Whirlpool exec reports property settlements, says company will ‘continue to be responsible’ following plant sale

Representatives from Whirlpool and Ramboll Environ, the company’s environmental consulting firm, reported progress on multiple fronts to the Fort Smith Board of Directors on cleanup efforts at the former site of its 1.2 million square foot manufacturing plant Tuesday (April 11).

The appliance manufacturer shuttered its doors in June 2012, moving most production jobs to Mexico. One year later, the company admitted to leaking trichloroethylene (TCE), a potentially cancer-causing chemical, into properties north of the Fort Smith-based plant.

On Tuesday, Whirlpool Vice-President of Communication and Public Affairs Jeff Noel reported that settlement agreements had been reached with all affected property owners in the well-ban area whose properties were devalued by the Sebastian County tax assessor.

Notices went out from the assessor in 2013 informing residents within the contaminated neighborhood and “fringe” areas their properties had been reassessed and in the county’s eyes, were worth less than just a year or two previously. After reassessments in early 2013, which began following Whirlpool’s attempt to get the city of Fort Smith to pass an ordinance banning the drilling of groundwater wells in the neighborhood due to the contamination, total values of properties in the affected area declined by 41.28%, from a collective value of $9.831 million to $5.773 million.

In January, Sebastian County Assessor Zach Johnson said a countywide appraisal in 2015 saw no bounce-back in property values from the previous assessment.

“Values remained with a negative effect,” Johnson told Talk Business & Politics, adding that it will likely remain that way “until we get a clean bill of health from the ADEQ” and sales in the area start reflecting a recovery.

Property owners filed lawsuits against Whirlpool shortly after the 2013 announcement. Homes sitting on the plume, also known as the primary area of contamination, had land values reduced by 75% and building values reduced by 50%. In all, the spills affected 55 parcels of land, including 49 residences and three commercial buildings. Properties just off the plume but bordering the plume zone, referred to as “fringe” properties by former Sebastian County Tax Assessor Becky Yandell, had land values reduced by 75% and structure values reduced by 25%. Twenty-six parcels were affected in the fringe area.

In May 2015, Noel told Talk Business & Politics 48 of the 50 property owners in the original plume area had settled with the company. The remaining two were area non-profits. Homeowners in the settlement received 100% of their property devaluation plus 33% of the devaluated amount. For example, one homeowner had a $90,000 property value prior to the TCE pollution, with that value lowered to $43,000 after the pollution was known. Whirlpool paid that person $64,000 to cover the $47,000 loss plus 33% of the loss.

The company sold the plant to Milwaukee, Wisc.-based Phoenix Investors on Feb. 17, but remains responsible for environmental remediation. Noel said supplemental remediation activities “are continuing when necessary to mitigate plume migration with ADEQ (Arkansas Department of Environmental Quality) oversight” and that “ongoing extensive testing continues to confirm the absence of health risks.”

To back up those assertions, Noel noted the company had seen 98% reduction in TCE levels in the central “neck” area of the property along with 85% reduction in Areas 2 and 3 — so-called “fringe” areas in the north plume — and 80% reduction in Area 1, the fringe of the south plume. Noel said there were no exposure pathways that would cause a health risk to persons at the site, residential properties, or the nearby Boys and Girls Club. Moving forward, the company will continue to conduct semi-annual groundwater monitoring and reporting to ADEQ and continue to monitor site and off-site conditions.

Of the new owners, Noel said he believes the city of Fort Smith will be “very pleased,” but invited city leaders to continue bringing any questions and concerns to Whirlpool concerning remediation.

“We are still responsible, and we should be responsible and continue to be disciplined and active on these issues,” Noel said.

Whirlpool sold the 620,000-square foot warehouse portion of the site to Spartan Logistics in September 2014. The sale included 53 acres and kicked off investment and economic activity at the site. The Phoenix sale, in addition to the manufacturing plant, includes 95 acres. Equipment removal is underway and exterior and interior renovations are planned. Phoenix’s plans for the facility include collaborating with other logistics and distribution enterprises to offer a centrally located hub for several companies, according to a statement from the Fort Smith Regional Chamber of Commerce. The deal is the first for Phoenix in Arkansas.