For months, Massachusetts Governor, Charlie Baker and Boston Mayor Martin Walsh romanced General Electric, offering millions in tax breaks for the company to move roughly 800 high-paying jobs to Boston from its current Fairfield, Connecticut headquarters.
In January, General Electric announced its choice. Forty potential locations that GE had been considering were vanquished by Boston. Mayor Walsh, a Democrat, and Governor Baker, a Republican, had put aside partisan differences and worked closely together to land the corporate titan.
When GE announced its choice, Boston Mayor Martin Walsh crowed, “We won the powerball today here in Boston by having GE come here.”
“This is a huge win for the city of Boston, a huge win for Massachusetts and the indirect, direct spillover from this will be felt by this economy and this community for years to come,” said Governor Baker.
But in the western Massachusetts cities of Lenox, Lee, Pittsfield, and Great Barrington, GE is less popular, and the move is less thrilling.
Since the mid-1990s, GE has been subject to state and EPA orders to clean up polychlorinated biphenyl (PCB) contamination in the Housatonic. More than 20 years later, the company is vigorously opposing EPA’s cleanup remedy for the “Rest-of-the-River” stretch.
Many in the environmental community fear that GE’s new proximity to state policy makers may result in a less protective cleanup. Or, worse, they fear that an informal understanding of some kind may already have been reached during discussions of the move.
EPA’s Cleanup Plan Takes a Middle Ground
For 45 years, GE dumped PCBs from its Pittsfield manufacturing plant into the Housatonic. Banned in 1979 by EPA, PCBs cause a variety of adverse effects on the immune, reproductive, and neurological systems of humans and animals. According to EPA, PCBs are carcinogenic in animals; in humans, they are “probably” carcinogenic.
The Housatonic, which rises in the Berkshire Mountains, flows through western Massachusetts and Connecticut, and eventually runs into Long Island Sound, has long been treasured by sport fishermen, boaters, and other recreational users. Now, signs posted along the banks say: “WARNING, Housatonic River fish and waterfowl are contaminated with PCBs. DO NOT EAT fish, frogs, turtles, wood ducks or mallard ducks from this river.”
Biologists, such as EPA consultant, John Lortie, have found that bald eagles living along the Housatonic are no longer able to breed successfully, and the populations of mink and otter, which are especially vulnerable to PCB toxicity, are smaller than in comparable environments.
A consent decree negotiated between EPA and GE divided the Housatonic into three segments for cleanup purposes. By 2008, GE had completed the PCB cleanup at its Pittsfield plant and the first two miles of the river.
On September 30, EPA released its cleanup plan for the last third of the cleanup, “the Rest of the River. The EPA plan will modify the company’s permit under the Resource Conservation and Recovery Act, which allows it to handle hazardous waste. The permit modification will require the company to undertake a “corrective action” or cleanup.
With Goldilocks symmetry, environmentalists thought the Rest of the River remedy was too weak; GE thought it was too stringent. And for EPA, it was just right.
Although several localities and environmental groups had urged EPA to require a total cleanup of all PCB-contaminated soils, EPA is requiring GE to implement a partial cleanup, leaving 50 milligrams of PCBs per kilogram of soil in many areas.
In fact, the Massachusetts Department of Environmental Protection estimates that about 75 per cent of the PCBs will remain in the river soil and sediments, with only about 25 percent actually dredged and removed.
GE Battles For Local Disposal of PCB-Contaminated Soils
Despite having received what many thought was “cleanup lite,” GE blasted the cleanup plan as too expensive and stringent in a January 19, 2016 statement to EPA. The company’s main complaints are:
First, EPA has required that it dispose of contaminated soils and sediment by transporting them out-of-state by rail, rather than disposing on-site in Berkshire County. The company’s first choice for on-site disposal is a sand and gravel quarry owned by Lane Construction near Woods Pond in Lenox Dale. It has also proposed disposal in Great Barrington on the banks of Rising Pond, where it has acquired land, and at a third location near Lee on Forest Street, along a stream that feeds the Housatonic River.
Second, the company protests that it must remove too much sediment. In particular, it complains that removing 340,000 cubic yards of sediment from the heavily contaminated Woods Pond is excessive, and that only 44,000 cubic yards need to be removed, with cost savings of $130 million for GE.
