There's a new sight at Bay Harbor resort, beyond the giant yachts, a golf course dubbed the "Pebble Beach of the Midwest," riding stables, private beaches and huge vacation homes with lakefront views to equal the multimillion-dollar prices.
This year those views are tainted by high cyclone fences and red warning signs lining a quarter of Bay Harbor's five-mile shoreline: "KEEP OUT. Hazardous Materials. Caustic seepage present."
A cleanup just approved by the Environmental Protection Agency will add trenches along the lakeshore to collect toxic ooze from huge underground piles of toxic dust left from an old cement-manufacturing plant. The seepage is flowing from under parts of the resort, sending into Lake Michigan toxic metals and a black fluid that health officials warn can damage skin permanently.
"When you see it for the first time, you do a double-take -- this is Lake Michigan?" said the on-scene EPA coordinator, Ralph Dollhopf, whose previous cleanups include the anthrax at postal facilities in the District.
From Kenosha, Wis., to Cleveland, developers are rebuilding lakefronts from the often-polluted ruins of 19th- and 20th-century industry. The waste-to-riches-to-runoff story of 11-year-old Bay Harbor is a cautionary tale for such "brownfield" redevelopment.
Coastal Ridge Drive, a winding lane of Bay Harbor homes, is also home to what the EPA calls "Seep 2."
A popular public park on the edge of the resort is closed because the Lake Michigan shore tested as caustic as household bleach. An EPA cleanup trailer sits in front of the swing set.
Below the bluffs of the dramatic last hole at Bay Harbor Golf Club, regulators surmised that little plant or insect life can survive on several hundred feet of shoreline through which toxic runoff flows.
One of the partners in the resort construction, CMS Energy, has pledged $45 million to stop the leakage thought to have been contained years ago, though no one is sure how much it will cost for the cleanup demanded by the EPA.
"It's a mess -- it's put a hell of a stigma on Bay Harbor," said Myron Patten, a retired radio station owner whose mansion is fenced off from much of its 600 feet of shoreline.
Along with CMS Energy, Bay Harbor developer David V. Johnson acquired a controversial sign-off from Michigan environmental regulators. They approved the project in 1994 without a full study or cleanup of four large piles of cement kiln dust -- enough to take up an entire landfill. The developers built a drainage system for only the largest of the four piles.
The resort then grew into paradise at an astounding pace.
In 1998, as the first of more than 500 tony Bay Harbor residences reached the tax rolls, the city of Petoskey's overall property value increased 40 percent. Property values at Bay Harbor have tripled since then, though some owners say the pollution stigma is hurting the resale market. Bay Harbor taxes now fund more than half of the municipal budget in this city of 6,000 year-round residents in the northwest corner of Michigan's lower peninsula.
But early last year, the pipes clogged in the collection system designed to keep the seepage from the largest dust pile out of Lake Michigan. In a flyover of the resort, regulators noticed black plumes extending 50 feet into the lake in spots. Chemical tests confirmed the toxic seepage -- millions of gallons of it -- created as water flows through the dust piles and into the lake. Health warnings and shoreline closures quickly followed.
Property deeds noted the existence of the cement dust and said it was the subject of "closure activities" approved by the state. Beyond that, it was up to each Bay Harbor buyer to do due diligence, said Johnson, the developer.
Confident the seepage will be cleaned up and buoyed by several dozen additional resort homes under construction, Johnson and many residents play down the problem.
"Life has never been better at Bay Harbor," Johnson said.
The shoreline in front of Marilyn Crawford's summer retreat remains open, though there are stretches of closed beach and seepage east and west of her.
"We don't see the need for eight-foot-high chain-link fences and biochemical suits," she said. "It's not like there is radiation in there."
Others are jittery.
Jason Hockett, a car dealer from Indianapolis, said he listed his vacant lot in Bay Harbor for sale in mid-2004 for $290,000. The cul-de-sac in front of his property now is fenced off, with caustic seepage on the shoreline right below.
"I haven't had a call in a year," Hockett said. "I hear from my [real estate] agent that Bay Harbor is as cold as ice."
The cleanup will take years. It started this spring with workers in white protective suits vacuuming the shoreline. The puddles rose again in a matter of minutes. The new trenches will collect seepage that will be hauled to a disposal facility.
Meantime, engineers are mapping the seepage and will design permanent solutions that might include large pumps, underground walls to divert groundwater around the buried dust piles, or waterproof caps over the cement kiln dust below part of the golf course.
Many Great Lakes towns have an industrial legacy likely to be remade in this tourism age, said Joe Dufficy brownfield expert with the EPA in Chicago. "There are always going to be some developers who miss stuff" during environmental cleanups, he said. "I don't think it will ever be foolproof. But 97 percent of the time or better this is going to work, and work really well."