A GUIDEBOOK FOR BROWNFIELD PROPERTY OWNERS

A GUIDEBOOKFOR BROWNFIELDPROPERTY OWNERS

Copyright© 1999 Environmental Law Institute

This guidebook was prepared with funding from the United States Environmental ProtectionAgency (EPA), under cooperative agreement #CR-820539-01, and the Richard King Mellon Fund,which supports ELI’s Sustainable Use of Land Program. The Program identifies ways in whichlaws, policies, and institutions can produce sound decisions that protect the nation’s lands andwaters for the use and enjoyment of future generations.

Although funding was provided by EPA and the Richard King Mellon Fund, this guidebookdoes not necessary reflect their views and no official endorsement should be inferred.

This guidebook was written by ELI senior attorneys Linda Breggin and Jay Pendergrass, and by Keith Welks, Phoenix Land Recycling Company. Ken Rosenbaum of Sylvan EnvironmentalConsultants also contributed to this guidebook.

Copyright© 1999, Environmental Law Institute®. All rights reserved.ELI Project Numbers 941743 and 980100.ISBN #0-911937-98-6

(Environmental Law Institute®, The Environmental Forum®, ELR®, and the Environmental LawReporter® are registered trademarks of the Environmental Law Institute.)

ACKNOWLEDGMENTS

CHAPTER 1: The Basics. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1What is a Brownfield? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1Do I Own a Brownfield? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1Why the Interest in Helping Brownfield Owners? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2What are the Benefits of Brownfield Redevelopment? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2Why Not Leave a Brownfield Property In Its Current Condition? . . . . . . . . . . . . . . . . . . . . . . . . . 2Does the Government Provide Incentives for Brownfield Redevelopment? . . . . . . . . . . . . . . . . . 3Who Are the Key Players in Brownfield Cleanup and Redevelopment? . . . . . . . . . . . . . . . . . . . . 3What Does This Guidebook Cover? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4

CHAPTER 2: Determining Demand and Value . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5Reuse Potential. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5Land Use Considerations and Restrictions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7Uncertainty & Value . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8Environmental Liability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9

CHAPTER 3: Reuse and Redevelopment Alternatives . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11Sale “As Is” . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11Sale After Assessment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13Sale After Assessment and Cleanup . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13Cleanup and Redevelopment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14The Role of Insurance in Brownfield Transactions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15

CHAPTER 4: Investigating Environmental Conditions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17Collecting Basic Background Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17Moving To A More Formal Assessment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18Obtaining Funding . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19Allocating the Cost and Responsibility for the Assessment . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19Working With a Consultant . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20Taking the Next Step . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23

CHAPTER 5: Community Involvement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25

TABLE OF CONTENTS

CHAPTER 6: Finding Financing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29Traditional Loans. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29Brownfield-Specific Financing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30Venture Capital . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32

CHAPTER 7: Issues Concerning Cleanup . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33Background on State Voluntary Cleanup Programs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34Background on State Brownfield Programs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34Cleanup Standards Under State Voluntary and Brownfield Programs . . . . . . . . . . . . . . . . . . . . 35Cleanup Remedies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36Cleanup and Reuse Decisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36Cleanup Procedures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40Cleaning Up Brownfield Properties Independent of Regulatory Oversight . . . . . . . . . . . . . . . . 41Consultants and Cleanups . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42

CHAPTER 8: Obtaining Liability Protection . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45Liability Relief Under State Brownfield or Voluntary Cleanup Programs. . . . . . . . . . . . . . . . . . . 45Liability Relief Under Federal Programs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46

CHAPTER 9: Selling Brownfield Properties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47Representations and Warranties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47Indemnifications . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48Assessment and Remedial Work as a Condition of Sale . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49Covenants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50Property Transfer Laws . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50

Brownfields Glossary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51

Appendix A: Does Your Brownfield Present a Business Opportunity? . . . . . . . . . . . . . . . . 55

Appendix B: Federal and State Cleanup Programs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57

Appendix C: Brownfield and Voluntary Cleanup Program Incentives . . . . . . . . . . . . . . . . . 63

Appendix D: Brownfield and Voluntary Cleanup Program List. . . . . . . . . . . . . . . . . . . . . . . 69

Appendix E: Sources of Further Information. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 75

1

This guidebook explains the process,problems, and rewards of redeveloping brown-fields. It can help property owners bring theselands back to active and profitable use. It mayalso help property buyers, tenants, and neigh-bors better understand brownfield redevelop-ment issues.

