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Because of the active tense of "discharge" (spilling,
emptying, pouring, dumping, etc), many lawyers have advised clients there
is no obligation to report discovery of historical discharges since there is no
current "spilling, dumping, pouring" etc. Thus, even for states like NJ where
there is no RQ, reporting of historical contamination is
still problematic and enables developers to do self-directed
cleanups without state oversight.
Hopefully, the requirement that consultants obtain licenses
that can be forfeited in some cases will help ameriolate some of this moral
hazard.
Good Morning Ladies and
Gentlemen,
Very interesting
discussion. I few points from New Jersey.
Public Notice: New
Jersey's regs went on the books in Sept 08 and went effective for existing sites
Sept 2, 2009. Any site with any remediation (program doesn't matter) must meet
N.J.A.C. 7:26E-1.4. Basically two ways to do it: Post sign at site, or
send letters to property owners within 200 feet. A whole bunch of nuances, so
read them if your curiosity is up.
Before commenting
on Phase 1, a point; In New Jersey you have an obligation under the "Spill
Act" to report the discharge of any hazardous substance immediately, which means
within 15 minutes. There are no allowable quantities--a drop of gasoline could
be reportable. Been around for a long time. This has created a large gray
area (e.g, if benzene is present in soils, but below the NJ cleanup standard, is
the reportable?) that's never been addressed by the regulators and is way
too long for this e-mail, but there is an obligation to report. And, under the
recently effective Site Remediation Reform Act, the property owner now has an
affirmative obligation to remediate, meaning you must do public notice. This
notice is required two weeks before field work for site investigation is
started, not after the suspicion of contamination has been identified. So, NJ
has got this covered. AND, a Phase 1, by definition, does no field work.
I have found USTs that a
Phase 1 missed and they were, of course, a reportable event, except my client
didn't own the property. After a discussion with client's attorney, who spoke
with owner's attorney, USTs were reported (and completely removed and remediated
at owner's expense.) In my experience, the "try to hide it and do the
minimal" is something from the early to mid 1980's, not the approach of
today. (I've been an environmental consultant since 1976). My clients
understand their best approach is to get at the problem and fix it by doing it
right the first time; the alternative only costs you more in the long run. And,
please don't confuse a client's desire (and right) to remediate as cost
effectively as they can (while meeting the regulator'y requirements) with doing
a poor job.
Phase 1: Here in Jersey
there was a consultant who did a Phase 1 that missed a serious issue--mercury in
floor boards. (This was a while age--at least ten to 15 years.) Fast
forward to a third party (unknown to the consultant) who relied on that Phase 1
and purchased the property BEFORE the issue was discovered. At the end of the
day, the original consultant was liable (by NJ Courts) to someone who wasn't
their client and didn't have that consultant's permission to use report. My
standard terms and conditions exclude all use by any third party, PERIOD. (This
on advice from counsel, BTW.) I don't know of any counsultant that doesn't do
the same. So, saying that Phase 1's should be routinely reported does not jibe
with the realty of doing them---from either the consultant's or client's
perspective.
On ECRA/ISRA: Before the
SRRA, there were a number of routes to closing a transaction before completing
site remediation. All involved posting financial assurance. The SRRA changed the
playing field in NJ (basically "out-sourcing" the NJDEP's Site remediation work
to LSRPs [licensed site remediation professionals]) and it's only been effective
for 3 weeks, so it's not real clear at this juncture exactly how it will work
going forward.
Overall, I have to say
ECRA/ISRA has been very succussful in keeping the responsible party doing the
cleanup of sites. Although a I know of more than one case that is 25 years old
and still open. ECRA became effective 12/31/83.
Rich
Chapin
_____________________________________________________
Richard W.
Chapin, M.S., P.E., BCEE
President, Chapin Engineering
27 Quincy Road,
Basking Ridge, NJ 07920
908-647-8407 908 625 5697
(cell) 908-647-6959 (fax)
----- Original Message -----
Sent: Monday, November 23, 2009 12:43
AM
Subject: [CPEO-BIF] Reporting Phase 1 and
Phase 2 Environmental Site Assessments
I cut my teeth on ECRA, now ISRA. It
was a far-sighted statute since it was triggered by closing or sale of
industrial establishment. In essence, it was intended to prevent creation of
brownfields (before that name became popular).
