Mulhearn

The operators of Rhode Island’s trash agency were buying up land around the state’s Central Landfill in Johnston.

And the mayor of Johnston, whose support the agency had enlisted for a proposed industrial park, had some property next to the landfill to sell. So did the mayor’s cousin.

The result was two land deals, in an 18-month span from 2000 to 2002, that paid Mayor William A. Macera and his relatives $8 million, and left the taxpayers with property containing a swamp and a dump with hazardous substances.

Today, state auditors say that the property is worth less than what the Rhode Island Resource Recovery Corporation paid. A preliminary audit released in March by Governor Carcieri said the agency disregarded the presence of environmental hazards and wetlands when buying the land.

The preliminary audit also criticized Macera, who left office last year, for supporting the industrial park while failing to tell the public that he and his relatives stood to profit financially from land deals with Resource Recovery.

The state is working on a more detailed forensic audit, focused on those land deals and others that the new executive director at Resource Recovery says could cost taxpayers $13 million. Auditors also are looking into suspected mismanagement, cronyism and corruption in other areas, including the management of agency pension funds and possible theft of equipment raised in the preliminary audit.

The Providence Journal reviewed documents showing that over the years state environmental regulators had reported problems at the dump — including buried PCBs, concentrations of arsenic and rusted drums of waste oil — and had ordered the owners to develop a cleanup plan. But no plan existed when Resource Recovery bought the land in 2000 for $6 million.

Eighteen months later, the agency spent $2 million for the land containing the swamp. Officials justified the purchase by saying they wanted to use the soil for cover at the landfill. But an engineering report six months before the purchase had advised that the soil was unsuitable as cover material.

Documents also show that while Mayor Macera was publicly advocating for the industrial park, which was opposed by most other elected officials in Johnston, Resource Recovery was negotiating with his cousin to buy the property containing the dump and then with the mayor to buy the land with the swamp.

The Maceras say that they did nothing wrong, and that the agency paid a fair price for their land.

The Resource Recovery leaders who negotiated the purchases, chairman A. Austin Ferland and former executive director Sherry Mulhearn, have not responded to repeated requests for comment. It was Mulhearn’s successor, Michael O’Connell, who first raised questions last year leading to the current audit.

THE RHODE ISLAND Resource Recovery Corporation is a $70-million state agency that manages New England’s largest dump, the Central Landfill in Johnston, and oversees the state’s recycling program.

In 1991, when Ferland was a new board member, he proposed that the agency develop an industrial park on several hundred acres that it owned next to the landfill. The agency had bought the land on orders from the General Assembly to buy out unhappy homeowners near the expanding and malodorous landfill.

Ferland, a prominent Rhode Island real estate developer, argued that the General Assembly order had forced the agency into the real estate business. But the Rhode Island auditor general at the time, Anthony Piccirilli, disagreed that the agency should develop an industrial park. The corporation was a state agency, not a developer, he said. Its leaders “should focus all their attention on waste management” and “not get into the real estate business.”

For a while, the plan went nowhere.

Then, in 1996, Ferland rose to chairman and CEO of Resource Recovery. That same year, Sherry Mulhearn, a lawyer at Adler Pollock & Sheehan, which had represented the landfill, was hired as the agency’s full-time legal counsel. Five months later, she was appointed acting director, and the following year, the board made it permanent. One of her primary duties, Ferland said, would be to pursue an industrial park.

In 1997, the corporation asked the General Assembly to pass a law empowering it to develop the park. That summer, after the law passed, Ferland announced that the corporation had taken the first, exploratory steps toward developing an industrial park that would cater to businesses manufacturing products from recycled paper, plastic and other materials. The goal: turn trash into cash.

The corporation planned to pay for new on- and off-ramps from Route 295 to Shun Pike, providing easy access to the park and a more direct route for garbage trucks to reach the Central Landfill without clogging town roads. Resource Recovery said the industrial park would be developed on land it already owned, east of the landfill and north of Shun Pike, thereby returning that property to the Johnston tax rolls.

But Resource Recovery also began looking to develop land that it didn’t own, south of Shun Pike — land that was already generating property tax revenue.

Some of that land was owned by the cousin of William Macera, who in 1998 was elected mayor of Johnston.

THE SON OF a pig farmer and trash hauler, William Macera had been a priest and a college teacher and done some real estate development before becoming mayor. His family had been intertwined with land in the town for three generations.

