BY BRIAN McGILLIVARY
TRAVERSE CITY — Redevelopment funded in part by tax dollars will clean a significant chunk of pollution at an old gas station site across from West Bay.
Traverse Bay Area Credit Union wants to build its new headquarters on the corner of East Front and Hope streets. The project will remove soil contaminated by leaking underground gas and waste oil tanks, pollution discovered in 2001.
State officials agreed last year to let Blarney Castle Oil Co. leave the contamination undisturbed.
Environmental work will account for $2.3 million of the $7 million construction project and remove the source of contamination.
"We are not going to clean it all up, but we will significantly reduce it," said Eric Helzer, regional manager for AKT Peerless, the project's environmental consultant.
The Grand Traverse County Brownfield Redevelopment Authority approved the credit union's application for a $1 million loan from the Michigan Department of Environmental Quality on Wednesday. The authority also agreed to reimburse about $1.2 million the credit union will spend on building demolition, cleanup and other environmentally protective measures.
The brownfield authority would repay the state and credit union by capturing future property taxes the project generates.
Brownfield officials rejected the credit union's request to front about $22,000 to cover further environmental testing. Jean Derenzy, deputy county planner, said the authority's limited funding would better serve as an assist to additional cleanup. The project site includes an adjoining restaurant and also was used as a railroad siding with coal storage.
City zoning requires the proposed three-story building with basement to go on the corner, over the gas station's location.
The credit union will remove 9,500 tons of soil to a depth of 16 feet, plus pump and treat the groundwater for about 45 days while the foundation is installed.
"The fact it is located right over that source area, we will have to address an extensive part of that," Helzer said. "We don't always get that opportunity."
Construction won't remove all contaminated soil because some of the gasoline migrated beneath East Front Street, Derenzy said.
Blarney Castle won't pay a dime for the cleanup, despite accepting liability for the property in a 2009 consent judgement with the DEQ.
The DEQ agreed to resolve the pollution issue by leaving the property capped and putting a restrictive covenant on the property.
"The DEQ is working with Blarney Castle now on a closure," Derenzy said. "That means you've satisfied everything you need to do as long as no one ever touches it again. But the next person who buys the property for development must bring it up to standard."
The covenant also requires the credit union to make sure no storm water infiltrates into the ground and washes contamination into the groundwater. The covenant doesn't apply to the restaurant property, but Helzer said there is concern water infiltration from that property could exacerbate the contamination issue and make the credit union liable.
The credit union will put barriers under green spaces and plant rain gardens to help take up as much water as possible, Helzer said.
The project requires city zoning approval, with a public hearing before the planning commission scheduled for Feb. 4.