Hotel Indigo, Brownfield Authority Speak Out

Amidst reports that heightened levels of cyanide have been detected on the site of the planned Hotel Indigo – with traces likely seeping in the West Grand Traverse Bay – The Ticker sat down to get answers from Jean Derenzy, who leads the Grand Traverse County Brownfield Redevelopment Authority, and developer Jeff Schmitz, whose company is building Hotel Indigo.

Ticker: When did you first discover cyanide underground on-site where the former Midas shop was and Hotel Indigo will be?
Derenzy: In November 2010 an environmental investigation report from the Brownfield Authority under the Environmental Protection Agency (EPA) Assessment Grant identified the presence of cyanide in the soil and groundwater at this Midas property.

Ticker: And what changed since then?
Derenzy: Hotel Indigo notified us [Brownfield Authority] a few weeks back of higher concentrations of cyanide in the groundwater they’ve discovered during their dewatering efforts required for construction of the project.

Ticker: So where does everything go from here?
Derenzy: Well, we’ve already identified that this contamination is migrating onto Jeff’s [Indigo] property. I don’t want there to be a misunderstanding; the cyanide is not coming from the hotel site but coming onto the property from another site, and going underneath the property.

As soon as the Brownfield Authority learned of the heightened levels, we completed some assessments to determine the source area or areas. So right now we are awaiting the results of the investigation, which we expect in August. That report will tell us the possible sources and a remediation plan, which has been the goal of the Brownfield Authority all along, and we will go about improving the water quality of the Bay if in fact that is necessary.

Ticker: How will the public learn about those results?
Derenzy: The information will be first released to the Brownfield Authority at their meeting, and then we’ll be going out and making sure the public is aware. We’ll plan some community outreach meetings this fall to inform and discuss next steps.

Ticker: Jeff, what does all this do to your construction and opening timeline?
Schmitz: We’ll likely open in the summer, and not the spring as planned. We’ve lost a minimum of 45 days if not more. But we’re doing all we can.

Ticker: What’s happening on-site now in terms of hotel construction?
Schmitz: We are forming our foundations, and we are dewatering 24 hours a day, treating that water before it goes into the sanitary sewer system. We’re putting the liner in -- basically building a giant bathtub -- to keep contaminated water away from our property. I’m up on the site about once a week checking in on progress.

Ticker: Does it feel like your project is taking heat for something you’re not responsible for causing?
Schmitz: It does. I was shocked with the spin we’ve gotten from some of the local press. I’ve spent at least a quarter of a million dollars in engineering and environmental consultants to ensure we’re following the correct protocols and cleaning up the site as required. We’ve dug twenty feet into the ground with inch and a half diameter devices gathering samples from contamination from a hundred years ago. We’re just trying to do our best to clean it up and move forward.

Derenzy: He’s responsible for protecting his building and the environmental conditions on his site. He can’t solve problems offsite. We knew there was contamination from the beginning and we knew it wasn’t coming from his site. It’s a tremendous amount of risk and not many developers would be able to take that risk.

Ticker: Is this still a great investment, given all that’s happened along the way?
Schmitz: It’s going to be fine. I’m not so sure it was ever a great investment. You learn to try to control your emotions, and the first thing you do is try to mitigate your costs and risks. Here we were unable to mitigate our risks, but it’s still a good project, yes.

The Hotel Indigo will consist of 105 rooms, conference facilities, a health spa, pool, restaurant, lounges (including a rooftop lounge) and 79 underground parking spaces. The $15 million project is financed locally by Traverse City State Bank and MBank and includes substantial environmental remediation that is being financed in part by the Grand Traverse County Brownfield Redevelopment Authority's Local Site Remediation Fund and U.S. Environmental Protection Agency-funded revolving loan fund.