A Polluted Site, and a Potential Mess for the Trump Organization

http://www.nytimes.com/2017/01/31/business/charleston-sc-titan-atlas-manufacturing.html

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An attempt by the Trump Organization to limit its liabilities at a polluted site in South Carolina once owned by President Trump’s oldest son may have just hit a wall.

The issue involves a company called Titan Atlas Manufacturing that Donald Trump Jr. helped to start in 2010 in North Charleston and that failed two years later.

In 2014, Donald J. Trump, while he was still running the Trump Organization, bailed out his son from the business misadventure by creating an entity called D B Pace. The new company took over a $3.65 million bank loan that had used the six-acre Titan Atlas site as collateral, and it eventually took ownership of the property itself.

Last year, D B Pace also applied to take part in a program offered by the State of South Carolina that would limit its liabilities for pollution on the property, like chemical contamination of groundwater.

To qualify for such protections, however, the buyer of a contaminated property must not be affiliated with a former owner or have had earlier involvement with the site. A Trump Organization lawyer, Michael Cohen, said last year that D B Pace’s application met that standard because D B Pace had no ties to Titan Atlas and had never been involved in the management of the North Charleston property.

But South Carolina regulators are now challenging that contention. The move follows an article in The New York Times in December, which reported that lawsuit filings showed that Donald Trump Jr. and Mr. Cohen had actively managed the Titan Atlas property for two years before D B Pace applied to the state’s program.

The South Carolina Health and Environmental Control Department said in a letter sent two weeks ago to Mr. Cohen, who is also an executive of D B Pace, that it had received information that “warrants further consideration” of D B Pace’s application.

The letter asked Mr. Cohen to disclose, among other things, all familial, corporate and financial relationships between D B Pace and the “members, shareholders, officers” or principals of Titan Atlas.

Lawyers said the state requires the buyer of a contaminated site to be unaffiliated with past owners or operators so polluters cannot evade liability by using another company to stand in their place.

Court papers show that in 2014, Donald J. Trump Jr. and Mr. Cohen started rejecting requests from a tenant of the former Titan Atlas factory to fix the building’s leaky roof unless the tenant extended its lease. Then in late 2015, after days of rain in the Charleston area, the roof collapsed, and the company, Saint-Gobain Adfors, has since filed a lawsuit seeking $4.5 million in damages.

It is not clear when South Carolina officials will make a decision, which will almost certainly have significant legal and financial consequences for the Trump Organization and President Trump, who has retained his stake in the company but transferred its day-to-day operations to his sons Donald Jr. and Eric Trump.

If the application is approved, the cost to D B Pace would probably be minimal because its environmental obligations would be limited to controlling the spread of existing pollution on the property. But if regulators reject the application, D B Pace could be legally responsible for pollution at the site caused by Titan Atlas, and costs could mount into the millions of dollars.

The company produced cast panels for prefabricated houses, and the property is now littered with decaying structures and rusting industrial drums.

In their letter, South Carolina officials asked Mr. Cohen to respond their inquiries by the end of this week. A spokeswoman for the state’s environmental agency said it had yet to receive his answers.