Since the late 2000s, millions of dollars have been spent demolishing the eight-story Royster-Clark fertilizer plant on Madison’s East Side and cleaning up the ground underneath and around it.

Plans call for replacing the hulking eyesore along Cottage Grove Road with a $65.9 million development containing hundreds of housing units interspersed with commercial space and a centerpiece new Pinney Branch library.

As part of the cleanup, Ruedebusch Development and Construction hauled away thousands of tons of contaminated soil, replacing it with 78,000 cubic yards of fill brought to the site in 2013.

It was only later that the company learned the fill material — enough to fill 3,900 dump trucks — was itself contaminated.

Since then, the company and the state Department of Natural Resources have been working on a plan to remove or cap the problematic soil under a parking lot and some commercial development.

But the problem has added about $400,000 in costs to Ruedebusch and piled additional complications on the much-anticipated project.

“We will do the cap and then we’ll get (DNR) closure,” Carl Ruedebusch said last week.

Former Royster-Clark plant

The neighborhood is eager to see more pieces of the project move ahead, said Ald. David Ahrens, 15th District.

“This has been years and years in the making,” he said.

Built in the 1940s, Royster-Clark produced and mixed granulated fertilizer. The site had several structures, including an eight-story production facility.

In 2006, Agrium U.S. Inc. acquired the holdings and closed the plant.

Two forms of contamination — petroleum leakage and chemical contamination from fertilizer production — occurred at the site, according to the DNR.

In 1990, three leaking underground storage tanks were removed. And in 2007, Agrium began working with the DNR under a voluntary program that ensures sites are properly cleaned while limiting liability for prospective buyers.

Ruedebusch acquired the site from Agrium in August 2011. The plant was demolished and the site remediated in late 2011 and early 2012. As part of that, about 55,000 tons of nitrogen-contaminated soil were excavated and spread on land in the town of Cottage Grove, with additional soil not suitable for spreading disposed at a landfill.

The city had already worked with neighbors and conducted planning for what was to follow at the site, and city approvals to begin building were secured by late 2013.

The site “kind of came with a vision,” Ruedebusch said. “From my standpoint that was a good thing. It had been vetted.”

But before Ruedebusch could get a green light to move forward, the DNR found a problem.

Tainted

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In preparing the site, Ruedebusch determined fill would be needed.

R.G. Huston Co., which demolished the Royster-Clark facility and removed the contaminated soil, had also won a contract for the reconstruction of nearby Monona Drive. Ruedebusch hired Huston to deliver material from the Monona Drive project to the Royster-Clark site.

“We had a permit,” Ruedebusch said, adding that he and Huston believed the action was supported by the state. “There was no red flag,” said Huston’s secretary-treasurer, Wade Huston.

But testing required by the DNR revealed that the fill was contaminated with polycyclic aromatic hydrocarbons (PAHs), which can cause a health risk if people come in direct contact with it.

PAHs are found in coal, heavy fuels like oils, asphalt, charcoal-grilled foods, vehicle exhaust and other sources, said Linda Hanefeld, team supervisor for the DNR’s Bureau of Remediation and Redevelopment. The source of the chemicals in the fill from Monona Drive is unclear, she said.

The DNR requires such contaminated material to be taken to a licensed solid waste facility, unless an exemption is granted for placement in a safe, alternative location.

With thousands of truckloads of the material spread on his site, Ruedebusch said he was stunned to learn it was contaminated.

“My first reaction was, ‘BS,’ ” he said. “We were obviously concerned and disheartened. We certainly wouldn’t have brought it there if we thought there was something wrong with it. We wouldn’t spend millions of dollars to decontaminate a site just to recontaminate it.”

Even so, responsibility for complying with the law rests with the property owner, Hanefeld said. “The property owner did not request written approval from the DNR to bring that material to the Royster site.”

Ruedebusch said he considered suing the state but decided it would be costly and time-consuming, with no assurance of success. Instead, he’s worked with the DNR to manage the fill and move the project forward.

It’s not uncommon for certain levels of PAH contamination to be left on a construction site as long as it’s under an impervious surface, DNR documents say. The contamination is of concern for workers during construction, but the threat can be addressed with common safety precautions.

Ruedebusch moved about 30,000 cubic yards of the fill to the Stoughton Road-Cottage Grove Road interchange project, where it was safely capped.

Last year, Ruedebusch worked out a plan with the DNR to move some fill from part of the site to another area of the property to allow the safe construction of the first building on the site, the three-story, 71-unit Dempsey Place Apartments. Movin’ Out/Stone House Development should complete that building this month, with full occupancy by the end of April.

But the fill problem caused about a six-month delay in closing on the property, said Dave Porterfield, real estate developer for the nonprofit Movin’ Out. “(Ruedebusch) took on a very tough project and has stuck with it.”

That first phase of construction showed the neighborhood the project is finally happening, Ahrens said, but “it’s still a fairly desolate-looking site.”

But Ruedebusch still must deal with about 40,000 cubic yards of contaminated fill.

“First, he needs to make sure that the development is done in a manner that all exposure pathways of concern are addressed — such as direct contact,” Hanefeld said. “Second, he needs to see that the contaminated soil is excavated and/or managed appropriately, by getting approvals from the DNR.”

Ruedebusch’s plan moves fill from residential areas and places it under lots covered with crushed concrete, a step leading to a final DNR sign-off, which would ease financing or land sales for the remaining redevelopment.

Next steps

In December, Ruedebusch requested $2.1 million in city tax incremental financing (TIF) support for the next phases, including the relocated Pinney Library branch, a four-story building with 86 apartments and 16,500 square feet of ground-floor commercial space, and another building with 4,800 square feet of commercial space.

Construction on the library and apartment building was supposed to begin last month, but groundbreaking for it and the smaller commercial building now will likely occur in April or May, Ruedebusch said. The delay is the result of the city’s timing to install interior roads and budgeting money for the library, not any problems with the fill, he said.

“The anticipation now is we’ll see construction equipment in the spring, and, come the summer, we’ll see the beginnings of the library,” Ahrens said. “The keystone is the library.”

The timing of two more phases that have won city approvals — 9,900 square feet of commercial space with 22 apartments and another with 80 multi-family units — will likely be pushed back about six months to the fall of 2017 and mid-2018, Ruedebusch said. The developer also has concepts for more commercial space and housing on two other lots.

“We’re in the development-construction business,” he said. “This wasn’t the first time we were surprised by something. It won’t be the last.”

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Dean Mosiman covers Madison city government for the Wisconsin State Journal.