Who would believe that a building owner would be compelled to stand outside his own property in a hazmat suit in order to get a modicum of justice from the very company that poisoned it and wiped out its value?

The answer lies in a story of contamination and contracts, of banks and courts, and of the building that ultimately slipped from its owner’s control.

The cast of characters:

• A dry-cleaning business owner/ tenant

• A building owner/lessor

• A successor dry-cleaning operator

• A bank that financed $400,000 in improvements

• A county collecting property taxes

• And a buyer willing to pay $1 million, who placed $10,000 in escrow

This chapter is how those pieces collided.

In 1996, the building owner leased 2,400 square feet of space to a well-established, financially stable dry-cleaning business, one of many in their portfolio. The rent terms were very favorable, and the operation ran steadily for the next decade. In April 2006, the business was sold to a new operator, with part of the purchase price paid in cash and the remainder financed through a substantial promissory note carried by the seller.

That same year, the building owner’s mortgage reached maturity. As a condition of renewal, the bank required an environmental assessment of the property.

Completed in June 2006, the assessment revealed that the soil beneath and surrounding the building was contaminated with PERC, the solvent used in the dry-cleaning process with a known association to cancer. In some locations, PERC was detected as deep as sixteen feet below the surface.

Upon receiving the report, the bank invoked a clause in the mortgage agreement providing that if contamination were discovered and could not be fully remediated to pristine, zero-contamination standards, the bank could seize all rental income generated by the property. The bank then notified the tenants that rent payments were to be made directly to the bank.

The building owner was left with a contaminated property and no rental income to maintain it or to pay annual property taxes of approximately $25,000. Under these changed circumstances, the pending sale of the building was rescinded.

The original dry-cleaning owners claimed that the contamination may have been caused by the new owners to whom they sold the business. The assertion strained credibility. There was no realistic way that the extensive contamination later documented could have accumulated during the brief two-month period between the sale and the environmental assessment that uncovered it.

The former owners would agree to remediate the property only to the minimum standards required by the State of Michigan, and only if the building owner agreed to waive any right to sue them for the damage and negligence involved.

The building owner was seeking to be made whole. One potential solution was for the polluter to purchase the building at or near the price that had been offered and placed in escrow before the contamination was discovered. For a time, matters appeared to be moving in that direction, but the dry-cleaning owner ultimately reneged. After the contamination discovery, the property’s market value had collapsed—from one million dollars to $500,000. That is why the lawsuit became so important — to obtain a civil judgment in a court of law against the polluter, who had the financial means to satisfy a judgment and make the owner whole.

Negotiations stalled and the dispute reached an impasse.

With little cash flow to sustain operations, property taxes went unpaid for years. Ultimately, the county moved to seize the building and sell it at auction to recover the taxes owed.

Enter the hazmat suit.

As the county’s seizure of the building drew near, the owner put on a hazmat suit and took up his protest in front of the property, warning passersby that the site was contaminated with PERC, a chemical associated with cancer. He stood near the dry-cleaning business without blocking access, but the implication was clear.

The protest immediately threatened the business’s viability. The dry cleaner hired an attorney and obtained a temporary restraining order. When it was served, the protest stopped.

A few weeks later, the restraining-order hearing was held, and the judge ruled that barring the owner from protesting in front of his building would violate his First Amendment right to free speech. The next day, the building owner was back out front, hazmat suit on.

The protest did more than disrupt the day-to-day operations of the dry-cleaning business—it jeopardized the owners’ ability to service the note they still owed to the prior owners and of course the prior owners’ ability to collect. The same former owners who refused to fund environmental remediation of the soil beneath and around the building unless the owner first agreed to waive the right to sue.

Their attorneys met with the building owner’s attorneys for an eleven-hour standoff on the thirty-seventh floor of the Renaissance Building in downtown Detroit.

A final agreement was reached under which the former dry-cleaning business owners paid the building owner a fraction of what was lost in value in exchange for his agreement to cease all protest activity, refrain from disclosing the existence of contamination, and waive any right to pursue legal action against them.

A $250 purchase of a hazmat suit ultimately led to that settlement. Without it, the owner would have had no practical leverage—no realistic path to recovery other than pursuing a prohibitively expensive environmental lawsuit for which he lacked the resources.

The building’s owner—who would later document these events in Grosse Pointe and Beyond, An Unexpected Life: A Family Chronicle ultimately lost the property to the county. The total loss amounted to $600,000, reflecting a failed $1 million sale reduced by outstanding obligations at the time, including loan payoffs, property taxes, and other expenses totaling  $400,000.

One of the hard-earned lessons of this story is this: leasing property to a business associated with toxic substances is a mistake—no matter how attractive the rent or how solid the tenant’s finances may seem at the time. That mistake caused a loss of $600,000 and without the funds that were forthcoming from the sale caused the building owner and his wife to lose all their properties in Kauai and northern California. Some of the sale proceeds were to be shared with his siblings and they lost out too.

Footnote:

One final truth belongs to this story. A brother with deep financial resources, and with full knowledge of the circumstances, stood by and watched the damage unfold, choosing inaction. His assistance might well have led to a different outcome—most notably by pursuing legal action to force an equitable resolution to the egregious despoiling of an otherwise sound property. The original dry-cleaning owners were aware of the author’s financial vulnerability and his inability to adequately pursue a legal remedy and used it to their advantage.

It’s the author’s belief, this inaction was not indifference but intention—rooted in a lifelong conflict with our father and a resentment of the success he achieved. That success included the shrewd purchase of the property itself, which, at the time, produced a remarkably strong net rental income relative to its purchase price. For the author, the refusal to intervene felt like a way to strike our father beyond the grave. 

Follow up chapters — 

Cronyism & Corruption at Grosse Pointe Park City Hall 

“Sitting on Tens of Millions”, Brotherly Love — The 71 Dollar Send Off at 95 Lakeshore to Fight a Corporate Polluter with Deep Pockets