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Legal precedents in Alberta could mean Flames’ arena site gets cleaned up by a third party

24-Aug-15

By Geoffrey Morgan, Financial Post - Calgary

This article originally appeared in the August 24th issue of The National Post.

CALGARY – The empty streets of Lynnview Ridge, a community in this city’s southeastern quadrant, offer a precedent for forcing polluters to pay to clean up contaminated sites decades after the companies have moved on, lawyers say.

That precedent could provide some hope for the owners of the Calgary Flames NHL franchise as they seek to build an $890-million sports complex, with a combination of private and public money, on a site west of downtown that has been contaminated with coal tar creosote since 1962. Wide-ranging estimates for clean up costs would add between $50 million and $300 million to the price to develop the site for an arena.

“Under Alberta’s main environmental statute, the Environmental Protection and Enhancement Act, there is a fundamental polluter-pays principle that’s enshrined in the legislation,” said Gavin Fitch, an environmental lawyer and partner with McLennan Ross LLP.

Fitch represented a group of residents on Lynnview Ridge in Calgary, where houses were built on a site that had been contaminated with petrochemical products decades earlier. The Lynnview Ridge residents found their basements smelled of hydrocarbons years after Imperial Oil Ltd. closed and remediated a nearby refinery.

He said Imperial purchased all of the houses on Lynnview Ridge, compensating the residents for the contamination – even though the company had not operated in that area for more than 30 years.

In this case, he said, it was residents who complained, and that forced the province to act and pursue Imperial.

“It’s typically the environment department that will get involved and mandate a cleanup and they can go after a current owner, or a previous owner or even an occupier if their activity is what caused the pollution,” Fitch said.

Asked whether Calgary Sports and Entertain Corp., which owns the Flames, the CFL’s Calgary Stampeders as well as the local lacrosse and Western Hockey League teams, is pursuing the company that polluted the site of their proposed new arena, president and CEO Ken King said, “No, nor do I anticipate we will.”

“The file is in the hands of the Calgary Municipal Land Corp. now; they will deal with it as they see fit,” King said in an interview Monday.

Calgary Municipal Land (CMLC) manages the city’s real estate holdings and is responsible for the development of Calgary’s East Village, a community revitalization project on the opposite side of downtown from the Flames’ proposed arena.

“All we would seek is some degree of expediency in dealing with the file,” King said.

Documents from the Alberta government identify Montreal-based paper producer Domtar Corp. as the company that operated as Canada Creosote Co. and left the coal-tar contamination in the ground when it closed operations in Calgary in the 1960s. Domtar did not respond to requests for comment.

King would not single out Domtar as the source of the creosote contamination west of downtown Calgary.
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“I don’t really have a view in terms of whose fault it is or whose responsibility it is, but it’s somebody’s and we would be anxious, as everybody else in the city now would be, to understand how that might work itself out,” he said. His proposal for the area includes a new home for the Flames and the Stampeders and a field house for local sports.

Jillian Henderson, a spokeswoman for the city, said in an emailed statement that Calgary had not sought compensation from the Canada Creosote Co. for the contamination. “The province is the appropriate regulatory agency to determine responsible parties,” she said.

The city also stated in a post on its website on Friday that it was not responsible for the area’s clean-up costs.

“In 1997, a Release Agreement was signed between the Province and the City stating the Canada Creosote site contamination was not caused or contributed to by the City,” a statement on the city’s website reads.

The provincial environment ministry did not immediately respond to a request for comment on whether the province had ever tried to force any previous owners of the land to remediate the creosote contamination.

If the province does act under EPEA to remediate the land for a new sports complex, the case could take years to come to a resolution.

Fitch said the Lynnview Ridge case came to a close after several years, and the site now continues to sit empty. The province sent residents who continue to live nearby a letter in 2009 stating the area was free of contamination. Imperial did not respond to a request for comment.

Today, barren lots where houses once stood line the site’s empty streets and are separated from the rest of the neighbourhood by fences.

Asked whether Calgary Sports and Entertainment had a specific date by which the site west of downtown needed to be cleaned up, King said “there’s no deadline,” but added the contamination represents a challenge to the massive project moving forward.

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