Ohio EPA John R. Kasich, Governor Mary Taylor, Lt. Governor Craig W. Butler, Director

December 30, 2014

The Honorable Mike DeWine Attorney General of Ohio Environmental Enforcement Section State Office Tower, 25th Floor 30 East Broad Street Columbus, Ohio 43266-0410

Re: Referral of James H. Hyland Ill and Harper Industries, Inc.

Dear Mr. DeWine:

Pursuant to ORC § 3704.06, I hereby request that you initiate all necessary legal and/or equitable civil actions as may be deemed necessary and seek appropriate penalties against the above-referenced party and any other appropriate party for the violations of ORC Chapter 3704 and the regulations adopted thereunder. Copies of the Division of Air Pollution Control's enforcement files are enclosed.

In conjunction with Ohio EPA's compliance goals and objectives, I respectfully request that this referral result in the filing of a civil complaint in the appropriate court if settlement is not reached within one year from the date of this letter.

Thank you for your assistance in this matter. Any questions you may have should be directed to James Kavalec, Division of Air Pollution Control Enforcement Manager (614-644-4840) . James should be kept apprised of the status of this matter and any action taken with regard to it.

Sincerely,

c~-Craig W. Butler Director

xc: Jim Kavalec/John Paulian , DAPC Drew Bergman, Legal Office Valencia White, CDAQ

Enclosures CWB/JK/jk

50 West Town Street • Suite 700 • P.O. Box 1049 • Columbus, OH 43216-1049 www.epa.ohio.gov • (614) 644-3020 • (614) 644-3184 (fax)

Ohio EPA Division of Air Pollution Control

INTER-OFFICE COMMUNICATION

TO: Dale Vitale, Chief, Environmental Enforcement Section, Attorney General's Office

FROM: Jim Kavalec, DAPC Enforcement Section and Drew Bergman, Supervising Attorney, Legal Office, Ohio EPA

SUBJECT: Notes concerning the referral of James H. Hyland Ill and Harper Industries, Inc.

DATE: December 8, 2014

CONFIDENTIAL: ATTORNEY-CLIENT PRIVILEGED COMMUNICATION CONFIDENTIAL LAW ENFORCEMENT INVESTIGATORY RECORD

The Director of Ohio EPA is referring James H. Hyland Ill and Harper Industries, Inc. for failing to comply with the May 5, 2014 Director's Unilateral Findings and Orders. The following is a brief summary of the case. Copies of the enforcement case files are attached.

SYNOPSIS

On May 5, 2014, the Director issued Unilateral Findings and Orders to James H. Hyland Ill and Harper Industries, Inc. (attached) forthe clean-up of the asbestos-containing demolition debris at the site of the former Victoreen Building Complex located in Cleveland, Ohio (Cuyahoga County).

This matter is associated with the demolition of the former Victoreen Building Complex in 2010. Five of the Complex's six buildings contained regulated asbestos-containing materials (RACM). Demolition of the facility's buildings occurred prior to the removal of the RACM, known to be in the buildings, which allowed the RACM to be comingled with other demolition debris on the site.

Based upon the information available to DAPC from the Cuyahoga County Auditor's web site, it appeared that Harper Industries forfeited their property holdings to Altus Financial Services, LLC in October of 2012. James H. Hyland 111, president of Harper Industries, Inc. filed for dissolution of the company in February of 2013.

Because the site was still contaminated with asbestos-containing materials, Ohio EPA issued Unilateral Orders to Altus Financial Services, LLC on December 13, 2013 which required Altus to properly clean-up and dispose of the asbestos-containing materials at the

IOC to Dale Vitale Page 2 of 2

site before the property was sold or redeveloped.

On January 13, 2014, Altus appealed the Unilateral Orders to ERAC. In the appeal, Altus states that they do not own the property in question. Based upon communications with AGO, Altus, and the Cuyahoga County Auditor's Office, it was determined that Altus no longer holds interest in the property and that Harper Industries still owned the property. The AGO and Altus had further communications and agreed that the appeal could be resolved through the issuance of a letter rel ieving Altus from the obligations set forth in the Ohio EPA Director's Orders and the issuance of the attached Unilateral Orders James H. Hyland Ill and Harper Industries.

However, as indicated above, the site is still contaminated with asbestos-containing materials and needs to be properly remediated. As such, DAPC issued Unilateral Orders to James H. Hyland Ill and Harper Industries on May 5, 2014 in a final attempt to have the contaminated property properly cleaned up in order to avoid using State and/or federal funds to complete the clean-up and disposal of the asbestos-containing materials on the site. James H. Hyland Ill appealed the Orders indicating that James H. Hyland Ill resigned as President of Harper Industries and the company was dissolved in 2013, prior to the Orders being issued. In addition , James H. Hyland Ill and Harper Industries, Inc. no longer own the property; it is now owned and controlled by the state of Ohio, as a result of forfeiture of the property due to the nonpayment of property taxes. The ERAC appeal is still outstanding.