His grandfather, Mauro Macera, came to America from Italy in 1905 and settled in the Simmonsville area of Johnston, where he built a farmhouse on what would become Macera Farm Road. William spent most of his childhood on the family farm. In the 1950s, his father, Ralph, and uncle, Anthony, went into pig farming, building the largest operation in New England with more than 4,000 pigs.

Later, the brothers got out of pig farming and started a trash-hauling business. The company was located on land south and west of what is now the intersection of Shun Pike and Route 295. The Maceras dumped trash in a 10-acre pit at the back of the property, where they had once disposed of pig manure. In 1974, William Macera’s parents transferred their share of the dump property to Anthony Macera and his wife, according to Johnston real estate records.

The old dump is listed today on maps as the “A. Macera Landfill.” According to state records, the dump closed in 1976.

In 1977, the dump was cited for failing to meet proper cover and termination requirements for closure, according to records at the Rhode Island Department of Environmental Management.

In 1987, after residents’ complaints of daily illegal dumping, Anthony Macera and his company signed a consent decree with the DEM that prohibited dumping. Complaints of continued illegal dumping persisted, the DEM reported. During one DEM inspection, which Anthony and his son Gerald attended, the elder Macera balked at digging up an area he said had been covered for at least two decades; inspectors persisted and found more recent waste.

In 1990, inspectors found two rusted 55-gallon drums of waste oil. In 1991, the DEM responded to a fire at the landfill, in a spot “where cover material had recently been applied.” Later, inspectors took soil samples and found auto fluff with PCBs, and concentrations of arsenic, lead, mercury and zinc. In 1994, the DEM cited more evidence of recent illegal dumping. In the mid-1990s, both the DEM and the federal Environmental Protection Agency urged further study to determine the extent of the contamination and how to address it.

Those environmental questions had yet to be resolved when Resource Recovery began considering the Macera dump property for its proposed industrial park.

EARLY IN 1999, a broker for the Macera family sent Sherry Mulhearn a proposal to sell Resource Recovery 36 acres on Shun Pike near Route 295, including the A. Macera dump. Anthony Macera had died, leaving the land in family trust, and his son Gerald “Jerry” Macera was handling the negotiations.

The broker, Albert G. Brien, wrote Mulhearn on March 30 that Jerry Macera wanted $7.8 million.

That same week, at a luncheon of town business leaders, Mayor Macera spoke in favor of changing the local zoning law to facilitate the industrial park.

The proposed zoning change, which greeted the new mayor as he took office in 1999, was highly unpopular in Johnston. Angry residents had flooded town leaders with phone calls and letters in opposition.

The landfill was a bad neighbor, they complained. After living with the smell and disruption of the dump, residents fretted that the town would lose control over what other types of unhealthy industries might go into the park.

Resource Recovery countered with newspaper ads. We’re not a faceless corporation, protested Mulhearn. The park would bring good jobs and $1 million a year in new tax revenue to Johnston. Ferland said it would be environmentally friendly.

The mayor, William Macera, stood with Resource Recovery.

“You can’t build houses around New England’s largest dump,” he told the business leaders. “That land will go back on the tax rolls, [and] the off-ramps will make it easy-access.”

That same week, the mayor penned “An Open Letter to the People of Johnston,” urging them to support the zone change.

“The benefits to the Town are more than self-evident,” wrote Macera. “If you are in favor of receiving over a million dollars in additional tax revenues at no cost to the taxpayer; and if you want most of the truck traffic off Plainfield Pike, then I urge you to contact your council person. … It is your Town, I encourage you to make your voice heard.”

Macera knew of his cousin’s efforts to sell Resource Recovery the family land for the industrial park, according to Brien. The two cousins are very close. When Jerry’s young son had died in 1990, William helped him through his grief. And when William ran for mayor, Jerry was there to help, according to a campaign profile in The Journal in 1998.

Brien says Jerry introduced him to William in 1998, and that the three of them would occasionally have lunch together after William became mayor. Among the topics they’d discuss: what was going on with their respective properties on Shun Pike. Later, at Jerry’s request, Brien says that he helped William Macera sell his property, the parcel that contained the wetlands.

David Iannuccilli, William Macera’s broker, recalled the mayor citing the sale of his cousin’s land when they were negotiating with Resource Recovery.

