Insurer to Pay Final $800K for Toxic Cleanup of Tacoma Tide Flats

August 13, 2009

The Washington Department of Ecology is receiving $800,000 from a settlement agreement, which will be used to advance cleanup of the former Lilyblad Petroleum site on the Tacoma tide flats.

Ecology is one of three parties receiving money from the settlement with Lilyblad’s insurance company. Court documents show Old Republic Insurance Co.issued excess liability policies to Lilyblad. The agreement ends the insurance company’s financial ties to the cleanup. It also settles an Ecology penalty issued by the Hazardous Waste and Toxic Reduction Program before the site was referred to cleanup.

However, the settlement doesn’t affect the ongoing cleanup liability of the responsible parties that have been identified to date through the state’s toxic cleanup law. Those parties will remain legally responsible for paying cleanup costs above and beyond this $800,000 settlement.

“The settlement provides Ecology a significant portion of the money it will need to complete cleanup at the site,” said Ecology’s Carol Kraege. “We’ll be able to move ahead with cleanup which is important because the responsible parties weren’t getting the job done.”

Lilyblad began operations in 1972 at 2244 Port of Tacoma Road as a petroleum product distributor and hazardous materials storage, treatment and recycling facility. From 1983 to 1988, Lilyblad partnered with Sol-Pro to recycle and reclaim solvents. Their operations led to groundwater and soil contamination, which also extended onto parts of neighboring properties.

Lilyblad and Sol-Pro signed a binding cleanup agreement with Ecology in 1995. Several interim actions to address contamination were taken, but extensive work to complete the cleanup remains. Seeing a lack of progress, Ecology took over the cleanup in 2007.

The insurance policies taken out by Lilyblad’s owners to pay for toxic cleanup were nearly exhausted when the insurance company requested a federal court to resolve competing claims to the remaining insurance funds. Through negotiations, Ecology was able to secure an $800,000 payout. Ecology has been using its own funding to conduct the cleanup since taking over the site. Kraege says the $800,000 will help fund the next two years of cleanup.

State law requires property owners and those who contributed to the contamination to pay the costs of cleanup.

In 2003, Lilyblad sold its assets and operations to Pacific Functional Fluids. M&G Holdings currently owns the property. Lilyblad is no longer in business.

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