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Federal judge says city not liable for contamination of Ashland lakefront

A federal judge has ruled that the city of Ashland and Ashland County are not responsible for the cleanup of a designated Superfund site on the city’s lakefront.

The land at issue is a 12-acre parcel in the city of Ashland bordered by Highway 2 to the south, Prentice Avenue to the east, Ellis Avenue to the west and Chequamegon Bay to the north, according to the EPA.

According to the EPA, the groundwater, soil and lake sediment at the site are contaminated with polycyclic hydrocarbons and volatile organic compounds.

In 2002, the lakefront became a Superfund site, which is an area designated by the EPA for long-term cleanup of hazardous materials. The EPA estimates the cleanup will cost nearly $100 million.

Most of that expense will fall to Xcel Energy, a large utility company based in Minneapolis, according to court documents.

Northern States Power Co., Xcel Energy’s Wisconsin subsidiary, discovered in 1987, after taking over a former gas plant there, that the area was contaminated. The Wisconsin Department of Natural Resources later notified the city of Ashland, the railroad and Northern States Power that they were possibly responsible for the contamination.

Northern States Power then sued Ashland County, the city of Ashland and other former occupants of the site in federal court in 2012.

Northern States Power argued that although it had accepted responsibility for the contamination in the area of the former gas plant, Ashland County and the city of Ashland were responsible for the rest of the site and should contribute to the cost of the cleanup.

Complicating the case, Ashland County for three years had owned an abandoned lumberyard that had operated in the area. Citing that fact, Northern States accused the county of failing to clean up wood-treatment chemicals left behind by the former owner of the site, Schroeder Lumber Co.

The neglect let chemicals seep into the ground, and the contamination was only worsened when onsite smoke stacks and garbage burners were knocked down.

As for the city, which took over the land in 1942, Northern States contended it also failed to clean up the site, which eventually became a park. Other allegations accused the city of letting employees dump waste and the oil of government vehicles on the land.

The court disagreed.

On Sept. 11, U.S. District Judge Barbara Crabb removed the county from the lawsuit. In doing so, she noted that the county had been required to take over Schroeder Lumber’s former lumberyard after the company had failed to pay its taxes. She also pointed out that the county had not operated equipment while it owned the company’s property.

Crabb also ruled that the city of Ashland was not responsible for the contamination and not required to pay for the lakefront cleanup. Evidence at trial, according to Crabb, showed that most of the contamination came from the gas plant but that the city was careful to make sure it didn’t disperse any water or soil that had been contaminated.

Crabb also noted that, in contrast to Xcel, the city of Ashland doesn’t have the resources to absorb the cost of cleaning up the site. The city has an $11 million borrowing limit. That has already been reduced by $4.4 million as the city has made upgrades to century-old fire stations and overdue repairs to roads. Millions more, she wrote, are needed to fix the city’s sewer and water systems.

Xcel, on the other hand, according to the decision, has $25 million in settlements from other defendants in the lawsuit plus insurance money to handle the cleanup.

Crabb also noted the city’s declining population and that the city had gained little from the park whereas Xcel benefited from the gas plant.

“At this point, it is still too early to know whether the park can ever be remediated sufficiently to allow the full range of park activities,” she wrote. “Even if it can be, the remediation will not put the city in any better position than it would have been had the contamination never occurred.”

About Erika Strebel, [email protected]

Erika Strebel is the law beat reporter for the Wisconsin Law Journal and a law school student at UW-Madison. She can be reached at 414-225-1825.

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