NOTE: Originally posted at EDR (Environmental Data Resources, Inc.) blog by Lawrence Schanpf.

Schnapf Judgment

A well-known New York City environmental attorney brings his humor and legal expertise to bear on such topics as the environmental due diligence conducted on corporate, real estate and brownfield transactions, commercial lending and securitizations, and workouts.

Dirty Little Secrets-Part 1

6/10/2008 | posted by

Name: Lawrence Schnapf
Company Name: Schulte Roth & Zabel
Job Title: special counsel

Nearly all state and federal environmental cleanup laws have reporting obligations. However, the circumstances and parties who have the obligation to report contamination will vary significantly. In many cases, the reporting obligations are linked to the discovery of contamination that exceeds a reportable quantity or RQ. The RQ will vary according to the particular contaminant.

At first glance, this may seem like a reasonable approach. However, when one “digs” a little deeper, it becomes clear that the way reporting obligations are structured have actually facilitated the proliferation of brownfields and allows many sellers of corporate property to keep the presence of contamination secret. Indeed, a common provision now appearing in transactional documents is a so-called “No Look” or “No Hunt” clause that prevents the buyer from conducting further investigations on its property if it wants to maintain the contractual protections it obtained from the seller. In fact, it is not uncommon for  environmental lawyers to spend a significant amount of time on deals negotiating and drafting what and how information about contamination is to be disclosed.

The reason for all this is because the reporting obligations are often expressed in terms of the discharge of a certain quantity of a chemical over a certain period of time such as 24 hours. Now, back in the 1970s this made alot of sense when environmental management practices were still in their infancy and the principal problem was stopping ongoing discharges of hazardous substances.

Management of hazardous substances and wastes has significantly improved over the nearly three decades since the passage of CERCLA and RCRA so that NEW discharges from a facility are no longer the most important concern.  Instead, it is the legacy of historical contamination from these past practices that have had to continually confront.

Unfortunately, the reporting obligations often do not address purely historical contamination since (1) the regulations often use present tense gerunds such as spilling, discharging, releasing, disposing and  (2) it is difficult to determine how much of the contamination was discharged over the relevant reporting period. In otherwords, was it a drip, drip of PCB-contaminated oil from a condensor  or percolation of wastes thru an unlined lagoon over 20 years, or was there a sudden release of hazardous materials from some containment structure or container.

Another  regulatory oddity is that cleanup standards and reporting obligations are not congruent so that there could be contamination above  above cleanup levels that may not be reportable because the contamination occurred over a very long period of time yet for some chemicals there may be a discharge that requires reporting but does not result in any risk-based cleanup obligation.

As a result, owners and sellers of property with purely historical contamination take the position that they have no obligation to disclose the presence of the contamination even if the contamination is present in concentrations that exceed applicable cleanup standards. In the absence of a regulatory driver, the owner/seller can then contractually prohibit the buyer from disclosing the contamination unless an overburdened regulatory somehow stumbles across the contamination.

Now, some academics, government legislators and judges have expressed the view that this is really not that big a problem because the marketplace can address this issue. After all, they say, a buyer can always require a seller to disclose and cleanup a site. Of course, this ignores the practical market reality that buyers may not have the leverage to extract such concessions, may not realize they need such information or that they may even want to know.

I think the absence of reporting obligations for purely historical contamination has contributed to the creation of brownfields as owners can just abandon their properties and while the local real estate market may be aware of concerns, overtaxed regulators may have no clue about the potential contamination.

My suggestion is that we link reporting obligations to cleanup standards so that if a phase 2 discovers soil or groundwater contamination, the contamination must be reported.  No more time spend on trying to figure out how much of the chemical escaped into the ground or less time for lawyers to argue over how to deal with the results of the due diligence.

I also think that all phase 2 reports should  be required to be sent to a centralized state database. Just think of all the wasted time and money that goes into repeating phase 2 reports over the years. If a consultant was able to access a database and see that sampling had been collected in the past in a certain area, it could use that information to advise its client that there is no need to sample in a particular area or that the area was already sampled and recommend sampling in other areas to better delineate the contamination.

