Development/Redevelopment and Environment and Real Estate & Retail

Chrysler plant redevelopment might be slowed by lien

June 25, 2007

An Indianapolis firm that helped haul away the demolished DaimlerChrysler Corp. foundry last year has placed a mechanic's lien on the automaker's property, potentially complicating the sale of the 34 acres already challenged by environmental issues.

Terra Ltd., an environmental management company, alleges Detroit-based Adamo Demolition Co. owes it $494,359 in unpaid bills for site work and hauling of debris from the once-massive 756,000-square-foot facility.

Terra's lawsuit filed last month in U.S. District Court in Indianapolis also names DaimlerChrysler as a defendant and seeks additional-but-unspecified damages.

"It's unfortunate, because I have no beef against Chrysler," said Tom McCullough, president of Terra, at 450 E. 96th St.

The eight-employee environmental management firm handles non-hazardous, industrial and special wastes. Its previous projects include site preparation for Conseco Fieldhouse and for Lucas Oil Stadium.

More than 10,000 tons of industrial waste was hauled from the foundry site, according to Terra, which began work at the 1100 S. Tibbs Ave. site last August under a subcontract with Adamo.

Terra's loss on the DaimlerChrysler project "is a lot of money and it is affecting us--not only us, but subcontractors we use," such as trucking firms, McCullough said.

"We've been in business for 10 years and we've never been through anything like this," he added.

Adamo had not yet filed its response. But the company said in a statement that it "is confident that its position is consistent with the terms and conditions" of its April 2006 contract. "Adamo has successfully completed hundreds of demolition projects throughout the country."

They include the interior demolition of the former General Motors Corp. world headquarters.

A DaimlerChrysler spokesman said the automaker had not yet reviewed Terra's filing and could not comment.

DaimlerChrysler in 2005 listed its foundry property with the Indianapolis office of Chicago commercial real estate firm UGL Equis Corp. Back then, it was asking $3.6 million for 34 acres of the 52-acre site--$2.1 million for the contiguous 24 acres on which the foundry and former Indianapolis landmark once sat.

Previously, Equis broker Michael Cook said there had been a "phenomenal" amount of interest in the site, which is on the south side of Interstate 70 just east of the Holt Road exit.

Reuse for bulk distribution or logistics appeared especially promising, the broker said at the time. Other local brokers said Marion County could use another large, heavy industrial site.

Equis officials didn't return phone calls. The for-sale sign at the site is no longer there, although it couldn't be confirmed whether a sale is pending. Some development officials said they've heard a manufacturer is interested in at least part of the site.

Unless Terra gets its money before the sale, the lien would have to be satisfied before the property is sold.

The Terra claim on the property is probably minor, however, compared to any environmental issues that tend to haunt a decades-old industrial site, said Jeff Gearhart, executive director of the West Indianapolis Development Corp.

"That would be, to me, a bigger issue," Gearhart said. "That's my gut."

He and McCullough said they believe the original concrete slab of the site is still in place. Environmental surprises could lurk once it's moved, they said.

The foundry DaimlerChrysler had used since 1950 has been cited over the years by the Indiana Department of Environmental Management for groundwater contamination and other issues.

A report by graduate students at Indiana University's School of Public and Environmental Affairs tracked a number of spills at the site, including 500 gallons of fuel oil in the mid-1990s.

The report also cites IDEM records showing high levels of lead and cadmium contamination in soils--and in one of the lakes at the property near Big Eagle Creek.

DaimlerChrysler closed the foundry in 2005, putting the last of nearly 900 plant employees out of work. It made iron blocks for a number of Chrysler and Jeep 6- and 8-cylinder engines.

In 1996, the automaker spent more than $200 million in upgrades at the plant, but seven years later said it intended to close it within four years.

Chrysler built the plant in 1949, soon after buying American Foundry--one of Indianapolis' oldest companies. Founded in the 1890s, American Foundry used to make engine blocks and heads for such automakers as Marmon, Stutz and Maxwell-Chalmers.

In 1925, Walter P. Chrysler reorganized the ailing Maxwell-Chalmers into Chrysler Corp.

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