Lawsuit: Radioactive slag at affordable housing project

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A developer claims subcontractors used radioactive slag as construction fill at an affordable housing project just north of Buffalo’s medical campus.

Now the developer wants the subcontractors, and the company that sold them the contaminated material, to pay $1.6 million for the cleanup, and other costs.

The allegations were made in a lawsuit filed last week in federal court by the Buffalo-based McGuire PV Holdings, LLC. The company is in the midst of a years-long effort to revitalize the Pilgrim Village affordable housing complex, located between Michigan Avenue and Ellicott Street, across the street from Gates Vascular Institute.

McGuire claims its subcontractors bought contaminated soil from Sonwil Distribution Center to use as construction fill. 

The soil, which the lawsuit says contained radioactive byproducts from steel manufacturing, came from Sonwil’s facility alongside the former Union Ship Canal in South Buffalo.

The material was used to fill the basements of five buildings demolished in 2015, according to the complaint, before a legal battle between McGuire and a partner stalled the project for several years. 

The contaminated fill was discovered in 2019, after the ownership dispute was settled through litigation and McGuire was preparing to restart the project. 

The material has since been removed, according to the lawsuit. 

In addition to two McGuire companies that control the Pilgrim Village redevelopment, the plaintiffs include the project’s general contractor, RP Oak Hill, and Empire Building Diagnostics, the demolition company that began site preparation work in 2015, before the project stalled.

The defendants are Sonwil and a related company, 315 Ship Canal Parkway LLC, as well as two subcontractors involved in procuring and delivering the material: Site Specialties and Proline Concrete of WNY.

The plaintiffs are represented by Kenneth Krajewski of the law firm Pillinger Miller Tarallo. Krajewski declined to comment for this story, instead referring a reporter to the complaint filed last Friday. 

Investigative Post sought comment from the defendant companies by phone and email but received no response. Summonses alerting the defendants of the lawsuit were issued Monday, according to court records.

“Not suitable for use at the Project”

McGuire claims Sonwil sold the material in 2015 to Site Specialties, located in East Aurora, which the lawsuit describes as “a broker of materials … used as backfill.” A purchase agreement indicates Sonwil charged Site Specialties $5.25 per cubic yard. 

Site Specialties provided the material to Proline Concrete, of Eden, which in turn provided it to Empire. The demolition contractor used the fill at Pilgrim Village in November 2015. 

Early in 2019, with the project back on track, McGuire hired an environmental consultant to help pursue brownfield redevelopment tax credits from the state. 

The consultant, C&S Companies, installed test wells on the property. It recommended testing the material used to fill in the basements after “observing that the backfill appeared to be made primarily of ‘slag,” which the developer’s attorneys defined as “a waste product of smelting or refining metal ores.”

“The tests confirmed that the backfill material … contained technologically enhanced naturally occurring radioactive material,” also known by the acronym TENORM, according to the lawsuit. 

“Because of its radiological content, this material was not suitable for use at the Project.”

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The U.S. Environmental Protection Agency defines TENORM as “radioactive materials that have been concentrated or exposed to the accessible environment as a result of human activities.” 

Exposure to the low-level radiation typical of TENORM found in steel-making slag “does not cause immediate health effects,” according to the EPA, “but can cause a small increase in the risk of cancer over a lifetime.” 

Sonwil, which operates refrigerated warehouses nationwide, occupies 52 acres of the sprawling Buffalo Lakeside Commerce Park, located along the former Union Ship Canal between Tifft Street and Ridge Road along Fuhrmann Boulevard. The cleanup and redevelopment of the former steel mill property began two decades ago and continues to this day, under the auspices of the Buffalo Urban Development Corp., a city agency.

The remediation included excavation of soil contaminated by decades of steel-making and its waste products, which can include radioactive metals. 

In 2010, the state Department of Environmental Conservation granted Sonwil a “beneficial use determination” permitting the company to sell or reuse the contaminated material — but only for certain purposes. Sonwil’s steel slag was suitable for use  as “asphalt aggregate, railroad ballast, road and parking lot base, anti-skid material and Portland cement additive,” according to a letter from the DEC to Sonwil. The material was not deemed suitable for use as construction fill.

Once McGuire had identified the radioactive slag, the company shared the test results with the DEC, according to the lawsuit. The developer then hired yet another environmental consultant to develop a cleanup plan in consultation with DEC. 

The cleanup of the contaminated fill began in October 2022 and was completed in May.

The DEC’s Buffalo office would not provide the test results for the contaminated fill when Investigative Post asked for them, instructing a reporter to file a Freedom of Information request for the documents.

Asked whether the DEC tracks the sales and end uses of materials subject to a beneficial use determination, a spokesperson said the agency requires an annual report that includes the quantity of material used.

Sonwil’s beneficial use determination expired in May 2018, the spokesperson said.

Hefty subsidies for project

The federal Superfund Act, adopted in 1980 in response to the Love Canal disaster, assigns liability for cleanup costs to any person or company involved in the creation or subsequent mishandling of hazardous substances.

The lawsuit contends the defendants “acted negligently” — Sonwil by selling the material for an unapproved use, and the other companies by using it inappropriately.

The plaintiffs are seeking $1.6 million for the cost of the cleanup thus far, as well as “any future cleanup and remedial costs.” They also want  to be compensated for “the diminution of the value of the Project” and attorney’s fees.

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To date, the cleanup and affordable housing components of the Pilgrim Village project have yielded large subsidies for the developers. Under the state’s brownfield remediation program, developers are eligible for tax credits worth three times their cleanup costs.

Subsidies total $68.3 million for the $93 million project. They include:

• $40 million in federal low-income housing tax credits.
• $14.3 million from New York State Division of Homes and Community Renewal.
• $9.8 million in brownfield cleanup tax credits.
• $9.1 million in tax-exempt state bonds.
• $948,000 from the New York State Energy Research and Development Authority’s New Construction-Housing Program.

The housing complex includes two components: Pilgrim Village Family, which will have 132 apartments, and Pilgrim Village Senior, which will have 105.

According to a July 2022 press release from Gov. Kathy Hochul, all of the units will be rented to tenants making 60 percent or less of the area median income. For a single person that’s $39,000 per year and for a family of four that’s $55,680. Eighty-nine of the units will be eligible for Section 8 rental assistance vouchers.

Geoff Kelly