Why are we still discovering contaminated sites nearly 30 years after CERCLA? Why havent we cleaned up more sites? Why are there so many brownfield sites? I think the inadequate reporting obiligations are a bit reason.

What do you think?

NOTE: Please also read article as originally posted at EPA Region 10 Building on Brownfields Newsletter.

EPA awards five new STRP grants in Alaska
DEC proposes applications by tribal consortia to increase funding

EPA recently awarded $50 million in State and Tribal Response Program (STRP) grants to numerous states, tribes and tribal consortia across the nation. Among the grant winners are five tribes and tribal consortia in Alaska, and there are six continuing grants.

While the 2008 awards have been made, the Alaska Department of Environmental Conservation (DEC) encourages future potential applicants to start framing their requests for the next grant cycle.

“One of our objectives in the next year will be to help communities understand how best to successfully apply for this funding opportunity in a manner that maximizes results and minimizes the paperwork,” says John Carnahan, DEC brownfield coordinator. “Although it is certainly not a requirement, we highly encourage tribes to consider working together with their neighbors to establish sub-regional consortia when seeking STRP funding.”

STRP grants are available to individual states, tribes and tribal consortia across the nation as capacity-building grants to help establish brownfield programs. More Alaska communities may be able to reap the benefits of these grants when working together to identify sites, educate their residents, review their reuse and redevelopment goals, and provide training through this unique funding opportunity, Carnahan says.

A well-designed regional brownfield grant can complement tribal environmental programs and assist communities that may otherwise not be able to apply for and manage this funding, according to DEC. Brownfield funding allows communities to focus on specific revitalization efforts, whereas the EPA Indian General Assistance Program (IGAP) grant does not. With a strong IGAP program in place and supplementary brownfield services and training made available through regional brownfield programs, tribes will be better situated to independently manage spill prevention and environmental assessment, cleanup and redevelopment projects, Carnahan says.

And because the funding available through EPA’s Brownfield Program is limited, more villages will be able to reap the benefits of brownfield assistance if they work together to share resources.

“We want to establish a strong tribally led program that can coordinate community needs across Alaska,” he says. “We encourage tribes to capitalize on existing consortia or other regional relationships to develop an application encompassing multiple communities.”

As an example, the Yukon River Inter-Tribal Watershed Council (YRITWC), which is in its third year of STRP funding, has used its STRP grant to survey environmental conditions in 37 watershed communities; YRITWC has identified and mapped more than 230 potential brownfield sites. Training is also a focus of the YRITWC grant, and they have brought together representatives from more than 30 communities, in three separate training workshops, to discuss the brownfield program, how to identify and document sites, and how to work together on establishing a brownfield inventory. The brownfield funding received by the YRITWC has been used to complement the watershed communities’ IGAP grants, extending services to areas that otherwise may not have brownfield funding.

The organizations that have already been awarded STRP grants are:

* Alaska Department of Environmental Conservation
* Yukon River Inter-Tribal Watershed Council
* Port Heiden Native Council
* Leisnoi Village–Woody Island Tribal Council (Kodiak)
* Native Village of Tununak–Nelson Island Consortium
* Anvik Tribal Council
* Metlakatla Indian Community

The five new ones this year, most of which will be starting October 1 (the beginning of the federal fiscal year) are:

* Bristol Bay Native Association
* Organized Village of Kasaan
* Maniilaq Association
* Middle Kuskokwim Consortium
* Yakutat Tlingit Tribe

For more information on the STRP grant, contact Sonja Benson or John Carnahan. Or go to http://www.epa.gov/swerosps/bf/state_tribal.htm.

NOTE: Please read original article at Building On Brownfields

Project recycles more than just land, TBA clears hurdle for home improvement outlet store

With a piece of property in mind for its home improvement outlet store, Habitat for Humanity of Seattle/South King County had one large hurdle to clear: Before it could purchase the land and warehouse and move forward, officials had to know what kind of contamination lingered below the surface.