Chapter 1 answers key questions aboutbrownfields and discusses some of the reasonsthat property owners should consider cleaningup and redeveloping their brownfield proper-ties. While there are many advantages tocleaning up and redeveloping brownfieldproperties, there are also many challenges andpotential pitfalls. The following chapters of theguidebook explain the brownfield cleanup andredevelopment process and the issues thatproperty owners may need to address.

This guidebook is not a comprehensiveauthority on brownfields. Property ownersshould consult additional sources and considerworking with experts from a variety of fieldsfor guidance and advice.

WHAT IS A BROWNFIELD?

The term brownfield typically refers toland that is is abandoned or underused, inpart, because of concerns about contamination.The federal government defines brownfields as “abandoned, idled or underused industrialand commercial properties where expansion or redevelopment is complicated by real orperceived environmental contamination.”

Brownfields may make you think of dirty,blighted, abandoned industrial property, butthat image is too narrow. Though some

brownfields are old industrial sites, others arecommercial buildings with little or no environ-mental contamination. Brownfields could be —

• former service stations,• former dry cleaners,• factories,• warehouses,• parking lots,• hangers,• lots where heavy machinery was stored

or repaired,• abandoned railroads,• former railroad switching yards,• air strips,• bus facilities,• landfills,• and many more types of facilities.

Many of these brownfields could beturned from possible liabilities into successfuldevelopments.

DO I OWN A BROWNFIELD?

Ask yourself —

• Is my land idle, vacant, or less productive than it ought to be?

• Are concerns about environmental contamination contributing to the problem?

If you answered yes to both questions,then you might own a brownfield.

The Basics Chapter 1

2 A GUIDEBOOK FOR BROWNFIELD PROPERTY OWNERS

WHY THE INTEREST IN HELPING BROWNFIELD OWNERS?

When brownfields sit idle, everybodyloses. Neighbors face environmental worriesand reduced property values. Cities see roads,sewers, and other infrastructure underused.New business seeks out “greenfields” or unde-veloped land, encouraging sprawl. And brown-field owners must deal with a long list ofworries — from potential lawsuits to derivingtoo little income from their property.

When developers clean up brownfieldsand put them to new uses, many people bene-fit. Cleanups address environmental problems.Redevelopment can bring new jobs and highertax revenues. Revitalized brownfields canbreathe new life into neighborhoods.

Brownfields offer opportunities that gobeyond their old uses. Developers have trans-formed brownfields into everything from golfcourses and driving ranges to mixed develop-ments with housing, offices, shopping, andopen space. Smaller properties have foundnew life as bakeries and greenhouses. In short,many uses may be open to a clean site.

Many communities, businesses, and environmentalists agree that brownfield redevelopment is worth encouraging. As aresult, a variety of private and public sectorguidance and incentives have been developedto encourage brownfield redevelopment.Redevelopment is seldom easy or risk-free. Butif done right, redevelopment can bring specialrewards: peace of mind, income, and a cleanerenvironment.

WHAT ARE THE BENEFITS OF BROWNFIELD REDEVELOPMENT?

In addition to providing benefits to sur-rounding communities, property owners thatclean up and reuse their brownfield propertiesmay benefit directly by:

• Avoiding potential environmental enforcement actions by federal, state, and local regulatory agencies that couldimpose penalties and costly cleanups;

• Receiving tax benefits for cleaning up and reusing the property;

• Reducing the likelihood that contamina-tion from the property will migrate off site or into the groundwater under the site, thereby limiting liability for, and long term costs of, cleaning up the property;

• Creating good will within the community;

• Reducing the potential need to address liabilities associated with the property infinancial statements and Securities and Exchange Commission filings;

• Realizing an enhanced return from the property by making it more valuableand marketable.

WHY NOT LEAVE A BROWNFIELD PROPERTY IN ITS CURRENT CONDITION?

Many brownfield owners are satisfied withleaving their properties in their current condi-tion. In some cases the neighborhood propertyvalues seem too low to justify any sort ofinvestment in the site. In other cases, the levelof contamination is so slight that it seemsunlikely to harm anyone.

A property owner who decides to donothing should be sure that the decision isbased on a full understanding of the situation.In particular, the owner should look at possible liabilities for environmental contami-nation. Even potential liability can affect abusiness, making it harder to get credit or raiseequity for projects not directly related to thebrownfield.

