Sludge Watch ==> Milwaukee - Deep Sewer Tunnel Blamed for Downtown Buildings Sinking

[maureen.reilly at sympatico.ca]

Deep tunnel led to sinking, jury says
Verdict finds $9 million in damages but no 'significant harm'
By STEVE SCHULTZE
sschultze at journalsentinel.com
Posted: July 27, 2006

In a complicated verdict, a Milwaukee County jury on Thursday found the 
sewerage district's deep tunnel largely to blame for causing the downtown 
Boston Store building to sink on its pilings. But the jury also said the 
owners should have made their claim earlier in order to collect any money.


That building has had problems for many decades.

- Kevin Lyons, a lawyer for MMSD,
saying the Boston Store building had started sinking before deep tunnel 
construction

There is no evidence to support (the jurys) conclusion.

- Mark Cameli,
a lawyer for Bostco, disputing jury findings that the building owners 
suffered no harm



And in a further set of seemingly contradictory findings, the jury found 
that the building has sustained $9 million in damage but also said that the 
building owners didn't suffer "significant harm."

That led lawyers for both the Milwaukee Metropolitan Sewerage District and 
Bostco LLC, owners of the Boston Store building, to view the outcome as a 
victory.

MMSD lawyer Michael McCabe said the verdict means taxpayers won't have to 
pay any damages - although they are on the hook for at least the $3.15 
million in attorney and expert witness fees MMSD has racked up so far.

Mark Cameli, the lawyer for Bostco, said he felt confident in the jury's 
findings that the lawsuit was filed too late and that the building owners 
suffered no harm will be reversed either by the trial judge or on appeal.

"There is no evidence in the (trial) record to support their conclusion," 
Cameli said.

Bostco is owned by Wisconsin Energy Corp.; Boston Store leases space from 
Bostco.

The key point, according to Cameli, was the jury's finding that MMSD and the 
tunnel were negligent in the tunnel construction and operation and to blame 
for 70% of the building's damage, or $6.3 million. The various past and 
current owners of the Boston Store building were found 30% to blame for the 
structural problems.

Cameli said he'll argue in post-trial motions or on appeal that any statute 
of limitations problem with the case would affect only a small portion of 
the potential $6.3 million award.

Post-trial motions will be heard Sept. 11 by Milwaukee County Circuit Judge 
Jeffrey Kremers.

The verdict followed 2 1/2 weeks of often complicated testimony and about 
eight hours of deliberation. Bostco lawyers had asked for $12 million in 
damages and argued that groundwater leaking into the tunnel led to rotting 
of the 100-year-old building's wood pilings.

The 32-foot diameter sewage tunnel runs about 300 feet below ground and one 
block east of the store building, which is at N. 4th St. and W. Wisconsin 
Ave.

MMSD lawyers said that the building's problems traced to decades before the 
tunnel was built in the 1980s, and damage from rotten pilings was caused by 
owner negligence.

The district has paid more than $7 million to settle 20 smaller claims over 
the years related to foundation problems in downtown buildings that were 
allegedly caused by the tunnel or its construction. Affected buildings 
included the Bradley Center, the Milwaukee Theatre, The Shops at Grand 
Avenue and the Hyatt Regency.

The Journal Sentinel building is on a list of properties that might have 
been affected by the tunnel, but the newspaper building is not part of the 
lawsuit.

The Bostco case pitted squads of expert witnesses - engineers, 
hydrogeologists, inspectors and the like - paraded before the jury. The suit 
was filed by Bostco in 2003, two years after it purchased the structure.

Bottom line for the plaintiffs: The construction and operation of the deep 
tunnel caused groundwater to drop, compressing soils deep underground and 
thus exposing the building's wooden pilings and causing them to rot.

The district erred in failing to fully line the tunnel with concrete, Bostco 
lawyers said. The firm's complaint went further, charging that MMSD deceived 
the state Department of Natural Resources on the issue in order to get the 
DNR to back off a demand that the tunnel be fully lined. MMSD denied the 
accusation.

That mistake led to leaks, which allowed groundwater to rush into the 
tunnel, according to the Bostco suit. The tunnel leaks at about five gallons 
per minute in the area near Boston Store, with the two sides in the case 
arguing over the significance of that volume.

The 17-mile tunnel, drilled through bedrock, was completed in 1993 as the 
key element of a $3 billion sewer system upgrade. Hailed at the time as an 
engineering marvel, the tunnel was supposed to virtually eliminate sewage 
dumping by permitting temporary storage of excess sewage flows.

MMSD's defense focused on blaming Boston Store's own well - which pumped 
water from 1936 to 1962 - and building owners' alleged failure to properly 
monitor and treat building conditions for any foundation problems.

Downtown steam heating tunnels also might have contributed to the problems, 
according to MMSD.

"That building has had problems for many decades," Kevin Lyons, a lawyer for 
MMSD, told the jury. However, Lyons also argued that the building's pilings 
couldn't have settled as much as Boston Store owners claimed because that 
would have caused a "catastrophic failure" of collapsing walls.

In any case, MMSD shouldn't have to pay any damages to Bostco because it 
bought the Boston Store building "as is," with its known rotting pilings 
problem, Lyons said.

Some $2.9 million in repairs related to the pilings have been done since 
1997, according to testimony in the case.

Furthermore, most of the $3 million Bostco paid for the building - which is 
actually five connected buildings constructed between 1900 and 1920 and a 
newer parking ramp - was for the ramp, he said. The appraised value for the 
store buildings without the ramp five years ago was just $590,000, Lyons 
said.

Since then, Bostco has invested some $38 million into a remodeling job, 
which included nearly $9 million in state and city subsidies. The building 
still houses the department store, as well as apartments on upper floors.

>From the July 28, 2006 editions of the Milwaukee Journal Sentinel