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The Morning Call Archives Copyright © 2009 The Morning Call

ID: 4460115 Publication Date: October 18, 2009 Day: Sunday Page: A1 Edition: FIRST Section: News Type: Local Dateline:


Length: long

Byline: By Christopher Baxter OF THE MORNING CALL

Headline: Business as usual, even without permit **DEP allowed Upper Nazareth plant to operate despite environmental violations.

Each night, Elizabeth Miller steps outside her Upper Nazareth Township home to feed her three horses. But instead of a clear, refreshing country evening, Miller says, she occasionally sees a mist rising in the air and smells a stifling odor.

The source of the smell is unclear, but Miller says it comes from the sprawling set of buildings just beyond her cornfield, where a steel coating plant has operated for years under two companies despite repeated violations of state environmental regulations.

"The smell, especially at night, can take your breath away," said Miller, sitting at her kitchen table recently with her husband, Roger. "We've always asked each other, "How can they get away with this?"'

None of the plant's violations have noted off-site odors. But since 2001, two privately owned companies -- Steel Management Systems and Encor Coatings -- have operated the plant and violated dozens of other regulations created to keep the community safe from hazardous pollutants, a Morning Call review of state environmental records shows.

Perhaps most troubling, environmental advocates say, is that the Pennsylvania Department of Environmental Protection allowed the plant -

- designated as a "high priority" violator -- to continue to do business for more than three years without a valid operating permit.

The permit, a legally required document that allows state and federal officials to track and limit air pollution, became invalid when Steel Management Systems took over in August 2005 and was not renewed by the DEP until April of this year, according to a DEP timeline.

"It's a definite hole in the system, and it can lead to problems," said Nathan Willcox, a clean air advocate with PennEnvironment, a statewide advocacy group. "We've seen it before. It's just another indication of, across the board, we need to enforce the clean air laws on the books."

The DEP timeline, included in a memo issued last month, also traces eight years of stop-and-go enforcement by the department that failed to bring the plant or either company into compliance. SMS did not return several messages left during the past two weeks seeking comment.

On May 8, the DEP cited SMS for sending 12 tons of xylene -- a hazardous pollutant that can cause respiratory and other health problems - - into the air in 2008. The amount released was 2 tons more than allowed by annual DEP limits.

Five months before the xylene notice, the DEP cited SMS for 24 violations of waste rules. The documents, dated Dec. 12, 2008, note the company kept open drums of unknown contents at the site and illegally burned unidentified piles of waste.

"Specifically, a pile of ash surrounded by 10 barrels containing ash … was observed," the DEP wrote. "The ash contained waste including, but not limited to, springs, nails, metal pieces, soda cans and rubber gloves."

About the time SMS took over the plant in 2005, its predecessor, Encor, still owed nearly $13,000 in overdue annual pollution fees dating to 1994, despite DEP efforts to collect the money and pursue bounced checks, according to the DEP timeline.

The DEP decided not to press SMS for Encor's balance, according to a department memo dated Sept. 22. The agency instead will pursue SMS for the xylene and permit violations but has not yet assessed any penalties, the memo states. Many of the waste rules violations also remain unresolved.

But the plant's history of noncompliance stretches back even further, documents show. Between 2001 and 2005, the DEP sent five letters to Encor about failures to submit emissions records and annual compliance

certifications, the timeline notes.

"Encor has not shown any attempt to comply with the department's rules and regulations," according to a DEP advisory issued sometime between September 2005 and February 2006. The advisory states the DEP intended

to revoke the company's operating permit, which expired soon thereafter.

The DEP declined requests for interviews. Mark Carmon, regional spokesman for the agency, cited an "internal evaluation" of the company's compliance history and ongoing discussions with DEP attorneys concerning future enforcement.

The federal Environmental Protection Agency has not been involved at the plant, according to online enforcement records.

Upper Nazareth officials said they were generally unaware of the situation with SMS. Secretary Treasurer Jeri Kronstadt said she had seen notices from the DEP come into the township, but was unsure whether any of the notices referenced SMS or Encor.

Supervisor Willard Mohn said he thought he had seen notices but was unsure. Supervisors Andrew Donello, James Fahr and Michael Rinker did not return messages seeking comment. Supervisor Chairman Joseph Emrick could not be reached.

Teresa Candori, spokeswoman for the DEP, said municipalities are not always notified of companies' violations.

SMS and Encor

The Millers moved into their home in 1999. They keep the horses and some chickens on a 16-acre plot, which includes a small gift and flower shop Elizabeth runs.

Roger Miller worked for 20 years for the former Hercules Cement Co., now Buzzi Unicem USA, in Stockertown, where he dealt with scores of regulations with the DEP. He said his experience made him wonder how the plant just south of his home could not attract more attention.

Encor Coatings and its parent company, Corban Corp., were created in 1989 and began operating the plant at 3045 Bath Pike the same year, according to state corporation and Northampton County property records. The company applies corrosive-resistant coatings to steel for pilings and bridges.

A 2001 county court order lists Edward G. Gleason as CEO of Corban,

Edward W. Gleason as president and William R. Condosta as vice president.

Steel Management Systems began operating the plant in 2005, the DEP timeline states, and online corporation records list Condosta, 40, of Bethlehem as president. The property was purchased in 2006 by New York-based S Park Holdings, county records state.

Still, Condosta's relationship with both companies remains unclear. The May 28 DEP memo states Condosta told the DEP that month that he was only an employee of Encor, and that he is a consultant for SMS, despite providing a business card to the department that same month that identified him as vice president.