Also, a property owner who decides to donothing should make sure that things are notabout to get worse. If the site is posing ahealth or environmental threat to neighbors,delay could lead to bigger injuries and biggerliabilities. On a site bad enough to justify gov-ernment attention, an owner who waits maybe inviting cleanup on expensive terms dictat-ed by the government, possibly with years

3CHAPTER 1

spent with attorneys arguing over the process.Even when cleanup appears to be a losingproposition, prompt cleanup may make senseas a way to cut losses.

DOES THE GOVERNMENT PROVIDE INCENTIVES FOR BROWNFIELD REDEVELOPMENT?

Federal, state, and local governments provide incentives for brownfield cleanup andredevelopment. Some of these incentives areprovided directly to property owners. Certainincentives are offered only to communities andlocal governments, but property owners canstill benefit from these incentives. The widerange of incentives available is discussed in more detail throughout this guidebook.They include:

• Federal, state and local tax incentives;• Grants and low-interest loans;• Technical assistance;• Liability protection; and• Streamlined government oversight

of cleanups.

WHO ARE THE KEY PLAYERS IN BROWNFIELDCLEANUP AND REDEVELOPMENT?

A variety of private and public sectororganizations may play a role in the course ofcleaning up and redeveloping brownfield sites.Not all of these organizations will be involvedat every site. Key players include:

State Environmental Agencies: Propertyowners who decide to clean up brownfieldsites, either for sale or reuse, may perform thecleanup under the oversight of a state environ-mental agency. In addition to overseeingcleanups, state environmental agencies mayoffer incentives such as liability protectionfrom further cleanup.

State Economic Development and PlanningAgencies: Some states provide economicincentives, such as low-interest loans, for the

redevelopment of brownfield properties. Theseincentives may be offered through state eco-nomic development and planning offices thatare interested in attracting new businesses andinvestors to their states, as well as guidingtheir states’ growth.

Commercial Lenders: Some property ownersmay decide to apply to commercial lenders forloans to support the cleanup and redevelop-ment of their properties.

Technical Consultants: Technical consultantscan help property owners design and implement the investigation and cleanup ofenvironmental contamination on their proper-ties. Technical consultants may also help property owners work with state regulatoryagencies and communities surrounding their properties.

Legal Counsel: Lawyers can assist propertyowners in many aspects of the cleanup, rede-velopment, and sale of brownfields by advis-ing owners about regulatory requirements,negotiating with regulators and prospectivebuyers, drafting sales agreements, and commu-nicating with surrounding communities.

Citizens and Community Groups: State andfederal cleanup programs may require publicinvolvement such as opportunity for noticeand comment from the public. Furthermore,some economic incentives, such as grants andloans, may not be available unless supportedby the surrounding community. Even whennot required, property owners may want toprovide information and consult with commu-nities surrounding brownfield properties tofacilitate acceptance and support for cleanupand redevelopment.

Local Government Agencies: Local economicdevelopment, planning and tax agencies mayprovide incentives for brownfield redevelop-ments in order to attract investors and busi-nesses to their communities, guide growth, andincrease jobs. Local health agencies may havean interest in ensuring that contaminants onbrownfield properties do not pose a threat tocommunity health.


United States Environmental ProtectionAgency (EPA): EPA is unlikely to be directlyinvolved in the cleanup of brownfield proper-ties, because most cleanups will be overseenby the states. EPA provides cleanup and redevelopment incentives and financial sup-port, however, that may be available to someproperty owners.

Developers: In some cases, property ownersmay want to work with developers to deter-mine and implement marketable reuses of their properties.

Brownfield Developers and Investors: Anew group of firms specializing in cleaning upand reusing brownfields has emerged in recentyears. These firms rely on a mix of engineer-ing, legal and real estate technical and finan-cial backing and expertise.

Real Estate Professionals: Property ownersmay want to work with real estate profession-als who can advise on the market for a particular property and can help locate buyersor developers.

Local Community DevelopmentCorporations (CDCs): CDCs, nonprofit organizations created to encourage local urbanredevelopment, can assist property owners in determining the value of a property andmarketing a site.

Federal Government Agencies: Federal government agencies, other than EPA, mayprovide technical and financial support forbrownfield redevelopment including theDepartment of Housing and Urban Develop-ment, the United States Army Corps ofEngineers, the Commerce Department’sEconomic Development Administration, andthe Department of Interior’s Groundworks USA Program.

