Asbestos Costs Cause Developers to Break Missoula Mercantile Contract

Illustration of potential asbestos exposure in a building

Developers Stephen Glenn and Dario Passalalpi of Reno, Nevada signed a contract last year to renovate the historic Missoula Mercantile building, but have now backed out due to additional asbestos abatement that needs to be completed. Months of work had been done and they were well into the financing phase when Glenn discovered more asbestos.

Montana has a longstanding history with asbestos, in particular, its small town of Libby is a well-known Superfund site because of the asbestos-ridden mine located there. The asbestos mine there is believed to be responsible for the high number of mesothelioma and asbestos disease diagnoses. You can view the U.S. Environmental Protection Agency’s final toxicological review completed on the location.

Missoula has also had numerous sites where asbestos exposure occurred throughout the years. Now with the Mercantile building, asbestos was found in 89 of 407 samples during a Brownfields study on the building by the U.S. EPA in 2011. This included the flooring material, window calking, roofing tar, pipe insulation, decorative panels, and joint compound for drywall.

Octagon Capital Partners of Virginia originally bought the building for $2.3 million in 2011 and hired the Abatement Contractors of Montana (ACM) to perform the asbestos removal. For a total of $1.3 million, the abatement was said to be complete by 2013.

But Glenn said, “There’s hundreds of thousands of dollars of abatement that has to be done before anyone who’s going to do any true rehab work can start. The building really needs to be resurveyed from the ground up by an impartial surveyor.”

President of the ACM, Tanya Chemodurow said, “Octagon initially gave us a scope of work of what they wanted in the remodel of the building. All of the asbestos impacted by their planned remodel was removed.” The penthouse and a vintage cooler still contained asbestos because they were considered historic, but otherwise the property was fully abated.

Glenn and Passalalpi were under the impression that all asbestos had been removed, not simply to a standard that met Octagon’s redevelopment goals.

On the other hand, Nancy Harte, Senior Grants Administrator and Brownfields Coordinator of the Missoula Department of Grants and Community Programs, said, “Abatement happens based on what they want to redevelop it into, and it may be completely different from what these new buyers wanted. Within the scope of what Octagon asked ACM to do—and what Northern Industrial Hygiene confirmed—they had done a good job and cleaned it up to the level they wanted them to.”

According to Harte, asbestos is only harmful when tampered with. If it’s left alone it’s technically allowed to stay. She stated the areas Octagon planned to remodel were abated and the air tests came back clean, however, the developers’ plans were above and beyond the initial expectations.

A renegotiation took place, but an agreement could not be reached.