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Elkhorn wants to condemn site; bank says it’s not contaminated

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Darryl Enriquez
August 13, 2011
— An affiliate company of Walworth State Bank is asking a Walworth County judge to stop the city of Elkhorn from condemning its property, a former industrial site at 201 Centralia St.

The city wants the property for a new department of public works location. The city and the state Department of Natural Resources claim the property first must be cleaned of pollutants.


A municipal well is within 40 feet of the property, but there are no indications that those pollutants are in the city’s water supply.


Walworth County Judge David Reddy will consider the request for an injunction to halt condemnation at a hearing Wednesday, Aug. 24.


“It’s a lawsuit that’s more concerned about condemnation procedures than contamination,” Tobias J. Steivang of Walworth County Properties said in a brief interview.


Walworth County Properties contends the city is wrong in its claim that the Centralia Street site requires environmental cleanup.


However, the DNR asked Walworth County Properties this month if it intends to take responsibility for site cleanup.


In May, the DNR sent Walworth County Properties a third letter in three years notifying it of hazardous discharges on the property.


“WCPI believes that no environmental contamination at, under or from the property requires remediation; and, therefore, there is no public necessity to condemn the property,” the company’s injunction request states.


The city in its answer affirmed that “environmental contamination exists at the site (and) that there is public necessity to condemn the property.”


The DNR argues that groundwater under the site is contaminated, but Walworth County Properties insists the contamination originates from a nearby property.


Elkhorn City Administrator Sam Tapson said that if the city acquires the property, it could seek DNR grants for environmental remediation.


According to court records, the 47,000-square-foot property once supported a single-level brick building built in the 1950s by Oak Communications Systems to produce electrical converter boxes for cable TV firms and the military.


Oak Communications closed in the early 1980s. Walworth State Bank took title of the property through an auction in 2000.


“Neither the bank nor WPCI has initiated any necessary response actions. In light of the fact, the DNR is notifying you that it may elect to take some or all of the required response actions pertaining to this situation,” the May letter from the DNR states.


The cost of the cleanup could be put into a lien against Walworth County Properties, DNR records state.


Chlorinated-based cleaning fluids for circuit boards are the primary pollutants, according to DNR reports.


Walworth County Properties contends pollution at the Centralia Street site migrated from city property to its east. Earlier this year, Walworth County Properties asked the DNR for an exemption from responsibility for cleanup, claiming the pollution came from adjacent properties.


John M. Van Lieshout, an environmental attorney from Milwaukee, said the request for off-site exemption was his client’s response to the DNR letters.


“Based on that request, (Walworth County Properties) does not foresee any need to take any response actions at the property,” Van Lieshout wrote to the DNR. “Instead, the response actions should be taken by the party responsible for the contamination, which has migrated onto the property from an off-site source.”


The DNR twice denied the exemption request, saying contaminants originated from the 201 Centralia St. site. PCBs were found in the sump pump.


In a July 21 letter, the DNR letter wrote to Walworth County Properties: “The site contains discharges of hazardous substances to the air, lands or waters of the state that need to be investigated.”


Van Lieshout wrote to the DNR that he was not aware of any imminent threat to human health or the environment that would prompt state-funded action on the property.



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