I.B.M. Offers $10,000 to Owners of Contaminated Houses

September 3, 2004

By ANTHONY DePALMA

The I.B.M. Corporation announced yesterday that it was willing to pay $10,000 each to the owners of nearly 500 contaminated homes in the upstate village of Endicott if the owners give up their right to sue for property damages caused by industrial pollution.

Residents have complained that ventilation systems I.B.M. has installed in their homes since 2002 to prevent toxic vapors from building up in the basements have hurt property values. Last year they asked Attorney General Eliot Spitzer for help in protecting home values.

Mr. Spitzer's office negotiated with I.B.M. for a year to develop the payment program, which is modeled after a similar effort in Rochester. Endicott officials think the payments will help revive the village, compensate homeowners for lost real estate values and allow residents to improve their homes, creating spillover economic benefits. Homeowners would not be required to use the money for home improvements.

The owners of the 480 houses and a handful of commercial properties that were offered the ventilation systems are eligible to receive payments. Owners would give up the right to sue for property damages but would still be able to sue for personal injury.

The program could cost I.B.M. more than $5 million, and will be another costly step in the company's efforts to remediate hazards it helped create in this upstate village just west of Binghamton, where it got its start nearly a century ago. Other manufacturers also contributed to the pollution, but only I.B.M. is helping clean it up.

Last month, I.B.M. agreed to a consent order with the state to clean up the remaining pollution, a byproduct of chemicals called volatile organic compounds that were used as degreasers.

Residents of Endicott had a mixed reaction to the announcement of the payment program.

"My gut reaction is that sounds like a buyout," said Edward M. Blaine, the director of a community outreach program who has owned a house in there for 31 years.

Mr. Blaine, 52, said he was not sure that he would accept the money and give up his right to sue if he cannot sell his house at market value. "If I had to say yes or no right now I'd probably say no," he said. "I need to think about it."

Joseph T. Havel has no doubt. "I'm not taking it," Mr. Havel said. "It's like a payoff, isn't it?"

Mr. Havel is a taxidermist who used to work in his basement until state environmental officials discovered that the plume of groundwater contamination was giving off vapors that were seeping into the many basements, including his. He has since abandoned the basement and built a workshop in the garage.

"If I tried to sell my house right now, I probably wouldn't get any more than $60,000," he said. "People across the street from me have been trying to sell for over a year."

He said the house had an assessed value of $102,000.

David A. Munro, an assistant attorney general who worked with I.B.M. to develop the program, said there was no evidence that property values had declined since the vapor problem was discovered.

Rose Sotak, a real estate agent whose parents owned a house in Endicott that they have willed to her 18-year-old daughter, Kristin, said sales records indicated that prices had actually increased from 1 to 5 percent a year in the last few years.

Ms. Sotak said she would accept I.B.M.'s offer and put the money toward Kristin's college tuition.

"The way I look at it," Mrs. Sotak said, "I.B.M. will be paying over $5 million, which will be great for the economy here."

Samme Chittum contributed reporting for this article.