Third, GE objects to the requirements imposed by EPA for long-term monitoring and maintenance of the Rest of the River stretch.
“The [EPA] decision’s requirement that GE dispose of over one million cubic yards of sediment and soil from the Rest of the River out-of-state cannot be reconciled with the Rest of River remedy selection criteria…and will cost about a quarter of a billion dollars more than on-site disposal,” said Ann Klee, GE’s Vice-President for Global Operations, Environment, Health & Safety.
How the company will transport the waste by rail if it eventually loses this fight is not clear. The Housatonic Railroad was purchased by Massachusetts in February 2015, but will be maintained by the Housatonic Railroad Company until the Massachusetts Department of Transportation takes over. The Housatonic Railroad has a perpetual freight easement and uses the tracks for freight transport about once a day.
“GE might work on upgrading the Housatonic Railroad tracks, but only about five miles of it,” said EPA spokesperson, Jim Murphy. Mr. Murphy thought that GE could transport waste from downriver to Pittsfield, at which point it could be shipped west to the Model Cities landfill near Buffalo, or to another EPA-approved landfill in Michigan, Texas, or Utah. “GE would need to build rail loading and dewatering facilities, maybe in the middle of the 10-mile river stretch,” he added.
If GE and EPA cannot work these matters out informally by March 15, formal dispute resolution will proceed. The EPA Regional Counsel in Boston will serve as the administrative hearing officer, hearing the arguments on both sides and deciding how to proceed. According to Mr. Murphy, “he will either tell EPA to make changes or stand firm on the permit.”
Once there is a final permit, GE, or any member of the public who commented during the public comment period on the proposed permit modification, can appeal to EPA’s Environmental Appeals Board (EAB) in Washington, D.C.
If EPA or GE is unhappy with that outcome, either one can appeal to Federal Court.
Two to three years or more could elapse before cleanup is even started if GE and EPA continue to dispute the remedy.
Welcome-Wagon Gifts for GE
In a memo to employees last summer, GE’s Chief Executive, Jeffrey Immelt said that he wanted to relocate from Connecticut to a state “with a more probusiness environment.”
Mr. Immelt tapped Ann Klee to be head of GE’s Site Selection Committee, the GE Vice-President of Environment, Health and Safety responsible for the statement opposing EPA’s Housatonic cleanup plan.
About a month after VP Klee sent the statement to EPA protesting the cleanup terms, Boston and Massachusetts officials offered GE an incentives package totaling $145 million to lure the company to Boston.
The Baker administration says that roughly $120 million will go toward site improvements on the property that GE will choose for its new headquarters, such as a new building, a parking garage, roadwork and utility lines.
The City of Boston is offering $25 million in property tax relief, spread over 20 years. However, according to a report by the Institute on Taxation and Economic Policy (ITEP), a non-profit, non-partisan research organization affiliated with Citizens for Tax Justice, property tax relief likely played little part in the move because the company is already “one of the nation’s most notorious tax dodgers.”
Over a five-year period, ITEP says, GE paid just a 1.6 percent state income tax rate on $34 billion in U.S. profits, and less than 1 percent in federal income taxes.
GE’s press release stated that its relocation choice was driven by “the amenities Boston and the state of Massachusetts offer, including its “diverse, technologically fluent workforce” and its emphasis on research and development.
When MassLive asked Governor Baker whether the Housatonic cleanup was discussed in the context of the move, he said, “there’s no connection between those two items.”
Relationship-Building in Boston; Food Fight in the Berkshires
An extensive network of state, city, and GE power brokers has been facilitating the move.
Mayor Walsh called on friends for support, as detailed in a Boston Globe story. One was a GE government affairs manager, Jim McGaugh, a colleague when both worked for the House legislature. Mr. McGaugh and the former speaker of the house, Tom Finneran served as go-betweens between GE and Boston officials, reassuring the Mayor’s office that Boston was a serious contender.
The state Economic Development Secretary, Jay Ash, organized events to showcase Boston for GE’s Site Selection Committee. A two-day visit in September included a dinner with a number of business leaders, as well as speakers from the University of Massachusetts, the president of the Associated Industries of Massachusetts, and the director of MassChallenge Boston, a nonprofit startup accelerator.
