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As good as gold

In Medieval times, alchemists believed they could, with a dash of magic, turn lead into gold.

These days, city fathers up and down the I-15 corridor in Salt Lake County are putting their own magical spin on the ancient practice of alchemy: Turning properties contaminated with lead and arsenic into the hottest real estate in the valley.The properties are Superfund sites, and 10 years ago no one would touch them for love or money. They were worthless blights shunned by developers, a health danger to local residents and an embarrassment to city officials and business leaders trying to preach the gospel of economic development.

"There was a point where the county assessor valued residential properties around the Sharon Steel Superfund site at one dollar," said Christine Richman, economic development director for Midvale. "The Superfund stigma was so bad the county assessor tried to say Midvale properties were worthless."

Not anymore. People are now talking about turning Superfund sites like Sharon Steel into billion-dollar commercial developments.

That's because more than $500 million has been or is now being spent cleaning up 12 contaminated properties in Salt Lake County, at least eight of which now have developers drooling and city officials dreaming of ways to spend all the new sales tax and property tax revenue.

Lead into gold, if you will.

Midvale is sitting on one of the hottest properties anywhere in the Salt Lake Valley. And the question is not if it will be developed but when.

Located just west of I-15 at the 7200 South exit, the Midvale Slag site was once home to generations of mining activities, which contaminated the surrounding soils with lead and arsenic. That con-tam-in-a-tion is expected to be removed within the next year or so, freeing up about 250 acres with immediate access to I-15, rail lines and a major new 7200 artery linking the site to suburbs to the west.

The three laws of the real estate business are "location, location, location," and the Midvale Slag site has all three.

The area will likely be zoned commercial for stores, office space or eateries, something Richman calls a "major integrated development" that could well exceed a billion dollars in value. That development is currently on hold until the property owner and the EPA reach a financial settlement on final site cleanup. That settlement is imminent.

Midvale also wants to develop the neighboring Sharon Steel site, which has already been cleaned up under the Superfund program and has all the same location advantages as the Midvale Slag site.

The cleanup of lead and arsenic on one 160-acre portion included a polyethylene cap over the contaminated soils that cannot be breached with building foundations, leaving only low-impact options like a golf course or park. But another 100 acres around the cap do not have those restrictions.

Developers are already lining up their ducks over another Superfund site, this one in Murray. The 141-acre American Smelter and Refining Co. site in downtown Murray, better known for its two giant smokestacks, is targeted for cleanup this summer in anticipation of a massive billion dollar-plus redevelopment project.

Conceptual plans for the development, which is expected to eclipse the Gateway Project in downtown Salt Lake City, will be unveiled to the public next month. If developers make good on their initial commitments to Murray, the development will include a new Intermountain Health Care medical complex and a major commercial and retail center.

In addition to restaurants and stores, developers also indicate they will build a large movie complex on the old smelter site, and Utah Transit Authority officials have announced plans for a light- rail station there.

It's a bright future for a chunk of contaminated property that once appeared to be headed toward its own Superfund stigma.

Murray avoided that expensive hassle, however, by taking the initiative some eight years ago to begin working on a first-of-its-kind cleanup plan that kept the site off the dreaded list - at least officially.

Of course, saying the Murray site is not a Superfund site is city fathers' way of putting their own positive spin on it. The site was proposed for listing in 1994, and to environmental regulators, a proposed listing is treated the same way as a formal listing.

Nevertheless, city officials now point to a huge tract of prime developable commercial property in the central part of the Salt Lake Valley and dream of ringing cash registers that will bring in sales taxes and other revenues.

Mayor Dan Snarr's chief of staff, Darcy Dixon Pignanelli, said the smelter site development will tie together commercial activities along State Street into a contiguous whole bounded by Fashion Place mall on the south and the older downtown Murray on the north.

City officials are waiting for developers to come up with concrete proposals how the property will be used once it is cleaned up.

"Right now, there really isn't any partnership between the city and developers," said Pignanelli. "That's still being negotiated, and we don't have an agreement one way or another."

One of the costs, however, will probably be demolition of the two large smokestacks that have been among the Salt Lake Valley's most prominent landmarks over the past 80-plus years. Last month, Murray voters rejected by an overwhelming 4-to-1 margin a $3.5 million general obligation bond to stabilize and restore the chimneys.

