Clear course: the National Brownfield Association assesses state and voluntary cleanup programs and what works best.
The National Brownfield Association (NBA) has prepared a paper to assist policymakers and other interested parties in better understanding the key elements in state brownfield and Voluntary Cleanup Programs (VCPs) that will attract all stakeholders to participate in the cleanup and the redevelopment of brownfields.
NBA Chapter Executive Teams provided input and the NBA Advisory Board drafted this analysis. Both groups consist of diverse redevelopment specialists who are NBA members and have worked extensively with state programs around the country. The members have also participated in NBA Brownfield Leadership Summits, which are held annually to address this issue.
STATE STARTING POINTS
States began creating brownfield and voluntary cleanup programs in the late 1980s in response to the complexities of the Superfund process and the realization that public funding was not sufficient to address all sites. These programs allow property owners or their designees to voluntarily enter a site into a state regulatory process to complete the cleanup of their property.
The state and the voluntary party agree to the cleanup approach needed to achieve state-specified levels that are "protective of human health and the environment." In the mid-1990s, the United States Environmental Protection Agency (EPA) formally recognized the benefits of the state brownfield programs and VCPs. All states have since moved to some extent to create similar forms of programs.
The federal brownfields law, enacted in 2002 (formally titled the Small Business Liability Relief and Brownfield Revitalization Act), largely recognizes states as the primary regulator for brownfield sites. An important element of the Act was the creation of the federal enforcement bar, which ensures that when a site goes through a state program, the state becomes the primary regulator and the federal government cannot use Superfund enforcement authority over that site.
Upon completion of the cleanup process, the voluntary party receives a document (e.g., comfort letter or no further action letter), which provides some degree of environmental closure and clarity of the party's future liability obligation. In most states, the liability protection does not attach to the responsible party who discharged the substance(s) necessitating the cleanup (even if they have done the voluntary cleanup).
States vary greatly in the way in which cleanups are implemented and the amount of state oversight that is provided. Many states take a traditional regulatory approach, while other states have developed alternative programs. For example, Massachusetts was the first state to privatize a portion of the state cleanup program through the use of Licensed Site Professionals (LSPs).
Overall, state brownfield programs and VCPs have been effective because they foster public private partnerships to promote redevelopment. The EPA has tallied more than 50,000 properties that have been cleaned up using state brownfield programs and VCPs, ranging from small commercial properties (e.g., gas stations and dry cleaners) to large industrial facilities.
State brownfield programs continue to evolve to meet new challenges, but a number of impediments remain. Buyers and sellers are still concerned that the level of environmental liability relief may not be meaningful, and that lingering third party liability issues remain. The lack of liability clarity is causing a number of corporate property owners to hold on to sites.
Another barrier is that, although most states consider planned end use when determining cleanup levels, some do not allow the use of site-specific risk assessments. This causes owners and prospective purchasers to perceive some state cleanup standards as too stringent or inflexible.
These impediments create a situation where cleanups may be technically feasible but not economically viable for redevelopment, and result in developers and investors favoring construction on greenfields. Moreover, state programs are beginning to suffer from the success of the brownfield market; the increased number of sites seeking to enter VCPs and brownfield programs has put considerable pressure on these programs, which causes slower response times, competition for financial incentives and increases the administrative cost of operating programs.
In an effort to address these impediments, states have been innovative in developing unique program elements that work. Although no one "best" program exists that addresses all barriers, the National Brownfield Association has analyzed and identified the key elements that have worked well in different programs. The purpose of this paper is to assist policymakers in better understanding the key program elements that work.
RECOMMENDED PROGRAM ELEMENTS
The NBA has found key program elements that work can be grouped into four general categories: 1) environmental closure and liability clarity, 2) agency resources, 3) cleanup goals, and 4) financial incentives. Highlights of key program elements that were identified include:
1. Environmental closure and liability clarity
a. Programs should maximize liability relief and limit re-openers. Many state programs have "re-opener" clauses if unknown contamination or factual misrepresentation is discovered. However, this has not been tested in the courts and uncertainty to the extent of the environmental liability relief and to whom the clauses apply is still unclear.
b. The process results in a predictable regulatory path to closure that provides for a single point of agency contact and a regulatory process that is easy to follow with defined endpoints.
c. The program is broad-based, with a wide range of sites eligible to participate. Broad-based programs that encompass more redevelopment scenarios and stakeholders generally add consistency and ease the confusion for redevelopment parties.
d. The program provides relief or a legal defense from third-party statutory remediation and tort action after sites are properly closed. Uncertainty of possible third party action restrains property transactions, and some states have started to address the issue this provision provides.
2. Agency resources
a. The state provides agency resources and trained staff dedicated to brownfields and VCPs to provide information and support to a wide range of stakeholders.
b. A single point of agency contact will champion the project to completion and coordinate interagency involvement.
c. The program statutorily or administratively provides for a quick and timely response, within time frames needed for decision-making.
d. Program officials and staff have the capacity to treat the applicant like a "customer" to attract voluntary participation and ensure proper use.
e. The program provides a mechanism that fosters quality information and outreach to the real estate sector, communities, and other brownfield stakeholders.
f. Federal resources given to the state are used to establish, enhance and administer their program. States should continue to seek this support.
3. Cleanup goals to protect human health and the environment
a. Allow a flexible approach to risk assessment that includes tiered cleanup levels based on the planned end use of property. This includes options such as "screening" approaches for simple sites and site-specific risk assessments for complicated sites or those with unusual chemicals of concern. This allows property owners to take advantage of environmentally appropriate, yet cost-effective strategies.
b. Cleanup goals are clear and understandable to all stakeholders to minimize uncertainty and unnecessary conflicts over reuse approaches.
c. Cost-effective innovative remedial technologies or "presumptive remedies" are permitted and encouraged where they will likely lead to protective cleanups with redevelopment cost-saving.
d. Institutional and/or land use controls can be tracked and enforced to protect human health and the environment.
4. Financial incentives to meet brownfield needs
a. Assistance with site assessments can provide financing not available elsewhere to help site owners and prospective purchasers get critically needed information that allows property redevelopment costs to be sufficiently quantified.
b. Help with hard cleanup costs, an activity critical to site redevelopment, is not generally bankable.
c. Incentives that finance demolition of structures, lead-based paint remediation and/or asbestos abatement, as well as offset other site preparation costs (planning, infrastructure, etc.) may be needed to balance brownfield and greenfield redevelopment costs.
d. Creative forms of tax incentives that attract private investment, one of the typical economic development functions of government, can help channel private interest into site cleanup and redevelopment in areas that might not otherwise be economically competitive.
This analysis was prepared by the National Brownfield Association, www.brownfieldassociation.org.
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|Title Annotation:||BROWNFIELDS UPDATE|
|Publication:||Construction & Demolition Recycling|
|Date:||Nov 1, 2007|
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