WHAT DOES THIS GUIDEBOOK COVER?

Every property is unique and propertyowners’ needs and interests will vary.Accordingly, there is not a standard approachor process for brownfield cleanup and redevel-opment. Nor is there a standard time line ororder for making decisions or addressingissues. There are, however, several tasks andissues common to many brownfield cleanupand redevelopment efforts. These include, butare not limited to:

• Determining the value of the property;• Exploring options for redevelopment;• Investigating environmental conditions;• Working with the community

surrounding the property;• Securing needed financing;• Working with state, federal and local

programs that provide brownfield incentives;

• Working with regulatory agencies that may oversee the cleanup;

• Choosing a cleanup option that allows the planned future use; and

• Implementing the reuse or sale of the property.

This guidebook addresses these and otheraspects of brownfield cleanup and redevelop-ment by providing explanations, tips, andinformation to property owners. Appendix Asets out some preliminary questions propertyowners may want to ask themselves as theyconsider whether to clean up and redeveloptheir properties. Although the guidebook isgeared toward property owners, a wide rangeof brownfield stakeholders may find the infor-mation useful.

5

For most owners, the ultimate objective ofbrownfield reuse is to enhance the value ofthe property. The reduction of environmentalthreats is frequently a necessary or advisableearly step in the process. Nonetheless, anowner who spends time and resources to solveenvironmental problems only to discover thatthere is no economic demand for the propertyis unlikely to think the project has been a suc-cess. Unless the site poses an immediate envi-ronmental threat, the owner will want to findout before cleanup what the potential marketwill be for the clean property.

REUSE POTENTIAL

Establishing the potential market demandfor a property can be difficult. It can be evenmore difficult for a brownfield site, where the need to address environmental issues, and their associated costs, introduces addeduncertainty. Nonetheless, a prudent owner can take a number of steps to gauge marketdemand prior to beginning expensive environ-mental work.

For some owners, of course, this processcan start with a review of their own needs.Owners with active businesses already on thesite, or perhaps on a nearby property, shouldfirst evaluate their own potential for expan-sion. The highest use for the brownfield maybe to satisfy those needs. In these situations,even if expansion is some years away, resolv-ing environmental issues now may be to theowner’s advantage. This approach assures thatthe property will be available and poised forrapid redevelopment when the owner needs it,since the potentially time-consuming process

of addressing environmental issues will havealready been completed.

Many owners, however, will not be inter-ested in retaining their brownfield propertiesfor their own use. In these instances, an ownercan turn to a wide range of individuals andorganizations to help judge the potentialdemand for a particular site. The followingsources can help identify the kinds of uses thatthe property might support, the demand in thearea for comparable properties, and the poten-tial price for the property once the environ-mental issues have been resolved. They mayalso have other information useful in planningfor redevelopment. For larger projects, a property owner may consider a formal marketstudy to determine the highest and best use of the property.

Here are some sources for informationabout market demand for and value of abrownfield:

Real Estate Agents will generally have thebest sense of the market for any particularproperty. Many realtors® can tell you therecent sale price for comparable properties inthe same market sector. Some agents are asso-ciated with real estate development compa-nies, which assist larger projects by conductingsophisticated demographic, traffic, and eco-nomic analyses that can provide an objectivebasis for deciding a site’s potential uses andvalues. These development companies mayalso help by proposing potential uses for theproperty based on their analysis — for example,a big box retail use — and then attempting toattract specific buyers who would be interestedin such a use — WalMart, Target or Lowes, forinstance. Very few real estate agents, however,

Determining Demand and Value Chapter 2


can estimate the value of a brownfield site thatreflects any discount for the cost of dealingwith the environmental problems. Althoughreal estate professionals with brownfieldexpertise are becoming increasingly common,most still are not trained to estimate environ-mental costs and are generally uncomfortableeven trying. Instead, they price a propertybased on the value of comparable propertiesthat do not suffer from environmental problems.

Real Estate Assessors work in specializedfirms that deal with unique or hard to compare properties. They have expertise dealing with property with environmentalissues and can be a useful source of informa-tion to property owners.

Local Community DevelopmentCorporations (CDCs) can provide much ofthe same information as real estate agents.Although their functions vary from organiza-tion to organization, most will have a goodsense of the market value of nonbrownfieldproperties in their area. CDCs also frequentlyhave experience working with other neighbor-hood brownfield properties. In addition, sinceprospective buyers often approach CDCs looking for available properties, CDCs willhave a sense of the level of economic anddevelopment activity in the area. Since theirgoal is to promote economic growth, mostCDCs will assist a property owner in marketinga site. This assistance may include support for applications for any public financing that might be available. Finally, CDCs may be able to support the sale of a property forwhich additional construction activity is contemplated by arranging for and perhapsoverseeing necessary construction activities.