The recent preliminary audit faults William Macera, who left office at the start of 2007, for a possible conflict of interest for not revealing in his open letter to Johnston residents that “members of his own family would benefit through land sales.” Nor, the audit said, did Macera’s letter, which spoke of returning tax-exempt Resource Recovery land to the tax rolls, indicate that private land would be temporarily removed from the tax rolls.

In a recent interview, Brien pointed out that the state ethics law governing conflicts of interest applies to a public official and his or her immediate family –– not first cousins. William Macera’s wife, Maureen Macera, who is the superintendent of schools in Woonsocket, also scoffed at the accusation of a conflict, saying that her husband “has no fiduciary relationship to Jerry.”

Jerry Macera said he doesn’t recall the lunches with Brien and the mayor. William Macera initially agreed to be interviewed for this story, then referred questions to his wife. He said that he has a brain tumor, which first appeared in 1996, that impairs his memory.

IN MAY 1999, the Johnston Town Council rejected Resource Recovery’s request for a zone change for the industrial park.

But that wasn’t the end. That fall, Mulhearn wrote a memo mapping out a legal strategy to force the town to come around quickly, including the threat of a lawsuit.

Meanwhile, members of a citizens group fighting the industrial park wrote to Mulhearn regarding a rumor: Was Resource Recovery negotiating to buy property from Mayor Macera? The matter, wrote residents Christine and Thomas Buttner, “could have some effect on the surrounding homeowners and businesses in the west end of Johnston.”

Mulhearn sent a handwritten note to an aide, asking him to “look into this and begin to formulate a response.” But, she added, “I don’t want to speak to Jerry’s land deal.”

On Nov. 30, Mulhearn wrote the Buttners that the agency was not currently involved in any negotiations with William Macera, though before he became mayor he had offered to sell Resource Recovery some land. She didn’t mention “Jerry’s land deal.”

Meanwhile, talks were progressing between Mulhearn and Al Brien regarding Jerry Macera’s family land.

In August 1999, a private engineering firm hired by Resource Recovery had given Mulhearn a written environmental assessment of the old Macera dump. The report noted “issues of environmental concern,” specifically “the presence of buried waste materials and elevated lead levels in groundwater.”

At Resource Recovery’s request, engineers from GZA GeoEnvironmental of Providence performed a preliminary evaluation of the feasibility of removing or capping the waste, so that the agency could “reclaim” as much of the land as possible for the industrial park. The engineers estimated that it would cost $600,000 to cap the landfill. State environmental rules severely restrict any building on top of a dump because of the danger of toxic gases from decomposing waste leaking in and poisoning workers.

But capping the dump would mean that the land couldn’t be built on. To build on the old dump, the old waste would have to be excavated and dumped at the Central Landfill –– at an estimated cost of $6.7 million, the report said.

On March 14, 2000, Brien wrote Mulhearn that the agency’s last offer was not enough — Jerry Macera still wanted $7.8 million. And he needed an answer soon, Brien wrote, because he had other “development opportunities.”

Mulhearn discussed the offer with John J. Bolton, then a lawyer with Tillinghast Licht, which had been hired by Resource Recovery to assist in land acquisitions for the industrial park. Bolton sent her a revised purchase offer of $6 million, and wrote that he had made other “significant” changes to the deal, as requested. (Bolton said in a recent interview that he handled the closing, but was not involved in any of the substantive negotiations.)

Bolton wrote Mulhearn that, based on their discussion, he had changed the proposed purchase-and-sales agreement so that Resource Recovery would assume responsibility for addressing “environmental conditions,” at an estimated cost of $600,000. Mulhearn sent it to Brien, noting that the changes had been made “to reflect the concerns you expressed.”

But that $600,000 figure may have been low. According to March’s preliminary audit, Resource Recovery estimates today that capping the dump would cost about $1 million — $600,000 for materials, plus labor.

Furthermore, Resource Recovery ignored GZA GeoEnvironmental’s recommendations to do additional environmental study. The engineers had not studied the northern part of the property, which contained businesses owned by or leased from the Maceras. Those businesses, the report said, included a body shop, truck-painting garage and construction company that “are anticipated to utilize hazardous materials … including engine and hydraulic oils, detergents, paints, solvents and thinners.”

“We recommend that a Phase II environmental site assessment be completed on the upper portion of the parcel before its purchase,” the engineers said.

There is nothing in Resource Recovery’s files to indicate that such an assessment was ever done, according to a memo written in conjunction with the current audit.

