I feel compelled to re-enter the dialogue to offer this
observation: In many communities (and many markets) across the country,
there appears to be a subtle yet very real counter-dynamic at work that reflects
a willingness of private investors and their capital to move towards
stigma as opposed to away from it. We have clients - and I'm
sure that many others on this listserve do as well - that use the Brownfields
designation or the Superfund status of a site, property assemblage, corridor, or
region as initial screening criteria to identify potential
deal opportunities that they may want to pursue and acquire. So
. . . if one party's stigma is another party's potential value proposition, is
there really any stigma at all? And in terms of trying to empirically
quantify the actual monetary discount purportedly related to stigma, if there
are parties - in fact if there is a whole industry - willing (eager) to close,
cleanup, and redevelop a given site, again, is there really any stigma at
all?
Perhaps stigma, in this light, doesn't really mean what we
think it means. Perhaps it should be redefined to simply refer to those
parties who lack the knowledge, ability, and risk tolerance to properly
underwrite cleanup and construction premiums related to contamination and then
identify, structure, and manage risk and liability properly. In this
sense, maybe stigma is not a "thing" to be quantified, but a "state of mind" to
be understood and put in context.
I don't know the answers to any of these questions, but I
do know this: There are plenty of folks out there who, when they hear a site is
a Brownfield or on the NPL, not only do they not run the other way, their
response is, "fantastic, tell me where it's located, what I can do with it, and
what the asking price is."
Put another way, for an increasing number of
parties the Brownfields or Superfund status of a site isn't an alarm bell,
it's the dinner bell.
-M
Michael R. Goldstein, Esq.
Akerman Senterfitt
One Southeast Third Avenue, 28th
Floor
Miami, FL 33131
Direct Line: 305.982.5570
Direct Facsimile: 305.349.4787
Mobile Phone: 305.962.7669
"Recycle, Reuse, and Restore
Environmentally Impacted Properties: Rebuild Your Community One Brownfield at a
Time"
CONFIDENTIALITY NOTE: The information contained in this transmission may be privileged and confidential information, and is intended only for the use of the individual or entity named above. If the reader of this message is not the intended recipient, you are hereby notified that any dissemination, distribution or copying of this communication is strictly prohibited. If you have received this transmission in error, please immediately reply to the sender that you have received this communication in error and then delete it. Thank you.
CIRCULAR 230 NOTICE: To comply with U.S. Treasury Department and IRS regulations, we are required to advise you that, unless expressly stated otherwise, any U.S. federal tax advice contained in this transmittal, is not intended or written to be used, and cannot be used, by any person for the purpose of (i) avoiding penalties under the U.S. Internal Revenue Code, or (ii) promoting, marketing or recommending to another party any transaction or matter addressed in this e-mail or attachment.
I'm not trying to say that
brownfields don't have a stigma, it's just that it is different than superfund
because an innocent future owner's liability, or protection against
it, is different.
Not knowing the details of
the case you reference below it is difficult to make any calls on this but
initially I would say that yes, it is different. If the
barrier was constructed to prevent recontamination, it seems to me like it is
not related to the groundwater contamination and is an engineering control for
ongoing operation of the brownfield site. Very common. If the
barrier is intended to prevent vapor intrusion whose source is the groundwater,
it is still different because the regulators recognize that the
brownfield isn't the source of the contamination and the cost of the
barrier can be recovered from the polluter (ideally). There is also
a difference in cost (and final closure), which is what stigma and liability
really boil down to. In the case of the Willamette river, the unquantified
liabilities are in the hundreds of millions. A vapor barrier on a small
footprint doesn't even compare.
I do not know what the potential costs of
the Gowanus cleanup are but that's the quintissential problem, not
knowing. There is no question that the Gowanus should be
cleaned up. The question is, how does it get paid
for? Yes, in a sense, it's unique but I wonder just how unique.