Local Redevelopment Authorities and Region Economic or IndustrialDevelopment Agencies can also be valuablesources of information and support. Theseentities are arms of municipal or regional gov-ernment (or, in some instances, independentagencies with a governmental charter) respon-sible for economic development. This meansthat they closely monitor property markets and

know about demand and uses for particularsites. Although they may not be as useful as alocal real estate agent or CDC in estimating apotential sale price for a site, the informationthey can provide should give a brownfieldowner a better sense of the market value of asite. Moreover, these agencies usually havesome relationship to the public programs thatprovide financial support for redevelopmentefforts.

Contiguous Property Owners will often bevaluable sources of information on propertyvalues, demand, and uses. A contiguous ownermay also be considering expansion or needadditional space and, therefore, may be apotential buyer.

Neighborhood Associations, Groups, andLeaders often know about the local real estatemarket. Although these groups are generallyless formally structured than the local CDC,they may have a similar mission of promotingcommunity improvement by encouraging eco-nomic growth. They may have informationabout recent property sales, especially salesthat they helped bring about, and will proba-bly know about other properties currently onthe market, their price, and how much interesthas been expressed by potential purchasers.

Specialized Brownfield Promotional Efforts,primarily based on the Internet, may offersome additional information to a propertyowner. These web sites, sometimes operatedprivately and sometimes by economic develop-ment agencies, frequently list brownfield prop-erties that are for sale. This information, aswell as information from the web page opera-tors about site turnover, can help a brownfieldowner better understand the brownfield market.The web pages can also serve as a dedicatedmarketing tool for the brownfield owner if hedoes decide to sell his site. See Appendix E.

National or Regional Brokerage Firms andDevelopment Companies may publishreports on the development market for largemetropolitan areas that provide useful informa-tion to property owners about the market fortheir properties.

7CHAPTER 2

LAND USE CONSIDERATIONS AND RESTRICTIONS

While looking into the potential demandand uses for a site, property owners shouldalso consider any physical site conditions, inaddition to contamination, that could limit theuse of the property. Property owners shouldalso research possible legal restrictions on theuse of the land, including private restrictionsfound in deeds and public limitations found inzoning and similar ordinances.

Site Conditions can influence future site rede-velopment and reuse alternatives. As with anydevelopment, the property owner should con-duct or obtain an evaluation of the site’s physi-cal characteristics. This evaluation shouldinclude gathering and analyzing preliminarygeotechnical information that characterizes thefill, soil, and groundwater in order to deter-mine the site’s potential for supporting road-ways, parking areas, utility corridors and newbuilding foundations. The conditions evalua-tion should also include an analysis of theextent and location of wetlands on, or adjacentto, the property, the location and capacity ofexisting utilities and hydrogeologic information.

Deed Restrictions are limits on property use found in the property’s deeds. A priorowner — perhaps from more than a centuryago or perhaps from as recently as last year —created these restrictions as part of a transac-tion involving the land. The restrictions maybenefit someone who was not even a party tothe transaction. As a result, the new owner ofthe property acquired something other thancompletely unlimited use of the land.

Some kinds of restrictions are intendedsolely to benefit the parties in the initial trans-action and do not affect the land beyond someidentified time (such as the death of a personor a subsequent transfer of the land). Otherrestrictions, however, are said to “run with theland”; this means that they continue to limitthe ways in which the land can be used bysubsequent owners. Deciding whether any par-ticular restriction runs with the land or is nolonger effective (or may become ineffective in

the future) can be a complicated legal issueand should be reviewed by an experiencedreal estate attorney.

Although deed limitations can take manyforms, there are two principal variations:

Restrictive covenants, as the name sug-gests, specifically limit the use of the property.These covenants are often created when alarge tract of land is subdivided. All of thedeeds for the resulting smaller parcels, forexample, might prohibit any use other thanresidential, prohibit further subdivision, or pro-hibit deforestation of lots beyond a prescribedamount. Restrictive covenants often attempt topreserve neighborhood qualities that thecovenant creators presumed to be desirable.

