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File photo. Signage outside an 11-acre property at Sylvan Corners was posted last year, as the city invited bids from interested developers to purchase the lot. // CH Sentinel

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Sentinel staff report–
An estimated 36 tons of hazardous waste and 190 tons of additional waste will be excavated and removed from an 11-acre city-owned lot at Sylvan Corners, following an environmental report documenting soil contamination at the site.

The land was once home to the old Sylvan Middle School, which was demolished in 2016 and rebuilt on an adjacent property. The city subsequently purchased the 11.3-acre site from the San Juan Unified School District in 2019 for $3.4 million, hoping to quickly turn the property around and sell it to a preferred developer in order to have more say in what the future use would be.

The city’s plan took a hit in 2020 when the pandemic struck and only one offer was received from a developer during an offering period. Some council members expressed disappointment in the lackluster plans for more housing instead of mixed-use commercial, but voted 4-1 to sell the property to Woodside Homes for $4.17 million, pending a due diligence period.

As part of the due diligence process, Phase I and Phase II environmental reports were conducted by Woodside Homes, uncovering soil contamination associated with the former middle school.

When was contamination discovered?
City spokeswoman Nichole Baxter told The Sentinel in an email that no one in the city manager’s office or on the city council knew the soil was contaminated before the city purchased the property. She also said the city “became aware of the environmental discrepancy during Woodside Homes’ due diligence period, while they were examining the soil for residential use.”

City Attorney Ryan Jones also called the matter “a small environmental discrepancy” in a report to the council on Dec. 9, saying that the contamination found was “slightly over the allowable threshold for residential development.” He noted that contamination levels “were so small that had it been a commercial development, remediation wouldn’t have been necessary at all.”

Asked why a Phase II report was not conducted prior to the city purchasing the property in 2019, Baxter said Dudek, the environmental consulting firm hired by the city for a Phase I report, “did not recommend a Phase II.” She also quoted from the Phase I report’s finding, which said “This assessment did not reveal evidence of RECs (recognized environmental conditions), HRECs (historical recognized environmental conditions), or CRECs (controlled recognized environmental conditions). Thus, no further investigation appears warranted at this time.”

A Sentinel review of Dudek’s report found several “items of concern” were listed, but none appear to have been  related to the chemical contamination later discovered.

Items of concern included records of an underground asbestos-cement pipe that could not be confirmed as having been removed, as well as the possible presence of an underground storage tank that was reportedly left abandoned at the site in 1973. The report also said 65 tons of asbestos-containing waste were removed from the site in 2004.

A separate Phase I report conducted in 2021 by Youngdahl Consulting Group found several potential environmental hazards, based on a prior Hazardous Materials Survey documenting lead-based paint, as well as potential for soil contamination from termite pesticides and polychlorinated biphenyls (PCBs) due to construction dates at the school. The report recommended soil samples be taken, which were conducted in as part of a Phase II report.

What contamination was found?
Limited details were included in a Dec 9 staff report to the City Council, but a remediation plan released to contractors bidding on the contamination cleanup said “PCB compounds Aroclor 1254 and 1260 were detected at concentrations exceeding residential screening levels in four samples analyzed.” Additionally, the “organochlorine pesticide compounds dieldrin and chlordane-technical were detected above laboratory reporting limits in multiple samples, and chlordane-technical exceeded residential screening levels and the hazardous waste threshold in one sample.”

Subsequent depth testing in certain areas of the site found PCB contamination did not exceed six inches, and the pesticide compound contamination was found to be “unlikely to extend beyond a depth of one foot in this area due to the difficulty of percolation through the cemented soils that were encountered.”

The chemicals found were typically used as termiticides and in caulking, although their use has since been prohibited.

What will be done to remove contamination?
The plan calls for areas with documented contamination to be “overexcavated, characterized as potential hazardous and/or non-hazardous waste, and disposed of to the appropriate landfills.”

