Fort Wayne Councilman Michael Barranda may try to delay big downtown land deal

Michael Barranda

A City Council member says he will try to delay the proposed schedule for buying 29 prime acres just north of downtown unless the administration of Mayor Tom Henry clarifies the liability for removing any industrial contamination — the seriousness of which remains unknown despite an earlier study, according to the proposed agreement between the city and owners of the so-called “North River” property.

Michael Barranda, R-at large, said he will try to delay Tuesday’s planned introduction of the indemnification deal because he fears the language may shield from liability not only current owners Calhoun Investments LLC but also any insurance companies that might otherwise be obligated to pay for any necessary remediation of a site that most recently served as an OmniSource scrap yard.

Barranda, who is an attorney, also wants to know whether any indemnification of insurance companies represents an oversight or an intentional effort by the city to assume all future liability. But spokesman John Perlich said the city has “been in communication with Councilman Barranda last week and this week. Insurance companies are not part of the indemnification (and) are not shielded as part of this.”

City Director of Community Development Greg Leatherman has suggested clean-up will cost in the hundreds of thousands of dollars on the basis of a city-funded $80,000 conducted when the city was considering a purchase a decade ago. But according to the proposed environmental indemnification agreement, “the source, extent or cause of any such contamination is not known to purchaser or seller.” The sale would require the city to “take complete responsibility for the remediation of any contamination.”

The property was listed for sale for $6 million, and the city has agreed to buy the site for about $4.6 million. The discount is in consideration for environmental obligations assumed by the city, the agreement states.

At least four other members of the nine-member council would have to support Barranda’s motion for it to succeed. At least three other members are believed to be concerned about the proposed deal, and President Tom Didier, R-3rd, has said the decision will be difficult.

Council is currently scheduled to discuss and take a preliminary vote on the proposal Nov. 21, with a final vote Nov. 28 and closing on Dec. 1. The timing is crucial, because the city’s purchase agreement expires Nov. 30. The Redevelopment Commission tentatively agreed to accept title to the property Monday, and the Capital Improvement Board is expected to consider funding for the purchase Thursday.

City officials say the property, which has been mentioned as a possible site for a hospital, commercial development and other uses, is crucial to long-range downtown improvement plans.