Easements indirectly limit a propertyowner by making the property subject to alimited use by another person. The most com-mon kind of easement is a right of way, inwhich the person benefitting from the ease-ment is given the right to cross a property hedoes not own. The owner of property subjectto an easement may not interfere with thisright of way and is therefore limited, to agreater or lesser extent, in the uses of theproperty.

Zoning Restrictions are found not in deedsbut in municipal ordinances. Although theserestrictions can often act like restrictivecovenants found in a deed, there is a key difference: zoning ordinances will generallyaffect more than a few properties. Zoningschemes are designed to protect the entirecommunity’s health, safety, and welfare, prima-rily by prohibiting incompatible land uses inclose proximity to each other and by restrictingother detrimental uses of property. A zoningordinance will characteristically divide a community into a number of classifications, or zones, and authorize only certain kinds of uses within each zone (for example, a residential zone, a commercial/retail zone, or a light industrial zone). Other zoning provi-sions may prescribe setback requirements for structures, minimum size requirements,minimum parking requirements, and otherdetails relevant to development.


Regional Plans may also restrict the use of abrownfield site. Like a zoning ordinance, aregional plan regulates land uses in a particu-lar geographical area. A regional plan, howev-er, establishes restrictions across an entireregion, usually several towns or communities.Depending on the nature of the regional planand its relationship to local zoning, a regionalplan may set limits that affect individual prop-erties or it may simply establish general userules to be implemented through local zoning.

Any one, or combination, of these landuse restrictions can have serious consequencesfor the potential reuse of a brownfield site(or any other site, for that matter). The

brownfield owner must carefully researchthese possible limitations as part of the initialefforts to determine the market potential of the site. All but the most sophisticated ownerswill want a lawyer to perform this review,since the relevant provisions in deeds, ordi-nances, and regional plans can often be confusing. Moreover, a competent attorneyshould be aware of court decisions that mayhave interpreted these or other similar restric-tions in ways that may be helpful to theowner. Finally, a lawyer will most likely beessential if the brownfield owner needs toseek an amendment, variance, or other excep-tion to an existing use restriction that preventsproductive reuse of the site.

UNCERTAINTY & VALUE

The value of a brownfield property is usu-ally depressed because of concern about theenvironmental problems on the site and thepotential legal liability associated with solvingthose problems. Prospective buyers of abrownfield site will discount the property’svalue (from its worth if it were free of anyenvironmental problems) based on their evalu-ation of four factors: the best estimate of thecost of the environmental work that will beneeded; estimates of other potential costs relat-ed to environmental contamination, such aspersonal injury or property damage claims; thepossible reduction in resale value of the site if

future use is limited by environmental con-cerns that continue after a cleanup; and anuncertainty premium. Some consulting firmshave developed formulae for determining dis-counts that reflect these factors.

The uncertainty premium reflects theimpossibility of predicting the costs of environ-mental investigation and cleanup with greatprecision. Environmental cost estimates canbe off by as much as several multiples. In arational real estate transaction, a buyer askedto assume responsibility for the environmentalproblems as part of the sale might, for exam-ple, double the estimate of the projected envi-ronmental costs in calculating his offer for theproperty. This margin for error, or premium,would be an attempt to account for the uncer-tainty the buyer faces in actually carrying outthe work. The buyer will set the amount ofthe premium to reflect a number of factorsspecific to the particular transaction, includingthe amount and quality of information knownabout the site, the buyer’s own tolerance forrisk, expectations about regulatory behavior,and other considerations.

The risks and liabilities associated withownership of contaminated properties cannotbe removed entirely, given the scope of obligations imposed under federal and stateenvironmental laws and under state personalinjury and property damage laws. Severalapproaches, including the purchase of insur-ance products and creation of indemnificationagreements, can be used by property ownersand prospective buyers, however, to allocateand, in some cases limit, potential liabilities.These mechanisms have become increasinglyimportant in facilitating brownfields transactions.

