2007 CPEO Brownfields List Archive

From: LSchnapf@aol.com
Date: 31 May 2007 06:54:58 -0000
Reply: cpeo-brownfields
Subject: [CPEO-BIF] BCP Data Followup and Self-Directed Cleanups
 
Peter Meyer's makes many interesting comments. we did not ask if the BCP was the primary reason that a particular project went forward because we know that each project has its own confluence of factors that must occur before a project can become a viable real estate market. However, it is fair to say that BCP has  served to accelerate cleanups at some sites process where a developer might have been tempted to implement a so-called "self-directed" cleanup without state oversight. In other instances, the BCP has helped developers decide to pull the trigger on a project in an emerging area because the BCP would help to minimize some of the risk. There have
 
I have been involved in two sites where several contract vendees walked away and forfeited their deposits because of the uncertainty over the cleanup costs and the complexity of the cleanup. My clients eventually were willing to take on the risk but this was after a long process (in one case nearly 18 months) of hand-holding, explaining, analyzing and answering the minutest of details and concerns about the possible environmental risks. 
 
I do not think Peter's insurance analogy about risks posed by small sites is applicable. The insurers' reluctance to insure the smaller cleanups seems to be more a function of an inability to obtain sufficient premiums to cover the risks. There might be overruns on a $1MM remediation that are unacceptable to the insurer because of the small premium it has charged to take on that risk but those risks pale in scope and magnitude when compared to the risk a developer takes on when environmental costs go from $5MM to $20MM due to unexpected contamination or the complexity of cleanup that jeopardizes a $200MM development.  
 
Finally, I would like to return to the concept of the self-directed cleanup. In my capacity as lender counsel, I have seen an alarming increase in cleanups performed without regulatory oversight in states that do not have licensed environmental professional programs because of concerns over increased costs due to construction delays associated with regulatory review. In my opinion, the environmental reporting system is broken. CERCLA and most state cleanup laws refer to reportable quantities (RQ) in a 24 hour period. However, the vast preponderance of contamination now encountered is a result of historical spills so that it is difficult to determine if there was a release in excess of a RQ. Thus, many developers are advised that they have no obligation to disclose the contamination and the cleanup is done under the radar screen.
 
I think it would be better if Congress and state legislatures required reporting of contamination detected above the most stringent cleanup levels regardless if a certain quantity was discharged or released over a period of time. In that case, more sites would be reported and more quality cleanups would be performed. The marketplace is full of environmental professionals (the so-called "commodity shops") that will be happy to reach any conclusion a client wants if they are willing to pay them to write the report. 
 
In other environmental regulations, EPA has adopted technology-forcing standards for discharges of pollutants into water and air yet when it came to releases of hazardous substances, EPA's seemed to be in a race to find the lowest common denominator when it adopted its all appropriate inquiry rule. I continue to be astounded how purchasers and developers will spend multi-million dollars on projects yet balk at spending several thousand dollars to do an adequate site investigation.
 
To receive liability protection, a property owner should be required to determine if their site is contamination and then at minimum, inform the regulators so the public can be adequately protected. I think we need more stringent reporting and sampling requirements to ensure that sites are being adequately remediated and that property owners are deserving of their liability relief.
 
Larry 
 
   
Lawrence P. Schnapf, Esq.
55 E.87th Street #8B
New York, NY 10128
212-756-2205 (office)
212-876-3189 (home office)
203-263-5212 (weekends)
212-593-5955 (fax)
LSchnapf@environmental-law.net
www.environmental-law.net (website)




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