Ex-owner knew day-care site was contaminated

Philip Giuliano, who abandoned his bankrupt thermometer factory, Accutherm, in Gloucester County nearly two decades ago, knew it was contaminated with mercury when he locked it up and walked away.

Giuliano, now a real estate salesman in Virginia, said in videotaped testimony played recently in Superior Court that he never dreamed it could reopen without being cleaned up.

But it did - as a day-care facility known as Kiddie Kollege.

For two years after the 2004 opening of the day-care center in Franklin Township, as many as 100 children breathed toxic vapors still seeping from the walls and floors of the single-story structure.

Now Giuliano and the current owner face lawsuits from parents who want medical monitoring for their children. Giuliano's testimony on Feb. 18 - in a trial to determine who legally owns the site - marks his first public accounting of his position on the polluted building.

Jim Sullivan III, a real estate broker who acquired the building for $37,000 in a municipal tax sale, also is suing Giuliano, saying the former factory owner should pay for demolition and clean-up, now estimated at $1 million.

Sullivan rented the building to Kiddie Kollege Day Care for $42,000 a year after doing minor renovations. He has said he was unaware of the degree of the contamination.

After an environmental inspector discovered the day-care center operating in the toxic building, in April 2006, it was retested and then closed. The building harbored vapors 27 times an acceptable limit. Health experts say mercury can cause neurological and kidney ailments.

Giuliano, who left the state 17 years ago, was in court last week in video form only. Various lawyers, including those who represented Sullivan and other family members involved in the building acquisition, took Giuliano's deposition in July in Williamsburg, Va., and recorded it. He had failed to appear at pre-trial hearings.

Giuliano also did not show up for trial, and Judge James Rafferty agreed to watch an excerpt of Giuliano's taped testimony.

"It's not that we didn't want to clean up the site; we just didn't have the capital to do it," said Giuliano, a burly 62-year-old with a salt-and-pepper beard, as he folded his arms and stiffened. He was the sole owner, though he frequently answered questions in the plural.

When he moved, Giuliano left behind boxes of thermometers, vials of mercury, and equipment used in manufacturing.

Giuliano's situation is similar to that of thousands of polluters who vacate contaminated buildings and hope to escape clean-up costs and liability, according to Jeff Tittel, executive director of the Sierra Club of New Jersey.

Tittel estimates one-third of the owners of the state's 20,000 toxic sites vanish, leaving "taxpayers holding the bag."

He said that when a toxic site such as Accutherm is abandoned, it often "will sit there for years, sometimes 20 or 30 years" because the state has too little clean-up money. Unsuspecting people, such as the Kiddie Kollege children, can be exposed to the poisons, he said.

Larry Hajna, a spokesman for the state Department of Environmental Protection, said the state pays about $20 million a year for clean-ups and is cleaning up about 350 sites.

The DEP wants to demolish Kiddie Kollege and bill Sullivan, Giuliano or both.

Soon after Accutherm opened, around 1988, workers became ill, registering high levels of mercury in their blood. The Occupational Safety and Health Administration (OSHA) ordered more ventilation systems, and Giuliano said he complied.

But high vapor levels persisted, he said.

Then, the DEP found the septic system was polluted with mercury and ordered a clean-up.

Giuliano decided to shut down.

"We could not meet their standards," he said. "The amount of money to do the remediation was out of the question."

Giuliano said he closed the factory in 1992, though DEP records indicate he notified the department of the closing in 1994. At one point, he wrote a note to DEP saying he could not afford the filing fee needed to allow the state to start the clean-up.

Giuliano said the company grossed about $120,000 a year and had six workers.

Sullivan's attorney, Richard Hluchan, asked him to describe the mercury spills and explain how the building could have become so toxic.

"Over the years, you break a thermometer, or you have a small spill, and if it's not cleaned up correctly, it's insidious. So, you can't see it, but it still might have a residue," Giuliano said.

After Kiddie Kollege was closed, the DEP found mercury beads clinging to ceiling joists and cracks in the floorboards. Giuliano said that he did not know how much mercury he had bought but that at any given time, about 20 pounds of the metal were on the premises.

"A little bit goes a long way," he said.

Some parents reported seeing beads on their children's blankets, but they said they assumed these were just craft sparkles. Severe symptoms have not been reported, but some children have chronic health problems, according to Tina Toy, a mother of two children who attended the center.

"Mercury can go dormant, so something could happen any time," Toy said. "There are various question marks now. Some children have many migraines, and some have urinary problems."

Toy says Giuliano must share the blame. "I feel it was wrong for him to walk away from it," she said. "There was pure mercury in that building, and that's despicable."

But Toy reserves most of her anger for Sullivan, saying he converted the site to a day-care center without regard for the children's welfare.

"That was wrong on a moral level," Toy said.

She and other parents filed class-action suits that also blame the state, the county and the town for allowing the center to open.

Sullivan, a real estate broker and licensed appraiser, testified in person after Giuliano's videotaped deposition. He said he had asked a town official for information on the building and was given only an Environmental Protection Agency Mini Pollution Report. He said he mistakenly interpreted the conclusion as saying that contamination in the building was minimal and not a health threat.

Sullivan said he acquired the building to remove "an eyesore" next to his real estate sales office. He said he never met Giuliano and knew nothing of the factory.

Sullivan says his deed should be voided because Giuliano failed to clean up the site and the government failed to notify him of the excessive contamination.

Giuliano says he told the state he had no money and had his lawyer post a sign saying "Warning: Inhalation Danger."

Government lawyers say Sullivan failed to check the state's toxic-sites list, which included the Accutherm building, and also did not conduct due diligence to find out whether remediation was required.

Giuliano said he was surprised to learn that Sullivan obtained the title without cleaning up the site and getting DEP approval. "I just assumed he'd be cleaning it up himself and knew what he was doing," said Giuliano.

Giuliano said he had never met Sullivan. Now the two are mired in litigation that could continue for months or years.

The judge is expected to issue a written opinion in the next month or so on whether Sullivan's deed is valid. If it is not, Giuliano may again be the owner of record.