it seems the Superior Plating site has been put in an untenable position: First and University can’t sell the site to DLC until it is completely cleaned up, but getting the money it says it needs to finish cleanup is contingent on DLC (or another developer) spending tens or even hundreds of thousands of dollars on project design, engineering and community engagement to show that it is serious about developing the site.

“We’re right on the edge of what we can afford to do here,” said Galatz, who noted First and University was denied cleanup grants last year. “It’s a chicken-or-the-egg scenario, and I don’t think DLC or any other developer is going to move forward with a substantial plan without knowing the site can be fully remediated.”

The roof caved in during a violent storm last June at Superior Plating

A portion of Superior Plating's roof collapsed during a strong storm last June -- photo by Ben Johnson

Inside Superior Plating

On a frigid day in late February neighborhood residents were invited to tour Superior Plating to see how the cleanup is going and where problems were occurring.

“This site is full of mysteries,” said Steven Voss, who led the tour as a project manager for Conestoga Rovers & Associates, which has served as a consultant on the cleanup effort. “In terms of intricacy and difficulty this has been one of the more challenging projects I’ve ever seen. Every day there’s a new surprise.”

Most of Superior Plating’s old wooden floor has been ripped up during the last two months, revealing a vexing variety of industrial garbage packed into the four-foot space between the raised floor and its concrete base below.

A large tank recently uncovered underneath the floor at Superior PlatingWith his flashlight Voss pointed out the latest surprise, an 8-foot long tank uncovered that morning.

“We’re hoping that’s just an empty pressure tank, but we won’t know for sure until we get it completely excavated,” he said.

Later Voss led the group past graffiti-plastered walls and long piles of splintered wooden planks and twisted scrap metal into a room where the roof collapsed during intense storms last June. The rest of the roof and walls of the building will come down as soon as the site is cleared of all hazardous materials, which is scheduled to happen sometime in mid-March — barring any more major surprises.

After demolition contractors plan to excavate the soil beneath the building down to the bedrock, treat it with a neutralizing chemical powder and ship it to an industrial landfill. The plan is to excavate, treat and ship in small batches to avoid contaminated soil being exposed to the air for more than a few hours.

On a positive note, Voss said he has not found any Trichloroethylene (TCE) vapors after drilling about 30 holes throughout the property.

“That’s not to say there isn’t any, but at this point we’re just not finding it,” he said.

The site could be cleaned up by summer if the remediation effort remains fully funded.

Neighbors raise skepticism

First and University’s request for neighborhood support of its application for grant money met some resistance at the February NIEBNA meeting.

“First you said the cleanup cost was $3 million, now it’s over $6 million, who’s to say you won’t come back in a few months and say it’s $8 million now?” asked Victor Grambsch, president of NIEBNA. “And I’ve become very skeptical of the threatening comments I hear over going to bankruptcy if they don’t get these funds.”

Minnesota Pollution Control Agency (MPCA) hydrogeologist Candace Sykora has worked extensively at the Superior Plating site. She said she is not concerned about First and University declaring bankruptcy because the investment group signed an agreement when they purchased the land that prevents them “from just walking away from the site.” If bankruptcy were declared, the MPCA would take over the site and stabilize it with funds taken from First and University while waiting for a new buyer to emerge.

When Anderson, the representative from First and University, was directly asked what happens if his grant application is denied he said: “I can’t tell you the answer. I honestly don’t know. That’s the issue.”

Some residents also expressed a preference of condos over rental apartments. Ryan Cos. had a plan to build 600 condos at the site in 2006, but abandoned those plans a year later when the condo market tanked.

After much debate NIEBNA elected to stay neutral on First and University’s grant request. The neighborhood group passed a resolution several days after the initial Feb. 27 meeting that read: “The Board does not object to First and University's application to the City for...pollution remediation grants.”

 Ben Johnson // 612-436-5088 // bjohnson@mnpubs.com // @johnsonbend