June 9, 2011 in City

Deal ends raceway deadlock

Court-ordered receiver to pay for toxin removal
By The Spokesman-Review
 

A recent court agreement may lead to a sigh of relief by county commissioners and investors in the former Spokane Raceway Park.

The agreement breaks a stalemate over testing to determine whether the raceway, now owned by the county, has contaminated groundwater.

The issue has prevented aging investors or their heirs from receiving dividends on money they put into the raceway in the 1970s.

Court-ordered receiver Barry Davidson agreed to pay for any required cleanup of toxic trichloroethylene solvent the county found in one of the raceway’s two wells days before the property was to be sold at auction.

Although $1 million of the sale proceeds was set aside for a possible cleanup, Davidson’s commitment is open-ended.

Spokane County commissioners want a “determination from the Department of Ecology and any other necessary governmental agencies that the cleanup (if required) has been achieved” before Davidson pays the investors.

Davidson argued that the set-aside is adequate to cover the environmental obligation, and sought court permission in March to distribute $5 million to “unit holders” in Washington Motorsports Limited Partnership.

The partnership financed Spokane Raceway Park Inc., a closely held corporation that never paid the dividends it promised. The raceway’s former operator, Orville Moe, is now a fugitive. A bench warrant charges him with contempt of court for disobeying a judge’s orders in the Superior Court takeover of his company.

Davidson raised $8.2 million in April 2008 when he sold the raceway property in a court-ordered auction.

County commissioners Todd Mielke and Mark Richard said they wouldn’t have paid $4.3 million for four of 13 parcels, including the speedway itself, if Davidson hadn’t agreed to pay for any required trichloroethylene cleanup.

County tests a few days before the auction found 11.1 parts per billion of trichloroethylene, or TCE, in one of two raceway wells. The state threshold for requiring a cleanup is five parts per billion.

No TCE was found in three shallow test wells that Davidson provided. Nor was it found in a second test of the supposedly contaminated well.

Nevertheless, the Department of Ecology said in April 2010 that three deep test wells should be drilled.

County officials said Davidson balked at the estimated $160,544 cost of drilling the extra wells, but he said that is a “mischaracterization.” Davidson said he wanted court guidance on how the cost should be allocated.

In addition to more wells, the Department of Ecology called for tests to look for other toxins. That is a county responsibility, and the county should help pay for the new test wells, Davidson argued.

The county’s attorney, Chief Civil Deputy Prosecutor Jim Emacio, said the county’s only responsibility is to clean up contaminated soil, which it has done.

The deadlock was broken by a court-approved deal in April.


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