Developer addressing methane problem at Otay Ranch housing project
An artist's rendering of the future Village of Escaya in Otay Ranch. Credit: Escayalife.com.

Developer addressing methane problem at Otay Ranch housing project

The Otay Water District has reached a resolution with HomeFed Corp. to install water meters at the developer’s 450-acre Escaya master-planned community in Otay Ranch after methane and other volatile chemicals were found in soil samples.

“We’re proceeding with all our work in the field,” said Kent Aden, vice president of Carlsbad-based HomeFed. He added that the water district’s agreement to move forward with the meters “was kind of a big milestone.”

Eighteen of 196 home buyers have cited the environmental concern as the main reason for pulling out of their contracts, according to HomeFed.

“Erring on the side of conservatism, we felt the right thing to do was give them a chance to get out of the sale,” Aden said. He added that it’s not uncommon for some buyers to back out of purchases in new home developments, and they do it for a variety of reasons.

Although the developer and government officials knew methane and chemicals had been found at the Escaya site this year, it wasn’t widely known until inewsource first reported about it on Dec. 10. Since then, inewsource has contacted home buyers, government agencies, attorneys, methane experts and HomeFed to better understand the situation and any potential physical harm for residents. Here’s what we’ve found:

  • HomeFed and the San Diego County Department of Environmental Health have stated that the levels of methane and volatile chemicals found within Escaya pose no danger if properly mitigated. GeoKinetics — a geotechnical and environmental engineering company — has added that “no potential exists for the water distribution system to be impacted” by the chemicals.
  • Despite the relatively low levels, HomeFed is taking “extremely conservative” measures to remedy the problem, Aden said. All of the homes currently offered for sale have mitigation measures installed at a cost of $8,000 to $10,000 per home. HomeFed hired an engineering company to develop vent pipes and soil gas control systems for undeveloped lots where testing has occurred.
  • The methane discovery is not abnormal. The San Diego County Board of Supervisors repealed a law in 2005 requiring methane testing at sites with large-scale grading because the chemical is so often discovered among projects of this size. Moving huge amounts of earth can lead to the degradation of organic materials — though that has not been identified as the source of methane at Escaya.

Contractors first detected perched groundwater and petroleum hydrocarbon odors during a trench excavation in April. An environmental engineering firm sampled the groundwater in May, and HomeFed requested the county Department of Environmental Health “assist in identifying” the responsible parties in June.

Though home buyers were alerted in initial contracts to a nearby landfill and the potential for methane migration, Aden said HomeFed issued additional disclosures in the summer after going through a process with the California Bureau of Real Estate.

“If somebody had a lot of questions … we connected them with our consultants to let them ask as many questions as they wanted,” Aden said.

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The Otay Water District, which will provide Escaya homeowners with drinking water, was concerned about issuing water meters to HomeFed, water district spokeswoman Tenille Otero said. The district requested documentation from HomeFed about the methane and volatile chemicals before giving approvals related to water facilities.

The district will be responsible for HomeFed’s work — including pipes and facilities — once the project is completed. If chemicals were to eat away at that infrastructure in the future, it would be the district’s responsibility to fix the problem.

Otero told inewsource the district has since received all of the reports and documents necessary from HomeFed to authorize the selling and installation of the meters, which she said will happen “soon.”

Otero added that the district does not anticipate its meter release will delay any scheduled closings by home buyers, though HomeFed needs water at the site to pass bacterial tests before meters can be installed.

According to a GeoKinetics report issued this month, the chemical concentrations measured at Escaya “are orders of magnitude below the threshold where there could be any impact to the potable and recycled water lines or their associated components.”

Lingering questions about the methane

The main question for HomeFed and the county Department of Environmental Health is the source of the methane and volatile chemicals.

According to HomeFed, it may be the result of moving 7 million cubic yards of dirt at the construction site.

“If you bury organics deep in a fill with a little bit of oxygen, then that process starts and one of the outputs is methane,” Aden said.

The GeoKinetics report twice stated the Otay Landfill is the most likely source, while a June letter from HomeFed to the county said the source is “reasonably believed to be from one or more adjacent commercial property owners whose businesses include auto wrecking yards, auto salvage, auto storage and related activities.”

At least four water- or soil-based environmental cleanups of the adjacent industrial park have occurred since 1989, according to California’s State Water Resources Control Board. One nearby auto salvage yard has paid $585,241 in cleanup funds and is still in remediation.

No clear pattern points to one culprit, Aden said, though HomeFed and others are working to identify it.

“It’s kind of a C.S.I. thing,” he said, “where they take a fingerprint of the methane and they compare that to methane found on an adjacent site.”

There’s a lot of money at stake. The homes in Escaya sell from the $300,000s to the $700,000s.

Initial environmental impact reports didn’t find the problem, or if they did, they didn’t address it. If they had, “the biggest benefactor would have been us,” said Halé Richardson, a HomeFed spokeswoman. “It would have impacted the purchase price.”

Aden said HomeFed plans to continue testing in the eastern section of the development and mitigate if necessary.

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About Brad Racino:

Brad Racino
Brad Racino is a senior reporter and assistant director at inewsource. To contact him with tips, suggestions or corrections, please email bradracino [at] inewsource [dot] org.

About Brandon Quester:

Brandon Quester is director of data and visuals at inewsource. To contact him with tips, suggestions or corrections, please email brandonquester [at] inewsource [dot] org.