A dispute over a fuel oil cleanup bill at the Holiday Mall redevelopment site in Moorhead has been settled -- about half-way between what the developer and the excavator had asked for in arbitration.
The developer, Moorhead Holiday Associates LLP, will pay the excavator, Mark II of Fosston, Minn., $707,356 for removing contaminated soil from the site in summer 2001.
That's what MHA had offered to pay and approximately half what Mark II had billed the company, said Wayne Bradley, an accountant with Eide Bailly, which represents MHA.
Ultimately, Moorhead taxpayers are on the hook for the bill. The city has an agreement to cover up to $2.5 million worth of contamination cleanup costs through a special tax increment financing district.
And although Moorhead received a $600,000 state grant to reimburse some of those costs, a portion of that money now may also go to MHA.
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Contamination cleanup costs at the site now have risen about $350,000 over the $2.5 million cap. MHA has asked the city to change its agreement with the developer to use the grant money to reimburse MHA for those extra costs, instead of paying down the city's portion.
The Moorhead City Council will consider the request at its meeting Monday.
The cleanup dispute dates to August 2001, when the excavator removed thousands of yards of soil contaminated with fuel oil, which apparently leaked from a reserve tank under the former Holiday Office Park.
The original cleanup estimate from Eide Bailly was about $615,000, but the bill totaled more than twice that amount. More than 22,000 cubic yards of dirt was removed for treatment from the site, according to Mark II co-owner Mark Hagen. But Eide Bailly said survey work showed 10,000 to 14,500 cubic yards were hauled away.
The main focus of the dispute was over how much dirt expands, said Keith Miller of MHA.
"As you remove soil from where it has lain for ages, it expands. So the question became, 'Is Mark II entitled to claim an expansion factor, and, if so, how much?' "
The decision was delayed for more than a year, partially because the two sides couldn't agree on an arbitrator.
Eventually, the two parties selected an Eden Prairie, Minn., judge and attorneys from Fergus Falls and St. Cloud to settle the dispute.
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Readers can reach Forum reporter Joy Anderson at (701) 241-5556
