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:
Column:
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,
2006.

"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."

christopher.baxter@mcall.com

610-778-2283

HISTORY OF VIOLATIONS

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