It's a waterway whose sources of pollution are the properties around
it. When designated as a Superfund site, its cleanup will
be paid for by the owners, after many years of public involvement and
legal haggling.
As stated below, I'm not taking a
position on brownifeld vs. superfund but it's important to recognize that
superfund designation of a waterway most definitley casts a stigma on the
surrounding properties because that's who created and will pay for the
pollution.
Clark
From: Peter Strauss
[petestrauss1@comcast.net] Sent: Wednesday, September 16, 2009 12:42
PM To: Henry, Clark Cc: 'Evans Paull'; lsiegel@cpeo.org;
Chisholm, Deb; brownfields@lists.cpeo.org Subject: Re: [CPEO-BIF]
Dunedin and Tarpon Springs, Florida
Clark:
Let's look at a different scenario, one where I have some experience.
The site was designated a brownfield site, and the relatively small
footprint of the new building was cleaned up. However, during the
remediation they discovered that groundwater flowing beneath the property was
contaminated with a variety of chemicals, requiring them to build barrier that
would prevent recontamination. The "upstream" sources have not been
cleaned up, or face any enforcement actions, although the state regulators have
promised to attempt identify responsible parties, (and only after the
community's consultant pointed it out). I am skeptical that they have the
resources to follow through on this commitment. Isn't this the same
situation as you cite below. Isn't the "stigma" the same?
Gowanus is a unique situation. It is located in a highly urbanized
area. It is not a "natural" canal. After years of pouring all sorts
of industrial contaminants into it, the surrounding area lost most of
its industrial sources. As a result, and a project that allowed some clean
water to flow into the canal, it supported, for a time, a fish population.
This became the driver for health and ecological risks to exceed the EPA
criteria for listing on the NPL. Ironically, if it were just a stagnant,
highly polluted canal that supported no life (except for bacteria), it wouldn't
qualify.
Peter
On Sep 16, 2009, at 8:40 AM, Henry, Clark wrote:
Without taking a Superfund or Brownfield only
position, I do recognize a difference from
the stigma attached to each, especially when the Superfund site is a
waterway and the stigma rides with the upland properties as Evans points out
below. Since the rivers did not pollute themselves the liability rides
on the upland sites even if they themselves are not designated superfund
sites. Portland, Oregon is experiencing the issue Evans describes
below. Those upland sites are considered to be in what we are
calling the Superfund cloud, or the study area in which EPA sees liable
parties located. Sites within that cloud are not eligible for brownfield
funding. Tacoma Washington is experiencing the same thing.
This nuance creates confusion which never makes a purchaser
comfortable.
Without EPA confirming that a purchaser has
successfully achieved protections afforded through All Appropriate Inquiry,
they avoid the purchase of a property within that 'cloud' for fear
of being dragged into unquantified Superfund and NRDC claims. Most (if
not all) states have some form of Prospective Purchaser
Agreements establishing protection from State agencies for
brownfields but they don't have authority
over Superfund. The result locally is hundreds of acres of
unused employment land in a state with 12.3%
unemployment.
Clark
I don't know the
specifics of the Gowanus Canal, but EPA often designates a larger landside
area as contributing to the Superfund site. I'm familiar with several
west coast cities, where current or proposed sediment cleanup superfund/NPL
sites also include a large land area as contributing to the Superfund
site. This has generated much concern in the locality and for business
investment related to stigmatizing large areas of the cities. These
contributing areas seem to have murky legal ramifications, but concerns
were elevated in one city when EPA turned down a brownfields
application because the site was deemed ineligible due to its location
within a Superfund site.
These issues of Superfund/NPL vs. other
mechanisms are often debated in the Great Lakes region, where there is
federal funding under the Great Lakes Legacy Program for sediment cleanup,
but only at sites where the NPL enforcement mechanisms have failed or there
are well-documented orphan shares. The two sources can also be mixed
under an interesting formula (see: http://www.epa.gov/glnpo/sediment/legacy/rule/rfp.html#8._Evaluation_Process_)
For Gowanus, I assume there is no
similar alternative source for federal funding of orphan
shares.