The seller had provided Habitat with old environmental reports that indicated some groundwater contamination of uncertain origin, says Bob Gerth, a Habitat volunteer and retired CPA and businessman. When bankers hear words like “contamination,” it isn’t exactly easy to get a loan, he adds.

NOTE: Please read the original article at Building On Brownfields.

From storing grain to fostering growth, Historic silos take on new mission in Idaho

When you look at a grain silo, what do you see?

Do you see restaurants? Condos? A winery? How about a gallery or performance center, or maybe even a college research laboratory?

John and Miranda Anderson of the Anderson Group in Moscow, Idaho, see this and more. They see a chance to turn a 1-acre property at the heart of the town into a redevelopment that will foster economic growth, environmental stewardship and a celebration of the region’s agricultural roots.

 NOTE: Originally posted at EDR (Environmental Data Resources Inc.) blog by Rob Barber.
Property Talk

EDR’s CEO brings his unique perspective to address topics of strategic interest, including the state of the ESA industry, business management issues, trends in information technology and global developments affecting environmental due diligence practices.

Government 2.0

6/3/2008 | posted by

Name: Rob Barber
Company Name: EDR
Job Title: CEO
Location: Milford, CT, Hidden

For all of this blog’s regular readers, including those who attended the Scottsdale conference two weeks ago, it is no secret that there has been a lot of recent attention paid to the concept of user generated environmental content and how (or even “if”) it should be considered within a Phase 1.  The basic arguement goes like this:  “As an EP, how can I rely on user generated content when I don’t know anything about its contributor or its accuracy?  Aren’t I better off continuing to rely solely on government records and actual knowledge?”

Well, to muddy the waters even further, consider Project Government 2.0.

In From Wikinomics to Government 2.0, L. Gordon Crovitz begins to explain how our government is beginning to employ web 2.0 technologies in response to public and congressional demands to become more inclusive and transparent in decision making.  Two examples of wikis at work are Intellepedia and Diplopedia.  Intellipedia “lets 37,000 officials at the CIA, FBI, NSA and other U.S. intelligence agencies share information and even rate one another for accuracy” while Diplopedia “lets State Department staff share information”.

So if government agencies responsible for national security are experimenting (if not outright employing) wikis as data aggregation tools, how long before EPA does the same to collect the public’s environmental information about property?  Well, that too has already begun.

According to Marcus Peacock, Deputy Administrator of the EPA, a test wiki was launched last fall to collect information about the Puget Sound.  The result?  Mr. Peacock writes that “we (EPA) collected more environmental information on the Puget Sound area in a couple of days than we could previously have done in as many weeks.”

So in the future, when we access EPA data, how will we know if the information found its way into an EPA database the old fashioned way (someone filled out a form and submitted it) or the new way (someone contributed it to a wiki)?

The ground under our feet is moving as we speak and the ESA industry is going to change because of it.  Whether “WE” (EDR and the nation’s environmental consulting firms) together build a national property environmental wiki or not, we’ll still have to deal with the issue.  User generated environmental content about properties is now finding its way directly into the government records. How EPs respond respond in the coming months will be very interesting and exciting.

Please see original article at EPA Region 10 Building On Brownfields Newlsetter

In redevelopment, bigger isn’t always better, Alaska teaches us to let cultural values play role in reuse

Historically, brownfields programs have focused on idle, industrial properties. Add to that the fact that many high-profile brownfield success stories have spotlighted large construction projects, such as retail shopping centers, and the perception may be that brownfields exist only in heavily populated, industrialized cities.

Link to EPA Region 1’s Brownfields What’s New 6-2-08

Link to EPA Region 1’s Brownfields “What’s New” 5-12-08 Newsletter

EPA Region 1- Brownfields What’s New, April 08

Request for Applications: Smart Growth Implementation Assistance

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