Contamination cleanup key to Minami deal

Friday, April 11, 1997 | 11:59 a.m.

Hoping to beat a deadline of mid-June, the Las Vegas City Council is expected to give the go-ahead to its staff Monday to start the bidding process to find a company that will clean up the contaminated Minami site.

The property is set to be sold to the federal government for a courthouse to replace the Foley Federal Building across the street on Las Vegas Boulevard.

The Minami Tower site, once planned as the state's tallest building, failed to get off the ground when a Japanese developer pulled out several years ago and turned the land over to the city.

Earlier this year, the council voted to approve a series of cleanups to a portion of the site that was contaminated by leaking gasoline tanks -- a move that could cost the city hundreds of thousands of dollars more before it is rid of the property. The council will have a much clearer picture of those costs when the bids come in.

Dick Goecke, the city's director of the Department of Public Works, reminded the council in a memo that the city has "agreed to accomplish this work prior to the close of escrow, occurring in mid-June."

He listed the fiscal impact on the city's coffers as "unknown," noting that the Las Vegas Redevelopment Agency would reimburse the city. Because the agency and the council are one and the same, it amounts to the city robbing Peter to reimburse Paul.

So far, the city has spent about $1.7 million -- all of which has been reimbursed from the State Petroleum Fund -- to clean up the site. The city will be able to collect up to an additional $126,000 from the fund for additional cleanup, officials said.

Also, the city is spending up to $100,000 on a $1 million to $2 million insurance policy, which would cover the cost of a major cleanup, should that be necessary.

The deal was reached eight years after the Minami Tower was announced for the site -- which became known as the "Minami hole" when the developer left a wide and deep excavation when he bailed out -- and three years since the city began negotiating with the federal government.

The federal government plans to build a $97 million, seven-story structure on the six-acre site once occupied by small businesses.

Use of eminent domain by the city had pushed those dwellers off the site and gave control of the land to Minami developers on the idea that the many additional businesses in the tower would provide increased tax increment financing -- the life blood of redevelopment.

However, because the city cannot tax federal lands, the city now will receive no tax increment financing on the property.

The federal government, meanwhile, can still pull out of the deal if the hydrocarbon contaminants are not cleaned up.

Also, because the funding for the building is approved only through Sept. 30, it is possible the federal government could re-route the money to another project.

The contamination was caused by leaking tanks from a Rebel gasoline station that used to be on the northeast corner of Las Vegas Boulevard and Lewis Avenue, the city says.

In addition to the gasoline spill, the city also must clean up dirt fill contamination from the backfill used to cover the hole in 1994 and low concentrations of tetrachloroethane, which caused some groundwater contamination.

The city is under orders from the Nevada Department of Environmental Protection to clean up the land even if the deal with the federal government does not go through.

Should that happen, the city once again would be stuck with the fenced-in Minami site, only it would be contaminant-free and presumably easier to sell.