Northeast Midwest
Institute
50 F Street,
NW
Washington, DC
20001
202-329-4282
(cell)
fax
202-544-0043
Deb,
In Brooklyn, only the Gowanus Canal - the
waterway itself - is proposed for the "Superfund" National Priorities
List. The adjacent properties that are proposed for redevelopment would
not be hurt by policies denying brownfields funding to Superfund
sites.
People who have smelled the canal are skeptical that Listing
would create a greater stigma.
Lenny
Chisholm, Deb
wrote: > The Brooklyn Gowanus Canal site is proposed to the NPL.
This is a very important point not to be overlooked. It may escape the
stigma attached to a Superfund designation, but it does not get funding
typically associated with Brownfield sites. Sites on or proposed to
the NPL are ineligible for Brownfield funding from EPA and from HUD's BEDI
program. The only way to remove the proposed status is to clean it up
- with regulatory oversight just like a real Superfund site. We have a
site in NH also in this Superfund purgatory. So when looking to escape
the stigma of Superfund, people should be careful about what concessions
they're really making. > > Deb
Chisholm > Brownfields Coordinator > Nashua Community
Development Division > City Hall, 229 Main Street, PO Box 2019 >
Nashua, NH 03061-2019 > Phone: (603) 589-3074 > Cell Phone:
(603) 491-7763 > Fax: (603) 589-3119 > >
________________________________ > > From: brownfields-bounces@lists.cpeo.org
on behalf of Trilling, Barry > Sent: Tue 9/15/2009 3:25 PM > To:
'lsiegel@cpeo.org' > Cc: 'brownfields@lists.cpeo.org' >
Subject: Re: [CPEO-BIF] Dunedin and Tarpon Springs,
Florida > > > > Lenny: I believe you make my
point for me with yoir examples: the reality on and under the ground
may have less to do with stigma than the title we attribute to the
property. Some properties that are considered "mere" brownfields have
significant contamination but may escape deserved stigma until the
seriousness of their condition becomes publicly known. Any property
that carries a "Superfund" label automaticallly has an indelible mark,
notwithstanding its level of contamination or success in cleanup. Once
the label attaches it is almost always irreversible. Non-Superfund
brownfield sites may have hope for development and reuse that the Superfund
label would not permit. Hence the reluctance to make the Brooklyn
Gowanas Canal a Superfund site. > > ----- Original Message
----- > From: Lenny Siegel <lsiegel@cpeo.org> > To:
Trilling, Barry > Cc: brownfields@lists.cpeo.org
<brownfields@lists.cpeo.org> >
Sent: Tue Sep 15 14:57:33 2009 > Subject: Re: [CPEO-BIF] Dunedin and
Tarpon Springs, Florida > > Barry, > > Brownfields
sites include many uncontaminated parties. (In fact, in > Michigan the
only requirement appears to be that the property was once a >
field.) > > And Superfund sites include lands that should never
be redeveloped for > continuing human occupancy. > > But
there are many sites, such as factories where releases impact >
groundwater in the neighborhood, that could go either way. > >
There are about 20 Superfund listings within ten miles of my house,
and > many have undergone redevelopment. There are many more
non-Superfund > sites with documented contamination. > >
My point is that whatever stigma exists - at least here - is a
function > of the contamination and has little to do with whether the
sites are > listed under Superfund or any other regulatory
program. > > Lenny > > Trilling, Barry
wrote: > >>Lenny: There's a world of semantic and
legally significant difference between a "Superfund" site and a
"brownfield." Superfund sites are thought of as the worst kind of
environmental disaster zones, such as the Love Canal or Times Beach.