While officials in Murray and Midvale are dreaming of the sounds of ringing cash registers, prime Superfund properties in Salt Lake City may experience another kind of real estate boom: industrial development.

Salt Lake City has two Superfund sites that have prime development potential and a third that may eventually attract interest (two other Superfund sites in the city have virtually no development potential).

The old Wasatch Chemical site, which has been cleansed of its pesticide past, has location advantages that will be unparalleled once freeway construction is completed. It is located where I-80 and I-15 meet and is visible to millions of passing cars every day.

With the exception of a neighboring car dealer, the area is currently industrial. But with the prime location, it is a developer's dream.

Another prime Superfund property is the old Portland Cement site at about 1700 S. Redwood Road where the kiln dust and chromium-contaminated bricks have all been removed. The site has good access to I-15, is smack dab in the middle of an industrial area and has potential written all over it. The current owners of the property are reportedly interested in development options.

Another industrial property with potential is the Ekotek Superfund site, located near the Amoco refinery. The site should be cleaned up later this summer, but questions regarding ownership of the property could delay any development.

Not all communities share the same visions of commercial or industrial grandeur that Murray or Midvale do. South Salt Lake, for example, has the infamous Vitro site, which once was home to a uranium mill that contaminated soils with radioactivity. Those soils were all removed in the 1980s at a cost of $50 million.

The site, ideally situated at the 33rd South exit on I-15, is no longer a health danger (state environmental regulators say the amount of radiation there now is less than natural radiation found elsewhere in the Salt Lake Valley).

But the current owners of the property, Central Valley Water Reclamation, have only modest plans for the site. They hope to begin construction on an executive nine-hole golf course this year, and they already leased several acres to owners of a deluxe driving range and golf shop.

Salt Lake County recently purchased the east end of the tailings site to building a garbage transfer station. Trash from around the valley will be dumped at the station, then moved to a large trash dump in Carbon County, said Central Valley director Reed Fisher.

Fisher said the proposed golf course will provide the central valley with a much-needed recreation facility (there are no golf courses in South Salt Lake), while providing a land buffer between the treatment center and neighboring residential and commercial areas.

But no one is talking about the kind of commercial potential coveted by Murray and Midvale.

The federal Superfund law, administered by the Environmental Protection Agency and designed to clean up the nation's worst environmental problems, has been controversial since its inception in the early 1980s.

Not only do communities loathe the stigma of Superfund designations, but private industry has come to fear it. The way the law is written, the government first requires entities responsible for the mess to pay for the cleanup.

But the term "responsible party" has been interpreted as any person or business that ever had a financial interest in the property, even if they never contributed to the environmental problem. Many of the companies that owned Superfund properties have simply declared bankruptcy.

"There are many cases where someone came in and bought a (contaminated) property from someone else who created the problem and the buyer ended up paying through the shorts," said Brad Johnson, Superfund branch manager for the state Department of Environmental Quality.

If those companies do not have the financial resources or no longer exist, the cleanup is paid out of the federal Superfund, which is replenished with a tax on the petrochemical industry.

Utah has 16 Superfund sites, 11 of which are in Salt Lake County, one in Summit County, one in Tooele County, one on the Davis-Weber County border, another in Weber County and one in San Juan County.

A 17th environmental cleanup, the Vitro site, was started before Superfund and was funded under a different federal program.

Cleanups can be a regulatory nightmare. They generally involve not only the EPA but the state Department of Environmental Quality, the local city government and the private landowners. And rarely do all entities agree on the nature of the problem, let alone the remedies to clean it up.

Johnson said the EPA is now looking at various other sites in the Salt Lake Valley for listing as Superfund sites, primarily old landfills. But the most serious problems, "the big remnants of Salt Lake's mining days," will all be cleaned up and primed for development, he said.

But will that loathsome stigma of a Superfund designation ever go away?

"People are less fearful," Richman said, "but they need assurances. The EPA sends out letters that the properties are clean and safe, but we still get the calls from people looking to buy and from the banks and title companies. We walk them through it and explain what it all means."

And to city officials, it means you really can turn lead into gold.