CIVIL PENAL TY

The violations observed at the facility were the result of not properly removing, adequately wetting , and disposing of regulated asbestos-containing materials (- 2,000 cubic ft. of pipe insulation and - 2,000 linear ft. of transite), which remains on-site. The economic benefit from failure to comply with the asbestos rules and properly clean-up the site is approximately $80,000 using $20 per cubic foot/l inear foot per US EPA penalty policy. 4,000 cubic feet/linear ft. x $20 = $80,000. The work practice and handling violations along with the size of violator and recalcitrance/unwillingness to clean-up the site would result in another $225,000 for a penalty of $270,000.

RECOMMENDATION

Ohio EPA is recommending that the AGO resolve this enforcement case by obtaining a consent order (or a court order, if necessary) requiring James H. Hyland Ill and all other responsible parties to complete the clean-up and disposal of the asbestos-containing materials on the site. If you have any questions, please contact one of us.

Air Civil Penalty Worksheet James Hyland and Harper Industries

Demolition Site: 10101 Woodland Avenue, Cleveland, Cuyahoga County, Ohio (for settlement purposes only

A. Benefit Component:

B. Gravity Component: 1. Actual or possible harm

day):

a. Amount above standard:

b. Toxicity of pollutant:

c. Sensitivity of environment:

d. Length of time of violation (first

i. Asbestos-containing materials work practice violation :

Length of time of violation (additional days):

ii. Asbestos-containing materials work practice violation:

Length of time of violation (additional days):

$80,000

$15,000

$15.000

$110.000

Violations observed were the result of not properly removing, adequately wetting, and disposing of - 2,000 cubic ft. of pipe insulation and - 2,000 linear ft. of transite. RACM. Per USEPA penalty policy $20 per cubic foot is applied as an economic benefit. Therefore, the economic benefit from failure to comply with the asbestos rules is 4,000 cubic feet/linear ft. x $20 = $80,000.

not applicable

not applicable

not applicable

Number of asbestos units is 65. [(2,000 cubic ft./35 cubic ft.I unit of transite and 2,000 linear feet/260 linear feet of pipe insulation) = 154 units] The penalty policy gives $15,000 per work practice violation as the penalty factor for more than 50 asbestos units and $1,500 for each additional day a violation occurred. Failed to remove all regulated asbestos-containing material from the facility prior to the beginning the demolition activities that broke up, dislodged, or disturbed the materials or precluded access to the materials for subsequent removal, in violation of OAC Rule 3745-20-04(A)(1) and ORC § 3704.05(G). On 1/27/10 and 10/26/10, CDAQ observed post-demolition debris piles at the facility that contained pipe insulation and transite that had been determined to be RACM. For at least 2 days, 1/27/10 and 10/26/10, Respondent failed to comply with asbestos regulations identified in 8 .1.d.i. 2 days x $1 ,500 per day x 1 work practice rule violations= $3,000.

From 1/27/10 until present*, -60 months, Respondent failed to adequately wet the RACM and ensure the RACM remained adequately wet until collected and contained for disposal and failed to timely dispose of all ACM, in violation of OAC Rules 3745-20-04 and 3745-20-05 and ORC § 3704.05(G). From 1/27/10 to present*, -60 months, Respondent failed to comply with the asbestos regulations identified in 8.1.d.ii. 2 rule violations at $55,000 each = $1 10,000

2. Notifications:

No notification submitted. iQ -

not applicable a.

b. No notification submitted but iQ not applicable substantial compliance with work practice standards.

c. Late, incomplete or inaccurate iQ not applicable notification.

d. No asbestos survey performed. iQ not applicable

3. Importance to regulatory scheme: iQ not applicable

4. Size of violator: $2,000 No information was available to estimate the net worth of Respondent so we estimated the net worth to be less than $100,000. The penalty policy matrix gives a penalty of $2,000, which is the lowest penalty amount for size of violator.

Total Gravity Component: i1451000

Preliminary Deterrence Amount: i2251000 (sum of benefit and gravity components) C. Flexibility-Adjustment Factor:

1. Degree of willfulness or negligence: ~45,000 Respondent has failed to clean-up the (total gravity component times an site since 2010. augmentation percentage)

2. Degree of cooperation: iQ not applicable (total gravity component times any mitigation percentage)

3. History of noncompliance: not applicable (total gravity component times any iQ augmentation percentage)

4. Ability to pay: iQ not known at th is time (any mitigation amount)

5. Other unique factors: $0 not applicable (total gravity component times any mitigation or augmentation percentage)

All augmentation (+) and mitigation(-) $0 amounts added: (if negative, cannot exceed total gravity component) Initial Minimum Settlement Amount: i 2701000 [preliminary deterrence amount + or - sum of flexibil ity adjustment factors plus administrative component (A+B+C)l

*1 /1/15