The Operating Industries SIte, for example, long rated #1 on the EPA
National Contingency List, started its life as a 400 foot pit and over time
was filled with industrial waste until to towered as a hill 1/4 mile up into
the horizon, with literally thousands of potentially responsible
parties. This is a far cry from a typical brownfield, for instance a
former metal finishing shop located in a strip mall. Most voluntary
remediation programs do not extend eligibility to Superfund sites. A
brownfield, on the other hand, may not even be contaminated, but merely
carry the stigma of potential contamination by virtue of its prior
industrial use. It is easy to understand how the stigma of the word
Superfund will stick, while a brownfield si
> > te may lose
that stigma after undergoing cleanup. > >>Barry J.
Trilling >> W I G G I N A N D D A N
A >> >> >>-----Original
Message----- >>From: brownfields-bounces@lists.cpeo.org
[mailto:brownfields-bounces@lists.cpeo.org]
On Behalf Of Lenny Siegel >>Sent: Wednesday, September 09, 2009
7:39 PM >>To: Michael.Goldstein@akerman.com >>Cc:
brownfields@lists.cpeo.org >>Subject:
Re: [CPEO-BIF] Dunedin and Tarpon Springs,
Florida >> >>Michael, >> >>Thanks for
the background. I find it ironic that in some locales, such >>as
New York City, developers and the city prefer "Brownfield"
over >>"Superfund" because it supposedly does NOT carry the
stigma. >> >>My experience in Silicon Valley suggests that
whatever stigma is >>associated with contaminated property doesn't
come from a government >>label. Instead, it derives from the
contaminated or blighted condition >>of the property. To the degree
that labeling helps repair that >>condition, it overcomes the
stigma. >> >>Lenny >> >>Michael.Goldstein@akerman.com
wrote: >> >> >>>First a clarification is in
order. The columnist refers to the
EPA >>>Brownfields Program as "offering tax incentives, grant
funds, >>>low-interest loans and employee training for
developers willing to build >>>in areas designated a
brownfield." This particular laundry list of >>>incentives
for sites located in a designated Brownfield Area is
correct; >>>however, the government entity offering them is the
State of Florida, >>>not
EPA. >>> >>>That said, the larger point the
columnist makes is spot on and >>>underscores what has
historically been a steep learning curve - and >>>persistent
source of resistance - in Florida for both private sector
and >>>public sector actors thinking about putting a toe in the
Brownfields >>>arena. More specifically, although environmental
professionals here have >>>long been promoting the Florida
Brownfields Program as an effective way >>>to, in the words of
the columnist, "spark a new wave of economic >>>redevelopment"
and "eliminat[e] urban blight in commercial and >>>industrial
areas," inexperienced local governments and developers
cite >>>the fear that a "Brownfields label" would lead to
further market >>>dysfunction as a principal basis for staying
on the sidelines. >>> >>>While there has been no
empirical study of whether and, if so, precisely >>>how and to
what extent properties that have been formally designated
a >>>Brownfield in Florida (i) suffer some measure of diminution
in value, >>>(ii) have a more difficult time obtaining financing
(or financing at >>>market rates), or (iii) are marginalized or
rejected by end-users, the >>>weight of experience among
Brownfield practitioners throughout the state >>>strongly
suggests exactly the opposite. What the marketplace
has >>>actually taught us since enactment of Florida's
Brownfields Program in >>>1997 is this: The Brownfields
designation accelerates the recycling of >>>contaminated
property and turbocharges a project's ability to attract >>>any
combination of equity, debit, investors, residents, and tenants.
