Years after spending millions of dollars on an environmental clean-up of coal tar near the city's downtown core, Kitchener could be on the hook for even more.

The clean-up left Victoria Park with a beautiful new entrance but ran millions of dollars over budget, and now one of the groups impacted is looking for compensation.

At the time CDI College was located in a city-owned building right near the corner of Charles and Gaukel Streets.

And that was the centre of the clean-up of a 60,000 tonne mess of smelly toxic sludge left behind by a former goal gasification plant.

Students who had paid thousands in tuition were left complaining about the smell, and feelings of dizziness and nausea.

Now known as Everest College, the school is suing the city for $800,000 plus interest and court costs.

In a statement of claim obtained by CTV News, lawyers for the college say the clean-up generated "significant negative publicity" due to the "toxic nature" of the substances.

It also suggests that as a result the school's enrollment declined to the point where the college lost nearly half-a-million dollars.

CTV News has learned that councillors met Monday night in a closed session to discuss the lawsuit and a potential settlement, but no one would comment on Tuesday.

The issue dates back to the late 1800s when a city-owned gas plant created electricity by burning coal. The by-product, coal tar, was then buried and ignored for a century.

While the clean-up cost was initially pegged at several million dollars, midway through it spiralled to nearly $30 million.

That's also when the college started having problems. It eventually shut down for two weeks and a lawsuit was filed in April 2009.

It's unclear why it has taken so long to deal with or what the city has spent to fight it.

The lawsuit is related only to the inconvenience of the mess and the impact on the school's business, not health concerns.

Air quality tests at the time found there was no risk to health, though the fumes made students feel ill.