The Citrus Heights City Council on Dec. 9 voted to approve a $98,998 contract with Innovative Construction Solutions, Inc., for the removal of the waste specified in the remediation plan. Funding will come from the city’s General Fund reserves, according to a city staff report.

The plan estimates waste to be 36 tons of hazardous and 190 tons of non-hazardous material, but also states “These quantities may change as confirmation samples and sample results for disposal of soils dictate.”

Is the city losing money on the property?
The city purchased the land from the school district for $3.4 million, and is still expected to sell it for $4.17 million. But since the property was purchased using the city’s line of credit, a staff report in January said the city had incurred $192,000 in interest and another $57,000 in ancillary fees, and continues to incur interest fees each month.

As reported by The Sentinel earlier this year, another $150,000 in interest payments were anticipated to be paid through January 2022, when the city anticipated receiving final payment from the developer. That timeline is likely to be delayed however.

With the additional $99,000 remediation, it appears the city would still stand to pocket about $200,000, if the full $4.17 million is received by the beginning of next year and the project moves forward, according to staff projections. The offer price is contingent on the property being approved for 93 homes, with the price reflecting $50,000 per single-family detached lot and $30,000 for the smaller lots. If less homes end up being able to be built at the site, the offer price would go down accordingly.

From January: City Council votes 4-1 to sell large Sylvan Corners lot to housing developer

Why housing?
During council consideration of Woodside Homes’ offer in January this year, Councilman Bret Daniels said he would have preferred to wait for a better offer to come along with mixed-use or other potential, but noted continued interest payments would make doing so cost-prohibitive. With Woodside Homes being the only developer to make an offer during a 120-day offering period, Daniels opted for a “reluctant yes” on the sale.

Councilman Tim Schaefer, who was the lone “no” vote on selling the property to Woodside Homes, also expressed disappointment, saying the city didn’t accomplish anything by purchasing the lot and then selling it to a developer for homes to be built on.

Then-mayor Steve Miller offered a different perspective, saying the city’s housing goals encourage home ownership, and noted the city already has vacant commercial buildings needing to be filled. Miller said he “would love” a sports complex or similar use, but also said: “it just doesn’t pencil out for us.”

“We could have very well been looking at a proposal that was apartments, a gas station, drive-thru restaurants, or another strip mall that we don’t need,” said Miller, during January’s council meeting. “So I think it was very important to take control of this, and yes, it did cost us a little in interest payments, but the goal was to break even, and I think we’re doing that — maybe even a little better.”

About termiticides and PCBs
According to the city’s remediation plan, organochlorine termiticides (OCT) “are a group of persistent pesticides that were formerly used for termite control in and around wooden structures from the mid-1940s to the late 1980s,” and include chlordane, aldrin, dieldrin, heptachlor, and DDT.

Chlordane and other ganochlorine pesticides (OCPs) were commonly used as termiticides around structures until 1988, when their use was prohibited in 1988. In 2004, the California Department of Toxic Substances Control (DTSC) evaluated OCPs in soil for proposed school sites on residential properties; finding chlordane in 98% of the samples, DDT in 95%, as well as other chemicals. The agency subsequently released interim guidance for evaluating school sites for soil contamination in 2006.

Polychlorinated biphenyls, or PCBs, are described in the document as “a series of chemicals typically used as a heat transfer media, plasticizer, and other industrial uses.” PCBs “have been identified as probable human carcinogens and may cause a variety of non-cancer health effects.”

The EPA has recently raised awareness that schools and large apartment complex buildings constructed or renovated between 1950 and 1979 may have widespread occurrence of PCBs in caulk and other building material.

What’s next?
According to City Attorney Ryan Jones, remediation work at Sylvan Corners is expected to begin in January and take several weeks to complete. In answer to a question from Councilman Schaefer, Jones said Woodside Homes is interested in closing the sale of the property “within the next 30 days or less.”

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