The >>>designation and the processes that follow provide a level
of comfort and >>>assurance that state and local environmental
regulators will be >>>institutionally invested in the project,
that local government officials >>>will utilize all of the
planning and economic tools and resources at >>>their disposal,
that credentialed and serious legal and
engineering >>>professionals will be engaged, that the cleanup
will proceed on a smart >>>and predictable schedule, that
development and construction will be >>>subject to innovative
and cutting-edge design methodologies, and that >>>the risk of
exposure to be liability will be managed in a
sophisticated >>>and effective
manner. >>> >>>The line in the column that resonates
most deeply - "A bit of stigma >>>over a designation no one will
remember should not deter these cities >> >>>from
getting hundreds of thousands of dollars in redevelopment funds"
- >> >>>also rings extraordinarily true,
notwithstanding the issue that some >>>observers take with the
notion that the designation creates even "a bit >>>of
stigma." If there is stigma, it's in the underlying contamination
or >>>perception of contamination (among other criteria) that
triggers the >>>eligibility for designation in the first
instance. The designation, on >>>the other hand, is the
delivery vehicle for the financial and regulatory >>>incentives,
the private capital, and the expedited permitting
(among >>>other benefits) that create the initial catalyzing
effect and launch a >>>project towards rehabilitation and
reuse. In short, the designation is >>>neither
manifestation nor exacerbation of market dysfunction;
rather, >>>it's a swift first step towards prompt environmental
cleanup and >>>successful economic
revitalization. >>> >>>Finally, yes, local
governments should, as the columnist concludes, "act >>>quickly"
to get their fair share of federal and state grant programs
and >>>other economic incentives because the marketplace in
Florida has also >>>taught this lesson: Private capital chases
the flow of public funds, and >>>the powerful leveraging effect
created by the combination of public and >>>private money is the
single greatest factor in establishing the >>>feasibility of a
Brownfields redevelopment
project. >>> >>>-M >>> >>>Michael
R. Goldstein, Esq. >>>Akerman Senterfitt >>>One
Southeast Third Avenue, 28th Floor >>>Miami, FL
33131 >>>Direct Line: 305.982.5570 >>>Direct
Facsimile: 305.349.4787 >>>Mobile Phone:
305.962.7669 >>>michael.goldstein@akerman.com >>> >>>"Recycle,
Reuse, and Restore Environmentally Impacted
Properties: >>>Rebuild Your Community One Brownfield at a
Time" >>> >>> >>>Michael R. Goldstein,
Esq. >>>Akerman Senterfitt >>>One Southeast Third
Avenue, 28th Floor >>>Miami, FL 33131 >>>Direct
Line: 305.982.5570 >>>Direct Facsimile:
305.349.4787 >>>Mobile Phone: 305.962.7669 >>>michael.goldstein@akerman.com >>> >>>"Recycle,
Reuse, and Restore Environmentally Impacted
Properties: >>>Rebuild Your Community One Brownfield at a
Time" >>> >>> >>> >>> >>> >>> >>> >>> >>> >>> >>> >>> >>> >>> >>> >>> >>> >>> >>> >>> >>> >>> >>> >>> >>> >>> >>> >>> >>> >>> >>> >>> >>> >>> >>> >>> >>> >>><http://www.akerman.com/> >>>www.akerman.com <http://www.akerman.com/>
| Bio >>><http://www.akerman.com/public/attorneys/aBiography.asp?id=619>
| V Card >>><http://www.akerman.com/public/attorneys/vcard.asp?id=619> >>> >>> >>>CONFIDENTIALITY
NOTE: The information contained in this transmission may >>>be
privileged and confidential information, and is intended only for
the >>>use of the individual or entity named above. If the
reader of this >>>message is not the intended recipient, you are
hereby notified that any >>>dissemination, distribution or
copying of this communication is strictly >>>prohibited. If you
have received this transmission in error, please >>>immediately
reply to the sender that you have received this >>>communication
in error and then delete it. Thank
you. >>> >>>CIRCULAR 230 NOTICE: To comply with U.S.