In November, the state added to the cast of facilitators Governor Baker’s Chief of Staff, Steven Kadish, budget czar Kristen Lepore, and Massachusetts Port Authority chief Tom Glynn.
On its side, GE hired ML Strategies to negotiate a package. ML Strategies the lobbying and consulting arm of law firm Mintz Levin includes Steve Tocco, a former state secretary of economic development, Mo Cowan, a former U.S. Senator and chief of staff to Governor Deval Patrick, and former governor William Weld.
An 11-page brochure was developed that featured real estate and tourist attractions, and enumerated the benefits that GE would enjoy by locating in Boston, including helipad-accessible sites, access to airplane hangars, and, possibly, new ferries. “Concierge relocation services” and a “Homebuying 101” course would be offered to the relocating executives.
What can residents of the Berkshires make of this campaign?
First, the campaign itself developed a new, close network of GE/Boston/Massachusetts relationships. Second, these relationships were developing at the same time that GE was categorically refusing to carry out the EPA-directed Housatonic River cleanup.
Although Massachusetts could have conditioned the move on an expeditious, cooperative cleanup, there is no evidence that that happened. On the contrary, GE appears to have received benefits and incentives in the East, and no reminder of its responsibilities in the West.
When the move was announced, Ann Klee, responsible for GE’s Housatonic cleanup and Head of the GE Site Selection Committee said, “It was the total package. When we looked at our subjective and objective criteria, Boston was a great fit.”
Lessons from the Hudson River PCB Cleanup
A scathing New York Times editorial in October about GE’s termination of its PCB-soils cleanup of the Hudson River, titled “Selling Out the Hudson River,” provides a lesson for the Housatonic.
As GE came to the conclusion of its six-year Hudson River dredging operation, and prepared to dismantle its operation, scientists and environmentalists pleaded with EPA to make sure that it did not leave before removing the PCBs from 136 contaminated acres that were not included in the dredging agreement. This included a silted-up, “crippled” channel – the Champlain Channel – that cannot be dredged and used unless the PCBs are removed.
GE was winding up the activities required under its consent decree. Getting the company to perform an added task was a long shot. But, the New York Times felt, “old-fashioned pressure and moral argument” could have succeeded.
Two of the three government agencies serving as trustees for the health of the Hudson – the federal Fish and Wildlife Service and the National Oceanic and Atmospheric Administration – wrote EPA urging the agency to persuade GE to stay to finish the operation, perhaps by means of an add-on agreement. However, the third trustee, New York State’s Department of Environmental Conservation (DEC), did not sign the letter.
The editorial states, “The department answers to [Governor] Cuomo, who has absented himself from the clamor against GE’s departure. Mr. Cuomo has other priorities – he is trying to persuade GE to move its headquarters back to New York. He evidently would rather disappoint New Yorkers who love the river than jeopardize a corporate courtship.”
Pete Grannis, former head of the New York DEC, said, “The benefits of GE executives working back in N.Y., while nice, pale by many magnitudes against the value of a clean and healthy Hudson River.”
Mr. Grannis has framed the Hudson problem as a trade-off, and it is applicable to the Housatonic. No one denies that GE’s presence in Boston will be positive for the city and the state in a multitude of ways. But the health of the Housatonic should not be traded off or diminished by GE’s Boston choice – and by the new relationships formed.
When asked if the Housatonic cleanup would be less stringent because of GE’s move to Boston, EPA’s Mr. Murphy said, “I think they’re compartmentalizing the move to Boston and the Housatonic cleanup.”
In response to several questions about the State’s role in the cleanup, and the effect of the move on the cleanup, Lizzy Guyton, spokesperson for Governor Baker, sent a statement by email: “The Housatonic River is a valuable natural resource that provides a great environmental and economic benefit to the western portion of our state, and the Baker-Polito Administration remains committed to its cleanup and restoration.”
The EPA’s Housatonic River Citizens Coordinating Council will meet to discuss the Housatonic cleanup Wednesday, February 24, from 5:30 – 7:30 in the Lenox Library, 18 Main Street, Lenox.