On March 28, 2000, Mulhearn sent Brien the corporation’s new proposal to buy the land for $6 million.

“At long last,” she wrote, the Resource Recovery board had authorized her and Ferland “to negotiate the acquisition of this property.”

The sale closed on Nov. 10, 2000. Resource Recovery paid $6 million.

Resource Recovery paid $163,000 an acre for the property, the current audit notes — a price that would have been consistent with other area land prices “assuming the land was usable.” But because of the dump, not all of the land was usable. And auditors could find no appraisals or any information “regarding the value of the property.”

“Serious environmental issues do exist” that will require “substantial” cleanup costs, the audit concluded.

Use of the land was also hampered by two large Cox Communications transmission towers in the center of the property, on a parcel that Anthony Macera had sold years earlier. Brien said that the Maceras later regretted allowing the towers, because it limited the value of the surrounding property.

Resource Recovery considered moving the towers, according to current executive director Michael O’Connell. But the agency abandoned the idea after receiving an estimate that it would cost more than $2 million.

Despite the issues with the property, Jerry Macera says today that Resource Recovery “got a good deal.”

Macera said he had several commercial tenants and was collecting more than $200,000 a year in rent. Before selling to Resource Recovery, he said, he had received “numerous letters of interest” from private parties.

Why, then, didn’t he sell it for more money to a private buyer, if he could have? Macera said that it was because he wanted to keep peace in his family, since the land was owned by a family trust.

“I’m an independent person — I don’t want partners,” he said. “It’s also better for family harmony … that the family can sit together at Thanksgiving.”

EARLY IN 2001, a few months after buying Jerry Macera’s land, Resource Recovery was in discussions with broker Al Brien regarding William Macera’s 67 acres about two miles west on Shun Pike, next to the Central Landfill.

For years, the mayor had struggled to develop the land. Since 1998, he had been trying to sell it. Resource Recovery had rejected his proposal to buy it. And in 2001, the taxes had soared to $39,000 because of a townwide property revaluation.

The mayor and his wife owned the land with his sister and her husband. His father, Ralph, and uncle, Anthony, had bought the land –– 67 acres laced with streams and wetlands –– in 1969, according to town records. Later, the mayor’s parents had taken sole ownership and transferred it to their two children in the late 1980s, according to town records.

In 1990, William Macera applied for a permit from the DEM to alter wetlands, hoping to develop what he named the Tower Hill Industrial Park. But the DEM objected and the plan stalled. In 1996, the DEM agreed to a scaled-back plan requiring the construction of two bridges across wetland areas.

The cost of the bridges made developing the land prohibitive, Macera family members and their real estate brokers said in interviews with The Journal. That, plus the property taxes, prompted them to try to sell it, said Maureen Macera, William’s wife.

David Iannuccilli, the Maceras’ broker, said he listed the property for sale in 1998. Since Resource Recovery would prefer to control land adjacent to the landfill, rather than have it fall into the hands of a private owner who might create legal hassles, Iannuccilli said, he always felt that the agency would be the most logical buyer.

But when the land was offered to Resource Recovery, said Iannuccilli, the agency said no thanks. That is reflected in the letter that Sherry Mulhearn wrote in 1999 to the citizens asking whether the agency was negotiating with the mayor. Macera had offered his land prior to becoming mayor, wrote Mulhearn, “but no further action has taken place.”

The Maceras and Resource Recovery started talking again in 2001.

In February, the mayor and his family filed an application and plans for a subdivision with the Johnston Planning Board, hoping to sell two acres on Shun Pike, at the front of the 67-acre lot. Later that month, Brien wrote to Sherry Mulhearn regarding their “recent discussion” and sent her “the requested plans.”

John Tzitzouris, Macera’s brother-in-law and a co-owner, told The Journal that a construction company was interested in buying the two acres to store equipment. When word got back to Resource Recovery, he said, the agency “expressed interest in buying the whole piece.”

In the spring, the Planning Board approved the subdivision. The mayor, who appointed the board members, attended one of the meetings, to provide “historical information,” said Tzitzouris, who also attended.

Meanwhile, Resource Recovery’s fight with the Town of Johnston over the proposed industrial park had moved from the Town Council, which had rejected the zoning change two years earlier, to the General Assembly. In 2001, Resource Recovery sought legislation eliminating the need for local zoning approval for the industrial park.

The legislation provoked an outcry from Johnston lawmakers, and unanimous opposition from the Town Council.

