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No payouts on polluted land Niagara County has exempted such properties from taxes

LOCKPORT -- Owning a piece of contaminated property in Niagara County can come with a silver lining.

You might have to pay cleanup costs. You might have a hard time selling.

But look at the bright side: You won't have to pay your property taxes.

Counties across New York State have the prerogative to forgive unpaid property taxes on hazardous waste sites -- most handle the issue on a case-by-case basis -- and Niagara County decided to do so seven years ago, after being burned on a hazardous waste site that cost taxpayers $136,000 in a cleanup investigation.

Since then, the county no longer forecloses on property where there might be environmental problems.

That decision has proved costly, too.

In all, the county lists 84 parcels that may contain hazardous waste on which the taxes are in arrears. The total unpaid is almost $1.6 million.

The county also has identified 10 to 15 other parcels where contamination is certain. Those taxes also are unpaid.

Most of these "red flag" sites are taken straight from lists of potentially contaminated locations compiled by local officials or state and federal environmental agencies. County officials in several departments are asked to review the foreclosure lists before they're filed in court, to delete parcels they believe have environmental problems.

But what if your property isn't on any of those lists? Can you still avoid paying your taxes?

In the case of Lewiston attorney Paul Grenga, the answer is yes, a Buffalo News investigation has found.

Grenga, a veteran lawyer who serves the Lewiston Village Board and is involved with redevelopment efforts in downtown Niagara Falls, owns a strip plaza at Military and Grauer roads in the Town of Niagara. The main activity there is a wholesale tire store in a space that once was a gas station owned by his father, Paolo, who died in 2000.

Property taxes on the parcel haven't been paid since 1994. The amount owed to the county has reached $218,000 in principal, interest and penalties.

When the county treasurer's office sent Grenga a foreclosure notice last year, he responded by producing a report from a private environmental company, Buffalo Environmental Consultants, maintaining the site was hazardous.

Two weeks later, Culbert's Wholesale Tire at Military and Grauer roads was among properties deleted from the foreclosure list in a document signed by County Treasurer David S. Broderick.

"It would be disingenuous of me to say that my hope was that the county would not take it off when they had confirmation of the environmental problems," Grenga said.

Asked why he didn't simply pay the taxes, Grenga replied, "What's the upside? Most of it is interest and penalties accrued before my father's death. . . . It's not the same as someone trying to hang onto a house. It's a real issue. It's something I inherited."

The environmental inspection cites the potential on the property for asbestos-containing building materials, lead paint and untested underground storage tanks. It notes the presence of leaking above-ground storage tanks with stained soil, mounds of solid waste in improper containers, used tires and other car parts on the grounds, and stained and stressed vegetation indicating potential soil contamination.

If there are any environmental hazards at the tire store, they have not come to the attention of environmental agencies. Meghan Boice-Green, spokeswoman for the state Department of Environmental Conservation's Buffalo office, said the DEC has never investigated the site.

Amy E. Fisk, Niagara County's environmental planner, maintains a master list of brownfields in the county. She said there are no Military Road properties on that list.

Last year's list of proposed tax foreclosures was reviewed by Fisk and by other officials in the county Health Department, the Refuse Disposal District and others. None of them flagged Grenga's property for deletion.

>Confused by decision

Environmental threats to the property also came as news to J. Roger Culbert, owner of the tire store in the former gas station.

"I don't know of any," Culbert said.

He denied there were mounds of waste, leaking above-ground storage tanks or batteries on the ground. And he did not know of any lead paint or asbestos in the building. "No reason to," he said. "All I do is tires."

Culbert said the used tires are hauled away once a month by Modern Disposal. He also said he didn't know who the owner of the property is.

Broderick knew. He worked for Grenga's father in 1962, pumping gas at what used to be a Sinclair station on the site. As the 34-year veteran treasurer reviewed the environmental report Grenga sent in, he commented, "It doesn't look like something we'd like to add to our fixed assets."

Bank officials felt the same way, Grenga said.

"M&T Bank did some sort of environmental investigation of their own, so they would not foreclose . . .," he said. "It's not like somebody made up the problem."