Treasury Department and IRS >>>regulations, we are required to
advise you that, unless expressly stated >>>otherwise, any U.S.
federal tax advice contained in this transmittal, is >>>not
intended or written to be used, and cannot be used, by any
person >>>for the purpose of (i) avoiding penalties under the
U.S. Internal >>>Revenue Code, or (ii) promoting, marketing or
recommending to another >>>party any transaction or matter
addressed in this e-mail or
attachment. >>> >>> >>> >>> >>> >>> >>> >>> >>> >>> >>> >>> >>> >>> >>> >>> >>> >>> >>> >>> >>> >>> >>> >>> >>> >>> >>> >>> >>> >>> >>> >>> >>> >>> >>> >>> >>>-----Original
Message----- >>> >>> >>> >>> >>> >>> >>> >>> >>> >>> >>> >>> >>> >>> >>> >>> >>> >>> >>> >>> >>> >>> >>> >>> >>> >>> >>> >>> >>> >>> >>> >>> >>> >>> >>> >>> >>> >>> >>> >>> >>> >>> >>> >>> >>> >>> >>> >>> >>> >>> >>> >>> >>> >>> >>> >>> >>> >>> >>> >>> >>> >>> >>> >>> >>> >>> >>> >>> >>> >>> >>>From:
brownfields-bounces@lists.cpeo.org >>>[mailto:brownfields-bounces@lists.cpeo.org]
On Behalf Of Lenny Siegel >>>Sent: Tuesday, September 08, 2009
5:13 PM >>>To: Brownfields Internet
Forum >>>Subject: [CPEO-BIF] Dunedin and Tarpon Springs,
Florida >>> >>>What's a little contamination among
friends? >>> >>>COLUMN BY MARK
SCHANTZ >>>SUNCOAST NEWS (FL) >>>September 5,
2009 >>> >>>What's a little contamination among
friends, especially when it means >>>millions of federal tax
stimulus dollars being available to local >>>governments and
area developers? >>> >>>Cities like Largo and
Clearwater have already utilized the Environmental >>>Protection
Agency's Brownfields Redevelopment Grant Program
to >>>revitalize their depressed areas, by providing economic
incentives to >>>developers and business owners. These grant
funds can spark a new wave >>>of economic redevelopment
eliminating urban blight in commercial and >>>industrial areas.
It can help property owners repair and
redevelop >>>buildings. >>> >>>The
Dunedin City Commission is considering declaring its
downtown >>>community redevelopment district and other parts of
its city a >>>brownfield. The designation would be a great fit
in Tarpon Springs, >>>which badly needs to attract developers
and spark economic redevelopment >>>downtown, at the Sponge
Docks and along the Pinellas Avenue
corridor. >>> >>>... >>> >>>For
the entire column, see >>>http://suncoastpinellas.tbo.com/content/2009/sep/05/pi-whats-a-little-contamination-among-friends/ >>> >>>-- >>> >>> >>>Lenny
Siegel >>>Executive Director, Center for Public Environmental
Oversight >>>a project of the Pacific Studies
Center >>>278-A Hope St., Mountain View, CA
94041 >>>Voice: 650/961-8918 or 650/969-1545 >>>Fax:
650/961-8918 >>><lsiegel@cpeo.org> >>>http://www.cpeo.org <http://www.cpeo.org/> >>> >>> >>> >>>_______________________________________________ >>>Brownfields
mailing list >>>Brownfields@lists.cpeo.org >>>http://lists.cpeo.org/listinfo.cgi/brownfields-cpeo.org >>> >> >> >> >> >> >>-- >> >> >>Lenny
Siegel >>Executive Director, Center for Public Environmental
Oversight >>a project of the Pacific Studies
Center >>278-A Hope St., Mountain View, CA 94041 >>Voice:
650/961-8918 or 650/969-1545 >>Fax: 650/961-8918 >><lsiegel@cpeo.org> >>http://www.cpeo.org <http://www.cpeo.org/> >> >> >> >> >>_______________________________________________ >>Brownfields
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-- > > > Lenny Siegel > Executive Director, Center
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--
Lenny
Siegel Executive Director, Center for Public Environmental Oversight a
project of the Pacific Studies Center 278-A Hope St., Mountain View, CA
94041 Voice: 650/961-8918 or 650/969-1545 Fax: 650/961-8918 <lsiegel@cpeo.org> http://www.cpeo.org
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