Re: [CPEO-BIF] Scope of Brownfield Program-continued

This is an interesting - and, from I have been able to discern as an observer of Brownfields related trends in this country, quite timely and relevant - discussion currently taking place in many American states and communities. My friend and colleague Larry Schnapf rightly points to what is likely to be a roiling debate in NY (and elsewhere) about the proper scope and use of financial incentives in incentivizing cleanup, redevelopment, and reuse of contaminated sites. Recommended reading in this regard is Destiny USA Development, LLC v. New York State Department of Conservation, Index No. 08-1015 (May 7, 2008), where the court wrote in highly unflattering terms about the state regulatory agency's decision to substitute its own judgment for Brownfields related economic policy created by the legislature and deny a developer's access to critical and critically needed tax incentives. I've attached a copy of that decision to this email (although I'm not sure that it will be transmitted successfully to the distribution list; if it doesn't come through, email me and I'll forward it to you). Here in Florida, where an anemic array of financial incentives is about to come into sharp focus due, in large part, to an avoidable exhaustion of an annual tax credit allocation for voluntary cleanups, several local governments are looking to, in the view of some critics, "game the system" by designating hundreds if not thousands of acres of land "Brownfield Areas" in order to tap into a state based tax refund (as opposed to tax credit) program tied to the creation of new jobs on impaired sites. Due to the very loose language in the underlying statute that authorizes such designations, Brownfield Areas in Florida can - and often do - incorporate multiple parcels with absolutely no actual or perceived impairment from historical or current incidents of contamination. For more on this, see http://www.tcpalm.com/news/2008/jun/29/brownfield-overly-large/.

All that being said, and, again, I'm speaking from a perspective that was formed in the crucible of the American Brownfields movement (and freely concede that the European model may be quite different), here - and Florida in particular - contamination is far from a "minor irritant" and CERCLA (and its state and local counterparts) is, at best, unwieldy to fully "deal with large, unacceptable, risks to human health and the environment." With respect to the former (contamination being a "minor irritant"), contamination is, firstly, a hugely upsetting dynamic in real estate transactions and development activities. Where to start? It ferociously disrupts - and makes grossly more time consuming and expensive - financing, even with the secured creditor protections that are now available (sort of) at the federal level but which likely have no applicability at the state or local level. And, in today's financial environment, where the credit markets are locking up tighter than the proverbial drum, the specter of contamination (actual or potential) looms larger than ever before. Secondly, as regulators become more involved in and sophisticated about the nuts and bolts of development and construction and achieve a much deeper understanding of the implications of construction activities and the way in which contaminated media may be displaced, disturbed, exacerbated, and transported (and all of the various exposure scenarios that result from same), new rules and requirements and mandates are imposed that create additional costs for, and schedule and design burdens on, development projects. (As just one example of how long-accepted norms of development and construction become newly and acutely burdened by evolving understandings of the behavior of contaminated media in the environment, see EPA's excellent, recently published guidance document:Vapor Intrusion Considerations for Redevelopment Primer, which can be accessed at http://www.brownfieldstsc.org/pdfs/BTSC%20Vapor%20Intrusion%20Considerations%20for%20Redevelopment%20EPA%20542-R-08-001.pdf) Thirdly - and not to be downplayed or de-emphasized in any way by its placement in this litany - is the public health imperative posed by and created by contamination. And there is much to say about this too. Whether the location is a city, town, or village in America, Europe, South America, the Caribbean, Africa, the former Soviet Union, or elsewhere (spin the globe and place your finger anywhere; all Brownfields are local), contamination is not a minor irritant to those who have been continuously exposed to it in their air, in their water, in their soil - we could go on. The public health threat dynamic creates special concerns and obligations for Brownfield developers. Special concerns and obligations in terms of how to quickly extinguish - and then treat - the exposure. Special concerns and obligations in how to evaluate - and then manage - the cost risk and legal liability risk associated with the exposure. Special concerns and obligations in how to reach out to - and then embrace - those impacted by public health and public health injury issues (not only those directly impacted but their families and their friends too). For an excellent meditation on these public health issues, see "Poor, Black, and Dumped On," by the brilliant essayist Bob Herbert in the New York Times ("The evidence has been before us for decades that black people, other ethnic minorities and some poor whites have been getting sick and enduring horrible deaths from the filth that they breathe, eat, drink, and otherwise ingest from the garbage dumps, landfills, incinerators, toxic waste sties, oil refineries, petrochemical plants and other world-class generators of pollution that have been deliberately and relentlessly installed in the neighborhoods where they live, work, worship, and go to school."): http://select.nytimes.com/2006/10/05/opinion/05herbert.html?_r=1&oref=slogin

