As city officials sat down last week to review bid proposals for the historic diesel power plant, City Manager Jim O’Connor got straight to the essence of the issue.

Essence, as in odor.

The place reeks of diesel fuel that for six decades drove its mammoth generators. Under the one engine remaining in the plant, everyone has always expected diesel contamination. Now, it turns out, there’s trouble on the outside, too.

Despite years of environmental cleanup that finally earned the city a notice of ‘no further action required’ from state environmental authorities in November, new soil and water samples taken around the plant’s exterior revealed unacceptable levels of petroleum-related compounds.

The results are from two environmental engineering firms. One set of results, showing generally higher levels of contamination, was from a firm hired by B-B Redevelopment, the holders of the lease on the property from 2001 until this past November. B-B was required to do the environmental testing when it returned control of the diesel plant back to the city in a court-approved stipulation in its long-running suit with the city.

The city’s firm found somewhat lower results, but still above Florida Department of Environmental Protection clean-up target levels.

The tandem results, immediately forwarded by email to bidders on the property, came in less than a week before the bids were due. In the three proposals submitted, all made mention of contamination. But only one, Michael Rechter’s bid to build a craft brewery, offered to accept responsibility for the problems in exchange for a reduction in the purchase price – $150,000 less.

Until now, the chief concern of city officials was viability of the project and the betterment of downtown. Now the prospect of clean-up and monitoring expense appears to be a key factor in deciding who will occupy the downtown landmark.

Environmental clean-up at the site has been an albatross for the city for more than 20 years. It was a critical element of the 45-year lease the city signed in 2001 with B-B Redevelopment, the company of Vero builders Phil Barth and David Croom. In the lease, the start date for rent on the building was tied to completion of the cleanup.

The pair has been suing the city for fraud since November 2013, saying the city misled them into believing the cleanup was over when it wasn’t. That suit prompted a countersuit by the city for past rent of $70,000, alleging the builders could have started building while a state-sanctioned plan to let nature take its course cleared the remaining contaminants to acceptable levels.

Not until 2013 did the monitoring wells finally show those acceptable levels, and the city received the paperwork to show the clean-up was complete.

That good news seems to have vaporized with the latest test results.

The earliest notes of contamination date back to 1991. But it likely started in the 1920s, when the plant was built next to the railroad tracks, just off what is now eastbound 19th Street. Fuel reached the plant by train, delivered to tanker cars on a rail siding just east of the site. From there, it was transferred to two 10,000 gallon underground tanks built of concrete, and two above-ground steel tanks. When rail deliveries ended, the plant got its fuel from tanker trucks via fuel port connections off 12th Court, adjacent to the site, and from there to the above-ground tanks.

Anywhere along the way, fuel could either have spilled or leaked, experts postulated.

Those underground tanks were taken out in 1996, and soils around them were removed. So was soil around the fuel port off 12th Court, and along the underground pipe pathways used to get the fuel to the storage tanks.

Petroleum hydrocarbons weren’t the only problems: There was asbestos, lead in the old paint on the walls, traces of arsenic near a mixing tank for water used to cool the engines, PCBs where some transformers were stored, and enough pigeon droppings to open a guano business.

All of it had to go, or at least enough to get the levels down to state and federal standards. The city spent more than $300,000 remediating the site.

Finally, four years into B-B’s lease, a 2005 letter to Barth by the city director of utilities said the city had “completed all of the requisite remediation activities,” and that while they were required to “continue to monitor certain wells at the site,” there was no reason not to start building.

Turns out, the “monitoring” was a two-year “natural attenuation monitoring plan.” If at the end of the monitoring period, the levels of contaminants were acceptable, the city would get a “No Further Action” declaration.

In 2007, though, there were still problems. Even in 2010, one stubborn well continued to show levels nearly four times higher than allowed.

Finally in March 2013, the three wells identified for monitoring all showed levels below the state’s clean-up targets.

With state objectives met, the clean-up could cease – unless there was another petroleum spill, or if the levels in the soil or groundwater somehow rose again.

Somehow, the levels rose again.

Engineers say the rise could happen as contaminants seep through the soil or water, or through differences in methodology, or simply an anomaly: not every bit of soil or water has been tested on the site.

The November tests weren’t out of the blue. Croom and Barth were required to re-test when the lease ended. That month, in the midst of litigation, a court-approved stipulation returned the building to city control.

Meanwhile, the brick behemoth has sat empty.

Barth and Croom’s $1 million in major renovations notwithstanding, the diesel plant became all but invisible to longtime residents blowing through the downtown.

But a few newcomers saw it with fresh eyes. One was Guy D’Amico, a Coral Springs resident who drives past it on the way to the oceanfront lot on which he is building a home. He wrote a letter back in 2013 expressing interest in buying the plant and turning it into a craft distillery.

A second bidder, Michael Rechter, a recent arrival from Fort Lauderdale who has been buying up Vero commercial property, envisions a craft brewery there.

And Ross Power, a sculptor and developer who moved here from Miami, and who was aligned with the Cultural Council’s proposal to turn the plant into an arts center, now wants to do something similar on his own.

As for that essence in the plant, the diesel smell, “That could be a point of negotiation with a prospective buyer,” says City Manager Jim O’Connor. “The term ‘clean bill of health’ will also be an issue that will need to be defined if it is something a buyer wants as a term or condition of sale.”

O’Connor called the problems “minor,” and estimates a cost of $30,000 to the city.

So far, only Rechter has offered to let the city off the hook with an “as is” offer – $150,000 lower than his on-the-hook offer. “I thought that might solve the issue for the city once and for all,” he says. He called the new findings of contamination “remnants from the pervasive issues already remediated” and anticipates having to implement state required monitoring programs for up to five years.

“Nobody wants it on a site,” says Sarah Whitaker, owner of SMW Geosciences, the city’s consultant on the project. “But unless somebody’s eating the dirt there, or drinking the groundwater, it’s not anything that’s severe.”

The city’s review committee will meet next week in private with the bidders to hear their proposals and further discuss the clean-up.