Would-Be Chicago Developer Peeved at ‘Secret’ Deal Between People’s Gas & EPA

CHICAGO (CN) – A Chicago property owner says People’s Gas “secretly” made a deal with the EPA to include his property in a superfund program covering former gas manufacturing sites in Chicago, costing him millions because the land cannot be sold for development.

Chicago’s Goose Island – a 160-acre artificial island in the middle of the Chicago River just a short walk from the Magnificent Mile – was once a booming industrial corridor.

In the 19th century, Peoples Gas, Light & Coke bought the land on the east end of the island and built industrial plants, earning the area the nickname “Little Hell” because of the smoke produced by the factories.

The plants produced gas from coal until the mid-20th century, when coal gas began to be replaced with natural gas. By-products of the process include polynuclear aromatic hydrocarbons and heavy metals such as arsenic and lead, which can still be found in the groundwater and soil at these sites.

Goose Island remains extremely polluted, but the city has introduced plans to redevelop the area for commercial and residential use given its convenient location close to downtown.

In a complaint filed Tuesday by attorney Gregory Scandaglia of Scandaglia Ryan, F. Ned Dikmen says he owns 1.5 acres of land that was the former site of a People’s Gas plant located just east across the river from Goose Island. That land is held in trust for Dikmen by Trust No. 30613.

Under the terms of the trust agreement, People’s Gas allegedly “agreed to remediate the property to meet the Illinois EPA’s environmental cleanup standards for residential use. Upon completion of the remediation, People’s promised to take the necessary steps for the IEPA to issue an NFR [No Further Remediation letter] for the property, thereby providing Mr. Dikmen and his successors with the ability to pursue residential development of the property.”

The cleanup was supposed to begin in summer 2006. Instead, “People’s secretly and without Mr. Dikmen’s knowledge or consent voluntarily entered into an administrative order on consent with the U.S. EPA covering the property and other of People’s properties,” the 18-page lawsuit claims.

In 2007, the federal EPA entered into an agreement with People’s Gas to oversee the investigation of 11 former manufactured gas plants in Chicago, including four sites located on or near Goose Island.

By entering into an agreement with the federal environmental agency, People’s Gas allegedly stripped Illinois authorities of jurisdiction to issue a permit declaring the site clean and ready for residential development.

“The remediation of Mr. Dikmen’s property is still not completed. Rather than cooperating with Mr. Dikmen in seeking to obtain the contractually promised NFR, Peoples instead affirmatively engaged in conduct that defeated the purpose of the settlement agreement,” the complaint says. “As a result of People’s breach, Mr. Dikmen has lost several opportunities to sell the property to interested developers, resulting in the loss of millions of dollars.”

In addition, Dikmen says he has spent a lot of money paying attorneys in his effort to clear the property of legal barriers to development.

He seeks recovery of those costs, plus lost rental costs and damages for the diminished value of the property.

People’s Gas spokeswoman Vanessa Hall declined to comment on pending litigation.


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