Former ExxonMobil refinery targeted for cleanup, new business park

Feb. 05--Another sprawling and polluted former industrial site in Buffalo may be destined for a new business park.

Industrial development specialist Krog Corp. is acquiring nearly half of the former ExxonMobil Corp. refinery property on Elk Street along the Buffalo River as part of a plan to clean up the entire property and put it back to use.

The Orchard Park-based company said it has been selected by the oil giant to buy about 40 acres of the 88-acre former refinery and terminal property at 503-635 Elk, in the city's Valley neighborhood. The purchase price was not disclosed.

Krog also has been designated by ExxonMobil to complete the environmental remediation of the entire site under the state's Brownfield Cleanup Program -- including on land already sold to two other companies, One Babcock LLC and Buckeye Terminals LLC.

That's according to a November letter from Krog President Paul R. Neureuter to city officials laying out the developer's intentions. Neureuter declined to comment further, saying it's "premature" and citing a nondisclosure agreement with ExxonMobil.

The letter is included in the company's request this month that the city "abandon" and sell about 0.14 acres of public land under the river to Krog to facilitate the cleanup by enabling the developer to have full access to the site. The request follows a suggestion by consultant Michael Finn and the city's Department of Public Works, according to the letter.

The narrow strip of underwater land has been appraised at $2,050, which is what Krog's Elk Street Commerce LLC agreed to pay, along with covering any taxes, legal costs for the sale or expenses for removing or decommissioning any utilities or other facilities. The Buffalo Common Council will consider the request and recommendation by the Brown administration in favor of the sale when it meets on Tuesday, along with a public hearing.

Meanwhile, Krog's specific future plans for the entire parcel aren't clear, but this could represent the latest example of former industrial land being turned into a vast commercial park. That's what led to both the Buffalo Lakeside Commerce Park and the new Tesla plant at RiverBend, both in South Buffalo and both originally held by the Buffalo Urban Development Corp. And it's also the plan by the Erie County Industrial Development Agency for the former Bethlehem Steel property in Lackawanna.

The first petroleum refining operations began at the 88-acre site on Elk Street in 1880, but the real activity commenced when ExxonMobil predecessor Standard Oil Company of New York purchased most of the site in 1892, according to Neureuter's letter.

The boundaries of the property fluctuated with sales and acquisitions over the years, but the refinery operations continued until May 1981. After that, it remained a distribution terminal that took in oil products through a pipeline and barges until May 2005, Neureuter wrote.

About 11 acres of land on the west side of the property was sold in 1995 to James Panepinto's One Babcock LLC., including parcels on Elk, Orlando and Babcock streets. A decade later, On May 4, 2005, Buckeye Terminals of Emmaus, Pa., bought the active petroleum products storage and distribution terminal portion, totaling 37 acres. It's the remaining 40 acres that Krog will buy, Neureuter added in his letter.

Working under state supervision, Krog now plans to clean up not only its own land but also those of One Babcock and Buckeye, a subsidiary of Houston-based Buckeye Partners LP, which is one of the nation's largest independent liquid petroleum pipeline operators, and also one of the largest independent terminal and storage operators in the country.

More specifically, the project calls for soil stabilization, excavation and off-site disposal of some soil, construction of slurry containment walls, installation of cover and stormwater management systems, and creation of a sealed steel sheet pile bulkhead along the riverfront. It's the latter -- which will prevent contaminants from getting to the river -- that will encroach about four feet into the river, justifying the land sale by the city.

Krog hopes to start work by March.

Separately, ExxonMobil completed a cleanup at 522 and 542 Elk St., across the street from the former refinery site. Those are two former residential parcels, located at adjacent corners of the intersection with Winona Street, and totaling 1.76 acres, according to a state Department of Environmental Conservation document.

The land was historically used for homes, but was contaminated with "heavy end petroleum cracking stock" in 1976 when a tank on the south side of Elk ruptured, according to the DEC. ExxonMobil bought the properties and demolished the structures but only recently got around to the cleanup.

That work included removal and off-site disposal of soil, backfilling with clean soil, and imposition of future restrictions on land and groundwater use at the site that will limit the property to commercial or industrial redevelopment.

The flat, grass-covered land is currently vacant and surrounded by a chain-link fence, and it's bordered by other vacant land and parking lots for a local business. It's now zoned for light-industrial use, but is expected to be changed to commercial, according to the DEC.

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