Council approves funds to remove oil tank

SIOUX CITY — The City Council Monday approved a change order to cover the costs of removing an old oil tank buried near the Pierce warehouse and the subsequent cleanup.

The council voted 4-1 to approve a change order with W.A. Klinger LLC of Sioux City, who is building an underground garage next to the warehouse at 301 Jennings St. Klinger will remove contaminated soil from the ruptured oil tank, along with some other soil that was found to be too wet to hold the concrete.

In their first official council meeting, both new Mayor Mike Hobart and Councilman Aaron Rochester agreed with Councilmen Dave Ferris and Brent Hoffman to approve the $142,624 additional expense. Councilman Jim Rixner cast the no vote. On Oct. 22, the council awarded Klinger the contract to build the parking ramp for $2.4 million.

“There was a heating oil tank on the site,” Rich Mach, the city’s project manager, reported. “There was a former gas station there, but it (the tank) was not part of that station. It’s really old. … He (contractor) hit the tank, causing it to roll over on its side,” causing it to rupture.

Patty Heagel, community development director, said Klinger crews found the tank in late December. Two earlier soil tests did not show there was a tank in the ground.

Rixner asked why the city should pay the cost to remove the soil.

“It’s our ramp on our property,” Heagel answered, prompting Rixner to ask, “We own that underground ramp?”

Heagel replied, “That’s correct. … We acquired the property years ago.”

She reported that the city’s share of the development costs for the entire project will be repaid through money from the developer and tax increment financing payments.

“The reality is all of this will be paid,” she said.

The developer, Bart Connelly of Sioux City, will pay some of the other soil removal costs.

Rixner stated, “Due diligence may have allowed us to find this (the tank). I think this is fully the responsibility of Mr. Connelly.”

Hoffman said, “A true soil testing is always done, but it’s imperfect. They reviewed the plans of what had been there. This type of thing does happen. As much as I might not like it, this is where we are.”

Hobart asked, “Was there any negligence in removing the tank?”

Mach said there was not because the contractor didn’t know the tank was there until he hit it.

Heagel added, “It’s not unusual to run into things (buried) downtown. All due diligence was done in advance. The soil tests were clean.”

Last year, Connelly began transforming the six floors in the building into a mix of office and residential condos. United Commercial, the commercial division of United Real Estate Solutions, is marketing the remaining office and residential space in what is now called the United Center. The upper two floors will house large residential lofts. Connelly bought the former Pierce Moving & Storage building for $1 from the city.

The underground garage will be reserved for tenants. A surface parking lot will be built on top, which will be available to the public.

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