Furthermore, a permit application received by the DEP on Oct. 28, 2008, lists Condosta as well as Edward G. Gleason and Michael Thierer Jr. as people with overall management responsibility for the plant. The application also lists Gleason as the sole general partner for SMS and was signed by Gleason as president of SMS.

A man who answered the phone Oct. 8 at SMS said Condosta was not in

his office. Condosta did not respond to calls, e-mails and faxes seeking explanations for the DEP violations. A woman who answered the phone Thursday said Condosta and Gleason were not in the office. They did not respond to messages left by phone and fax.

Encor's problems began with finances. The company filed for Chapter 11 bankruptcy in 1992, and emerged two years later with a new outlook. In a statement issued then, Gleason said, "We have learned to better manage our business while in Chapter 11."

The DEP first inspected Encor for air quality issues in September 1997 and noted that the company had no permits or plan approvals, according

to the timeline. The department requested the company submit the proper

paperwork, the timeline notes.

Encor applied for its operating permit a year later, and the DEP issued the five-year certification on March 1, 2001. That same year, state environmental officials cited the company for failing to maintain pollution emissions and other records.

Within three weeks, the company said the problems had been fixed, the DEP's timeline of enforcement states. But a follow-up inspection a few months later revealed otherwise -- nothing had changed, the document notes.

As a result, Encor agreed to pay $22,324 in outstanding fees and fines for the violations, as well as for unpaid emissions fees from 1994 to 1999, a May 8, 2006, DEP notice and the timeline detail.

"There's an assumption that the company will do right, so you try to get them back in compliance rather than take strong action," said Joe Minott, an attorney for the Clean Air Council, an environmental advocacy group. "That's always been DEP's preferred approach."

Between 2002 and January 2006, Encor failed to pay $12,883 owed under the agreement, the DEP timeline notes. In a letter from Condosta dated May 3, 2005, he said the person in charge of permitting for the company had abruptly left and that payments would be made promptly.

But the $12,883 balance was never paid.

Not following through

Between September 2005 and February 2006, the DEP made its strongest enforcement move to date to bring Encor into compliance. The department issued an advisory stating it intended to pursue Encor's unpaid fees in court and to revoke the company's operating permit.

The permit is required by the federal Clean Air Act to release any significant amount of pollution within guidelines. Without it, facilities potentially evade monitoring and bypass reporting emissions to the community and government.

But the DEP documents make no reference to a revocation. The timeline

instead notes that Encor's operating permit naturally expired Feb. 28,


"It sounds like DEP was saying the right things but may not have been following through," Minott said.

The DEP notified Encor days later that its permit had expired.

"The company has existing and continuing violations and demonstrates a lack of intention to comply" with air pollution regulations, the March 2, 2006, letter said. The notice went on to state that the department would not have renewed Encor's operating permit, even if an application had been submitted on time.

But as Encor faded from the picture, SMS continued operations at the plant without a permit from when the company took over in August 2005 until April 2009, according to the October 2008 DEP notice citing the

company for the permit violation.

SMS was labeled a "high priority" violator for that violation and again later for the xylene violation, online state enforcement records indicate. State and federal environmental officials identify high priority violators as those companies with the most important violations.

After receiving the October notice, SMS submitted a permit application to the DEP. The department approved the application six months later. The DEP declined to comment on the reasoning behind its approval.

Furthermore, during a May 19 meeting, Condosta stated SMS was a different company and "they would like to move forward and not dwell on the past," according to the May 28 DEP memo. The document states SMS was not prepared to address any outstanding issues the department had with Encor, including overdue payments.

Four months after the meeting, the DEP decided not to pursue the $12,883 owed by Encor, according to a memo issued last month.

"Sometimes an agency agrees to waive some portion of the fines in exchange for the company cleaning up its facility or paying the bulk of its fees," said Willcox, of PennEnvironment. "If that's the case here, it would be less egregious."

The DEP's Candori declined to comment on the decision not to pursue the fees, but said that incorporating as a new entity was not a way out of penalties.

Enforcement action for many of the latest violations is pending, according to DEP documents.

Rep. Richard Grucela, D-Northampton, said situations "sometimes get tough" for DEP, but added that SMS was a "black mark on its own business community."

"They should be following the law and paying the fines like everyone else," he said.

Even if the DEP does take action, residents question why it has taken the agency this long to pay close attention to a neighbor they call a nuisance.

"The DEP doesn't seem to come up here too much, and they're very slow," said Shirley Shenewolf, who lives a few houses down from the Millers. "My husband is on oxygen, and sometimes he can't go outside because of

the smell. It's like living with this odor of burning paint."



Steel Management Systems and its predecessor, Encor Coatings, of Upper Nazareth Township have faced dozens of environmental violations since 2006, and many remain unresolved, state officials say. April 2009 -- SMS cited for exceeding 2008 annual emissions limit for xylene, a hazardous air pollutant; high priority violator*.

December 2008 -- SMS cited for 24 violations of solid waste, hazardous waste and residual waste regulations, including records keeping, improper waste storage and burning solid waste without a permit.

October 2008 -- SMS cited for operating for more than three years without a a valid air pollution control permit; high priority violator.

May 2006 -- Encor cited for failure to pay four years of emissions fees, for not complying with a previous enforcement agreement with the DEP, for not submitting an annual emissions report and for not submitting an annual compliance report.

March 2006 -- Encor cited for four violations of solid waste and residual waste rules and regulations, including improper storage and dumping of wastes.

* State and federal environmental officials identify high priority violators as those companies with the most critical violations.

Source: Department of Environmental Protection