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Air Force must pay for Lowry cleanup

U.S. judge rules for home builders in asbestos lawsuit

James Paton, Rocky Mountain News

Published March 7, 2007 at midnight

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The Air Force is responsible for asbestos cleanup costs borne by home builders at the former Lowry base, according to a court ruling that could have expensive implications for the government.

Richmond American Homes and other companies sued the Air Force after discovering asbestos in the soil and failing to persuade the U.S. government to pay the bill.

The expense totaled about $9 million, parts of which covered construction delays and compensation for homeowners, the builders' lawyers said.

"This case has national importance" because of a decision to close 22 major military bases by 2011, said Michelle Kales, an attorney with Brownstein Hyatt Farber Schreck in Denver.

The ruling late last month by a U.S. Court of Federal Claims judge probably will get the attention of real estate developers, home builders and lenders, the lawyers said. It "provides assurance they won't have to bear the potentially significant cost of environmental contamination," Kales said.

Air Force lawyers could not be reached for comment.

While the home builders put the cost at $9 million, the damages have not been determined by the court.

The home builders, a group that also includes Metropolitan Development, Standard Pacific of Colorado and Touchstone Homes, purchased the property in 2001 and 2002 from the Lowry Redevelopment Authority, a quasi-public entity overseeing the base's conversion from military to civilian use.

After the asbestos was found, the Colorado Department of Public Health and Environment in 2003 temporarily halted construction at part of the site. When the Air Force did not clean up the asbestos, the companies had to undertake the effort themselves, their lawyers said.

The Lowry Redevelopment Authority filed a similar lawsuit against the Air Force a year ago and said it was heartened by the ruling in the home builders' case. Its lawsuit still is pending.

"It is critical for the insurance, finance and development industries to have strong confidence in these projects in order for them to be successfully redeveloped," Tom Markham, the group's executive director, said in a statement. "Essential to that is the Defense Department's acknowledgement of its responsibilities to pay for cleaning up hazardous materials such as asbestos."

The LRA noted it's likely the Air Force will appeal the decision.

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