But not from the mayor.

On May 1, 2001, Macera wrote to then-House Speaker John B. Harwood: “I wholeheartedly support this important legislation.”

He sent a copy to Sherry Mulhearn.

The legislation passed. In July, Macera gave Resource Recovery permission to inspect his property and Mulhearn hired a private engineering firm to assess the land. The engineers’ report to Mulhearn, on Aug. 28, 2001, concluded that “the high silt content of the soil” rendered it “unsuitable” for use as cover material.

On Oct. 27, 2001, Brien sent a copy of the engineering report to broker Iannuccilli.

“Given that the test results restrict the corporation’s interest,” wrote Brien, “it perhaps might be prudent to allow the [property] continued exposure to the market at this time.”

But six weeks later, on Dec. 10, Brien wrote Iannuccilli to alert him to “an interesting meeting today” with Mulhearn. She was now offering to buy the land — for about $2 million.

The deal closed in April 2002.

Last year, when questions first arose concerning the deal, Mulhearn said in a statement to The Journal that part of the agency’s interest in the property was the soil that could be excavated and used to cover trash at the Central Landfill.

Resource Recovery’s operations “require much soil — for cover, roads, construction, capping,” Mulhearn wrote. “The value of the excavated soil [on the Macera land] is $5.6 million.”

Mulhearn did not say where she came up with the figure of $5.6 million. When she hired the engineers to assess the land in 2001, she asked them to study the composition of the soil, not to calculate how much was there, according to their report.

Ironically, while they were waiting for the closing on the deal with Resource Recovery, the mayor and his family were appealing to the Johnston tax assessor that their property had been valued too highly — because it contained wetlands.

A townwide property revaluation had raised the assessment of the Maceras’ land from $212,000 to $1.6 million, hiking their annual tax bill from $5,700 to $39,000. Macera argued that the value was too high because 20 of the 67 acres were wetlands, according to tax assessor records.

In January 2002, the Town Council lowered the assessment to $1.2 million.

Three months later, the mayor and his family sold the land to Resource Recovery for $2 million.

At the mayor’s request, the checks from the sale were sent to him at Johnston Town Hall.

MAUREEN MACERA bristles at suggestions that her husband behaved unethically.

The land had been in his family for years, she said. “This isn’t some piece of property that we bought and then flipped.”

Shortly after the sale, William Macera told The Journal that he checked with the Rhode Island Ethics Commission because of his official dealings as mayor with Resource Recovery. He said then that he had received a verbal opinion from the commission that the sale would not violate any ethical rules. And he added that he was awaiting the commission’s written opinion.

Peter Mancini, the ethics commission’s deputy chief investigator, said recently that there is no record of Macera ever seeking advice about the land deal. Mancini said the commission does not issue verbal opinions and it did not issue a written opinion to Macera.

Today, the land sits unused and off tax rolls. Mulhearn, in her written statement to The Journal last year, indicated that Resource Recovery had “longer-range” plans for the property, and that when the time was right, the agency would apply to DEM for a wetlands-alteration permit to excavate cover material.

But an engineer with GZA GeoEnvironmental casts doubt on that, writing to new executive director Michael O’Connell earlier this year that the corporation cannot build access roads on the property “due to the extent of the wetland areas.”

According to O’Connell, Mulhearn did not consult with Resource Recovery’s chief staff engineer before buying the mayor’s property.

Two miles east on Shun Pike, construction equipment is visible in the industrial park, completing a Federal Express trucking warehouse and a distribution center for a Pennsylvania trucking company, A. Duie Pyle. But given the high acquisition costs, Resource Recovery lost money when it sold that land — and that is considered the best land.

Meanwhile, the old Macera dump property across the way remains vacant and on the market. State environmental regulators await a cleanup plan.

A new road runs beside it, built by Resource Recovery and named Austin’s Way, for Austin Ferland. Although Sherry Mulhearn presented the road sign to him as a tribute when she left the agency at the end of 2006, the metal street-sign poles remain bare.

The recent preliminary audit faulted Resource Recovery leaders for failing to study the economic feasibility of the industrial park before buying and developing the land. Charles Francis, the broker marketing the park for Resource Recovery, says the green industries that Austin Ferland envisioned didn’t want to be so close to New England’s largest dump.

“We offered it to many potential users, but they rejected it,” said Francis. “Austin had a great vision, but one that was unrealistic.”

mstanton@projo.com