Unfortunately, DEP
never had enough staff so the program got criticized over the years for the
delays. Some other states (e. g., Ct, Ind and Ill-the latter was later
repealed) adopted similar laws but without the ability of the state to hold up
the transaction.
BTW- The joke used to be that ECRA stood for the
"environmental consultant's retirement act" but the consulting industry it
really meant the "environmental counselor's retirement act". The law got such
a bad name that when it was amended in 1993 they changed the name to ISRA.
Larry
Larry Schnapf
Schulte Roth & Zabel
919 Third
Avenue
New York, NY 10022
212-756-2205 (p)
212-593-5955
(f)
From: Peter Strauss
<petestrauss1@comcast.net>
To: Schnapf, Lawrence
Cc: debsinha@gmail.com <debsinha@gmail.com>;
brownfields@lists.cpeo.org <brownfields@lists.cpeo.org>
Sent:
Sun Nov 22 23:58:17 2009
Subject: Re: [CPEO-BIF] Reporting Phase 1
and Phase 2 Environmental Site Assessments
Larry, or
anyone else who knows:
There was, as I recall , a law passed (ECRA?) in NJ that required an
industrial site to take affirmative action on sites in which the owner was
transferring property, similar to what we have been discussing. Does
anyone have experience with this law and how it has worked? Did it meet
an appropriate standard of informing the public; did it require remediation of
contamination before the property could be transferred? Most
importantly, could this serve as a model for a policy that would require due
care (or pay the consequences)? Is the law still in effect?
Peter
On Nov 22, 2009, at 7:17 PM, Schnapf, Lawrence wrote:
My reference to new brownfield sites being created is the
sheer number of contaminated sites being shutdown, or owned sites being
abandoned to insolvent entities and leased sites rejected as part of
bankruptcy procedures in the past two years.
Again, my concern
is the sites that do not have impending or foreseeable transactions so
that contamination may continue to migrate, as well as sites that were
redeveloped in the past as part of a self-directed cleanup.
As
lender's counsel, I continually was confronted with former manufacturing,
gas station and dry cleaner sites that were redeveloped and remediated
without any regulatory oversight b/c of concerns about construction delays
and overruns.
They would seek private financing to take out
construction loans and could not provide any regulatory signoffs. often
times, I had to force borrower to take additional sampling and then report
results to the state for further remediation. However, the lenders often
looked the other way when they would be securitizing the loans since they
would be selling the loans to investors elsewhere in the world and getting
hugh fees in addition to getting loans off their books. Created quite the
moral hazard.
I've seen this all over the country in big states and
small. The developers and owners rather risk the possibility of
regulators discovering the unsupervised cleanup than risk their construction
schedules. . The attitude is that the overworked regulators will focus
on their unremediated sites and are to unlikely impose any penalties
for a site that as already been redeveloped and occupied.
Of
course, this only happens for projects that are privately-financed and
do not receive brownfield funding- which is the vast majority of the
time
L
Larry Schnapf
Schulte Roth & Zabel
919 Third
Avenue
New York, NY 10022
212-756-2205 (p)
212-593-5955
(f)
----- Original Message -----
From: brownfields-bounces@lists.cpeo.org
<brownfields-bounces@lists.cpeo.org>
To:
Brownfields Internet Forum <brownfields@lists.cpeo.org>
Sent:
Sun Nov 22 15:15:56 2009
Subject: Re: [CPEO-BIF] Reporting Phase 1 and
Phase 2 Environmental Site Assessments
Larry, could you please
elaborate on the last sentence *Indeed, more brownfield
sites were
created in 2009 than were
cleaned up!*? Are you referring to migration of
soil and groundwater
contamination to adjacent properties either because
cleanup is not happening or
because of incomplete/self-directed
cleanups?
Also, I would also appreciate if anyone direct me to
reports documenting these
various conditions under which legacy pollution
is not required to be reported
to the relevant agencies during
redevelopment/sale of properties (when I expect
these conditions to be
made
public).
Deb.
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contain confidential information that is privileged or that constitutes attorney
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