The city acquired the contaminated property under eminent domain with the idea of developing about 300,000 sf of retail and entertainment uses, 350 residential units and a 300-room hotel on the site. The redevelopment plan hit a snag when the city was forced to investigate the need to cleanup 25,000 yards of contaminated soil and to prevent groundwater contaminated on the site from damaging San Francisco Bay.

Once the site cleanup was underway, the city filed suit in Federal District Court claiming the prior site occupants, which include a pesticide plant, an iron-oxide manufacturing plant and a disposal drum recycling operation were responsible for the entire cost of the cleanup. Even before the court ruled, the city recovered $7.1 million in cleanup costs through mediation and a settlement.

The court ruling declared the city could not be held responsible for any of the cleanup costs just because it acquired the property under eminent domain. The decision paves the way for other redevelopment projects on contaminated sites in urban core areas by validating the use of eminent domain in property acquisition and by allowing the city Superfund-style cleanup authority, according to an attorney representing Emeryville.