I'm going to come back to the Bob Herbert essay in a couple of paragraphs because it really underscores the point that Larry was making and that I feel many in the Brownfields community also embrace in terms of championing special economic incentives for Brownfield projects that shouldn't be drawn down on for other revitalization projects that lack a contamination component (and contamination imperative). But first, there is one other point - and it's a fair point - that Paul raised that I feel needs to be addressed: that CERCLA is "designed" and therefore, perhaps, equipped, to "identify and deal with large, unacceptable, risks to human health and the environment." Twenty five years worth of experience in this country with CERCLA - and all of the litigation, process, waste, posturing, drama, and heat associated with its implementation and enforcement - have taught us that CERCLA alone is an imperfect vehicle as a catalyst for cleanup, redevelopment, and reuse. Certainly in terms of launching a cleanup-to-redevelopment-to-reuse continuum that works as a linear narrative, CERCLA is, much more often than not, the anti-catalyst and, instead, operates to ensure that the continuum stays mired in first gear while the regulators and lawyers have at one another.

What CERCLA - in my experience - brings into stark relief is this: that the power of the private sector in partnership with public sector based incentives is a truly awesome and truly catalyzing force for cleanup and redevelopment. As ineffective and outmoded as CERCLA has proven itself to be to move businesses, communities, lenders, investors, individuals and other stakeholders to take up the brutal, laboring oar of cleanup, the Brownfields paradigm has proven sublime. Many billions of dollars in capital all over the world have been lured into the impaired property marketplace to remediate contamination, to recycle land, to enhance and sustain communities, and to protect and repair public health. And this vast movement of capital has occurred on its volition - without any legal obligation and without the threat of enforcement - simply because market conditions were rightly set by policy makers and law makers who primed the pump with an impressive and diverse portfolio of financial and (not to be overlooked) regulatory incentives.

So, getting back to Larry's point, whether the incentive is state based, federal based, or local in nature, if it has been created to promote the cleanup, redevelopment, and reuse of contaminated sites - in all of their glory and gory - there is an economic and public health imperative that those (very limited) dollars remain targeted for Brownfield sites. The "generators of pollution," about whom Bob Herbert writes and whose legacies of filth exist in neighborhoods all over the world (although most insidiously in communities where ethnic minorities and the poor live, work, worship and go to school), have succeed in creating revitalization challenges of epic and truly demoralizing proportions. These challenges, in turn, require financial tools that are meaningful, overwhelming, inviolate, and not susceptible to being diverted or diminished.

Larry's bottom line from his initial post is the central theme here: "[I]n states with limited funds, brownfield programs should not be used to fix what is often times an underlying economic problem." I'll add to that this implied corollary: Where Brownfield programs exist, they should remain squarely focused on exclusively allocating much needed dollars to sites where market impairment, economic dysfunction, and public health insult all stem from environmental contamination. The contamination imperative (anything but a minor irritant) and the operative shortcomings of CERCLA and its state and local counterparts (a structure predisposed to litigation not recycling) underscore the place and critical need for targeted, precise financial incentives as a mechanism to move private capital into environmental cleanup and environmental redevelopment and the reuse that results from both. This critical need is now being played out in Michigan (where we started with this post on Wednesday), in New York, soon in Florida, and I suspect, simultaneously, in many other places across our spinning Brownfields planet.

Respectfully submitted,

Michael

Michael R. Goldstein, Esq.

Akerman Senterfitt

One Southeast Third Avenue, 28th Floor

Miami, FL 33131

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"Recycle, Reuse, and Restore Environmentally Impacted Properties: Rebuild Your Community One Brownfield at a Time"