DANVERS — The owners of the Danversport chemical plant that exploded in 2006, destroying more than two dozen homes and businesses, displacing more than 100 residents, and causing millions of dollars in damage, have reached a projected $1.3 million settlement with the federal government.
The U.S. Department of Justice, acting on behalf of the Environmental Protection Agency, announced the consent decree yesterday with Georgetown-based ink maker CAI Inc.
"Most of that recovery will go to reimburse the EPA for its $2.7 million in costs of cleaning up hazardous waste after the explosion," the federal agency said in a press release.
The settlement includes cash and the anticipated net proceeds from the sale of the Water Street property, "assuming the property sells for its appraised value," the EPA said.
CAI also agreed to pay a $100,000 penalty to settle allegations that conditions at the site violated sections of the Clean Air Act.
Specifically, the company was cited for "failure to identify the hazards of operating an ink-mixing process overnight without proper ventilation," and lack of vapor detectors, alarms, automatic shut-off valves and fire permits.
The penalty also resolves an EPA claim against CAI for failing to respond to a request for information about the company's handling of extremely hazardous substances.
A separate consent decree was reached last month with Arnel Co. Inc., a paint manufacturer that was in the same Danversport building. Arnel agreed to pay $11,250 to help cover cleanup costs and a $3,750 civil penalty.
"The settlement amounts in both consent decrees were based on demonstrations by the settling defendants of limited financial resources," the EPA said.
The two companies stored and used a number of flammable substances in the manufacture of solvent-based ink, paint, thinners and industrial coatings.
This is the latest legal action resulting from an explosion that rocked the waterfront community the day before Thanksgiving five years ago. In addition to the manufacturing plant, 24 homes and six businesses had to be demolished, while another 70 homes suffered damage, according to the EPA.
The Danvers Fire Department and others evacuated an estimated 300 residents within a half-mile radius of the blast.
There were no fatalities, which was largely attributed to chance and the fact it happened early in the morning while residents slept.
In 2008, the insurance companies for the chemical plant reached a $7 million settlement with several hundred neighbors, businesses and boat owners. Most of the money went to insurance carriers, who paid out more than $20 million in blast claims.
The average settlement to individuals, after expenses and attorney's fees, was reported to be $2,700.
Although CAI has sued National Grid, blaming the explosion on gas that it said leaked into the plant, investigations into the massive accident pointed the finger at the plant owners.
The state fire marshal blamed it on human error when a worker failed to turn off the heat cooking a mixture of volatile chemicals. Vapors spread through the facility and were ignited by a spark from an undetermined source, according to Fire Marshal Stephen Coan, who investigated the accident with the Danvers Fire Department, state police, and federal officials from the Bureau of Alcohol, Tobacco, Firearms and Explosives.
The U.S. Chemical Safety Board, calling this one of the most powerful blasts it has investigated, concluded that a CAI production manager failed to shut off a steam-heat valve before leaving for the night.
The Occupational Safety and Health Administration cited the two companies for numerous violations.
The consent decree announced yesterday resolves the EPA claims against CAI and owners Sartorelli Realty LLC and Roy A. Nelson as trustee of the Nelson Danvers Realty Trust.
CAI did not return a phone call.