Grenga said he's interested in selling the property. "The market at that end of Military Road is getting better," he said. But he estimated it would cost $100,000 to clean up the site. "Those two buildings there, they hardly generate $20,000 a year," he said.

Unlike Grenga's, other properties deleted from the foreclosure auction were found on lists of brownfields kept by the county or individual municipalities. Others were flagged by Paul Dicky, an official of the county Health Department, who cited several as "junkyard or industrial [sites that] may require a detailed review for potential environmental concerns."

They include parcels owned by Samuel S. Sansone of Lockport and the Cambria Housing Authority on the former Nike missile base off Shawnee Road in Cambria. Sansone owes more than $142,000 in back taxes on his lots there. But his story illustrates what can happen when one buys a toxic hot spot.

Sansone said that when he bought property at the decommissioned missile base in 1984, he was given an environmental report that the state Department of Correctional Services ordered three years before, when it was briefly considering buying the land and building a prison on it.

The DEC had approved the reclassification of the land from an inactive hazardous waste site to a nonpotential hazardous waste site. Relying on that, Sansone started developing subsidized housing on the property, but when he started digging foundations for a housing project in 1988, he unearthed a collection of 55-gallon drums marked with the Dow Chemical logo.

After five years of struggle with the U.S. Army Corps of Engineers, the empty drums were removed, along with 70 electrical transformers that contained cancer-causing PCBs and an assortment of underground storage tanks. Meanwhile, an inventory of the abandoned buildings on the missile base, which Sansone now owned, disclosed asbestos, lead pipes and lead paint.

"Those buildings were totally, totally useless. They had no value," Sansone said. But they're still standing. Sansone said the corps has never come up with the money to demolish them.

Sansone bought 18 acres near Niagara County Community College and built the 37 homes on Northway and Southway drives. He also developed the 29-unit Unicorn Apartments, owned by the Cambria Housing Authority, in a former barracks at the missile base. "That land never turned up any barrels," Sansone said.

Belmont Shelter Corp. rehabilitated four other barracks into 24 senior apartments in 1994.

Sansone said he will settle the taxes if the buildings are demolished, either by the corps or through a grant the town applied for. Or, he said, he will cover 10 percent of the demolition cost if the county will let him pay taxes on the land only, not the buildings.

>No firm policy

All county taxpayers are impacted when it comes to the $1.6 million in unpaid taxes on those parcels on the hazardous list. That's because other property taxpayers have to make up the difference in the county's overall tax bill.

Many other counties, including Erie County, don't have a firm policy on whether to foreclose on environmentally questionable properties.

"We evaluate them on a case-by-case basis," said Drew Eszak, Erie County commissioner of environment and planning.

Kenneth Swanekamp, director of business assistance in Eszak's department, said a tax lien sale, at which third parties may bid at auction to win the right to collect the delinquent taxes from the property owner, would prevent a situation like the one on the Grenga property.

"If an owner of a property tried that tactic, he couldn't sell [the property] because that lien would have to be satisfied," Swanekamp said. "I can't imagine what he thinks he's accomplishing. All he's doing is putting off the inevitable."

But if the property were polluted, "Who would buy the lien?" asked Eileen Krueger, chief tax clerk in the Niagara County treasurer's office. Niagara County stopped selling liens in 2002, when it went to an accelerated foreclosure timeline that is just beginning to come online.

The New York State Association of Counties thinks the state ought to step in.

"Our position on environmentally compromised tax lien properties is that they should be a matter of state concern. This is a complex area in which counties exercise due caution. Counties are not in a position to take title, environmental liability or financial responsibility for a potentially hazardous property," said Mark F. LaVigne, spokesman for the organization.

Aware that it may be unwarranted for some property owners to be on the list, Niagara County lawmakers are trying to do something about the problem. Last fall, the Legislature's Economic Development Committee authorized an application for a $200,000 grant from the U.S. Environmental Protection Agency. Fisk said the county expects to hear this month if it won the money.

If the grant is received, the county will use it to conduct a first-phase environmental assessment of the 84 parcels to see if they're really potentially hazardous.

e-mail: tprohaska@buffnews.com

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