Saturday, July 16, 2005

Resort Property with A View of The Toxic Waste

From 1990 to 1995 I lived in Petoskey, Michigan and sold high-end windows and doors to rich people who built summer homes and retreats along the beautiful shores of Lake Michigan and Little Traverse Bay. One of the biggest prospects we had was selling to a brand new development called Bay Harbor that was going to be the biggest and best new development since Hilton Head, and they were going to do it by reclaiming a devastated piece of property on the edge of town that had been a decrepit old cement plant. Developer David Johnson, who had put the package together and schmoozed the hell out of everyone from the state level down to the local Indian tribes, promised that everyone would benefit: the town would get a huge boost in tax revenue, the rich would get a new place to show off their riches, and the unsightly and dangerous cement plant would get cleaned up. The whole deal was put together very quickly. The land was bought, the permits were issued, and the ribbon-cutting on July 14, 1994 was overseen by John Engler, the governor of the state, six months after the idea was proposed. The first houses were going up within three months, and I sold a number of window packages to homeowners and the property management company. I remember thinking at the time — all the while happy to have the chance to sell my windows and doors to these rich folk — that it sure came together fast and that perhaps they might have overlooked something or someone did an environmental check a little too quickly. You don’t throw together a billion-dollar resort development on top of an old industrial site without some clean-up. I even told the guy I worked with, “Someone’s either going to get very rich, or someone’s going to end up in jail.” According to this story in the Detroit Free Press, it looks like neither. But a lot of people may get very sick.

Just 12 years ago, this playground for the ultra-rich was littered with rusting machinery strewn across hundreds of acres of bleached-white wasteland dotted by defunct cement plant buildings and limestone quarries.

That was before a developer’s grit and vision led to a fairy-tale transformation.

Yachts from international ports now glide across the pastel of Little Traverse Bay, easing past $5-million waterfront mansions. Big shooters now fly in, play 27 holes on nationally acclaimed golf courses, then zip home on Lear jets. And children now learn to ride at summer pony camp while their parents attend calf-roping clinics.

The makeover of the moonscape into a resort the Wall Street Journal called a “magnet for the world’s magnates” was stunning.

But incomplete.

Now the ugly past has bubbled back up with a vengeance and government workers in white protective suits are drawing water samples along about five miles of shoreline, including in front of a dozen multimillion-dollar mansions.

Liquid with an alkalinity stronger than bleach and chock full of poisons was discovered last year leaching into Little Traverse Bay from piles of the waste ash on which the development was built. It was a problem developers thought they had solved with a system to collect the wastes, but the system broke, and now federal regulators are saying it was inadequate from the start.

This summer, homeowners can’t let their grandchildren touch the water and a popular public park has closed.

Property values along the affected waterfront have tanked.

“Even if they cleaned it all up tomorrow we’d still have the stigma,” said Myron Patten, a retired radio station owner whose home fronts the bay.

Last summer, his nine grandchildren frolicked in the rocky shallows on inner tubes. “They were in the water every day,” recalled Patten’s wife, Gerry Patten.

Now, a chain-link fence stretches across their 600 feet of lakefront bearing warning signs, while environmental cleanup crews run noisy machinery.

“We’d like to sell now,” said Myron Patten, who spends summers along a stretch where lakefront homes were valued between $2 million and $5 million before the problem surfaced. “But at this point,” he said last week, “it has no resale value at all. It’s been a lot of grief.”


PH levels as high as 13.5 were recorded in water puddled on private beaches — almost as caustic as liquid drain cleaner, and well above levels that can irreversibly damage skin, according to the Michigan Department of Community Health.

Stretches of some beaches appear devoid of vegetation and insects, likely a result of the seepage. And water tests up to 90 feet offshore show high alkalinity, according to Michigan Department of Environmental Quality documents.

One of the big selling points — and one reason Mr. Johnson was able to get Bay Harbor up and running so quickly — was that he promised his company would handle all the environmental issues and prove that corporate America didn’t need precious tax dollars spent on oversight by government bureaucracies like the EPA and the Michigan Department of Environmental Quality. Well, guess who’s going to do the clean-up.

CMS Energy and the EPA are negotiating immediate steps to corral the toxic runoff, and a long-term plan will be overseen by the DEQ. In the interim, dangerous areas have been fenced off and posted with warning signs, and contractors are siphoning toxic puddles from the shoreline. The existing collection system is back in operation, and a more extensive system is in the works.

CMS has set aside $45 million for a cleanup, but no one knows whether that will be enough.

“We want to work quickly and efficiently and with minimum disruptions,” said CMS spokesman Tim Petrosky.

Meanwhile, Johnson said Bay Harbor hasn’t stopped its aggressive marketing and promotional efforts.

Well, it’s nice to see that a little toxic boo-boo isn’t going to get in the way of the leisure class.