For example, the parties to a land transac-tion involving contaminated property arealways free in the contract of sale to addressfinancial responsibility for liabilities betweenthemselves, as discussed in Chapter 9.Depending on the deal, for example, the sellercould commit to pay for cleanup costs if acleanup is subsequently required after thebuyer acquires the site, or the buyer couldassume all financial responsibility (and dis-count an amount from the property’s value as

9CHAPTER 2

represented in the sale price), or the partiescould come up with some division of thesecosts. It is essential that the buyer and sellerunderstand, however, that these contractualprovisions, sometimes called indemnities, onlyestablish responsibility between themselves.These contract terms do not affect the govern-ment’s right to sue any party who can be heldliable under applicable law. This means, forexample, that a buyer may unexpectedly finditself fully liable for cleanup costs if the sellerwho committed in the contract to pay for allsuch costs turns out to be financially insolvent

when the government brings an action.Insurance products can also be used to

allocate and reduce liability. As discussed inChapter 3, environmental liability insuranceproducts may be available that cap the policyholder’s liability for cleanup cost overruns,insure against unknown cleanup costs or liabilities, or help protect lenders from therisks associated with lending for contaminatedproperties. Such policies can both provideassurances to lenders and help to facilitate the sale of a brownfield property.

Although the system of environmental lawsaddressing the responsibility for contaminationon real property is complex, and involves bothfederal law and the many different state laws,the general principles can be readily understood.

Under the federal and many stateSuperfund programs, the current propertyowner can usually be held liable by the govern-ment either to clean up existing contaminationon the site or to repay the government for itscosts in performing this work. Prior owners whoheld title when the contamination was caused orcontinued can often be held liable as well. Non-owners who contributed to the contaminationcan also be held liable. In most cases, a liableparty can be forced to pay for the entirecleanup, rather than just for a share of the con-tamination under a legal doctrine called jointand several liability. The current owner cannotavoid liability to the government for a cleanupsimply by selling the property; in general, thesale simply adds the new purchaser to the list ofparties the government can choose to sue if itdecides to bring a legal action. There are a smallnumber of potentially significant exceptions tothe basic liability rules. The rules and excep-tions are discussed in more detail in Appendix B.

The liability rules that could apply to abrownfield site under other environmental lawstypically are not as comprehensive as some statesuperfund programs or the federal Superfundprogram. Nonetheless, these programs can still

impose broad liability. The liability schemes aredescribed in Appendix B.

Finally, the federal government and manystates have devised special programs to encour-age brownfield reuse, and various provisions ofthese programs may offer specialized protectionfrom liability for persons who agree to redevelopbrownfield sites, as discussed in Chapter 8. Anexperienced attorney will be able to advise own-ers about the application of the various liabilityrules and exemptions.

In addition to liability for cleanup, brown-field property owners may be liable for personalinjury and property damage caused by contami-nation on or migrating from their properties.For example, if community members who livearound the property have been injured by expo-sure to contaminants in their drinking water thatcame from the brownfield property, they may beable to seek damages by filing a law suit, some-times called a toxic tort action.

Property owners can also be liable for dam-ages to natural resources that are caused bycontamination on or from their properties. Forexample, federal or state governments may beable to seek damages under the federalSuperfund law or state laws for injury to streams,wetlands, wildlife, and other natural resources.The method of calculating damages can vary butmay include, in some cases, damages imposedfor lost use, in addition to the costs of restoringthe natural resources.

Environmental Liability

11

A brownfield owner who does not intend to keep his property for his own usefaces a number of options for timing the saleor redevelopment. The owner can attempt tosell the property in its present condition, withall uncertainties about environmental issuesunresolved and with the potential to exposethe purchaser to substantial legal liability forthose conditions. At the other extreme, theowner can address all environmental issuesbefore the sale, reducing (or eliminating)uncertainty and exposing the purchaser to little or no liability. The relative advantagesand disadvantages of these two options, aswell as choices between these extremes, generally reflect the shifting importance andinterplay of cleanup costs, potential propertyvalue and the uncertainties in the process.

SALE “AS IS”

Assuming the current owner could find aprospective buyer willing to purchase the sitein its present condition, with little or no reli-able information about environmental condi-tions or their legal (and financial) significance,the owner might consider an “as is” sale. Inthis kind of transaction, the current ownerwould transfer the property prior to conduct-ing an environmental assessment or carryingout any cleanup activities. Responsibility forthese actions, and costs, would contractuallyshift to the buyer. “As is” clauses in salesagreements are discussed in Chapter 9.

The prime advantage of this kind of dealis that it allows the current owner to relinquishownership rapidly and without incurring the

costs normally associated with environmentalissues. For some owners, this may be ideal.They can realize some revenue immediatelyand can stop paying taxes and other normalproperty costs sooner. This approach may beparticularly useful when the present ownerdoes not have the funds necessary, prior to the sale of the property, to pay for theneeded environmental work. Furthermore, the current owner will not need to spend thetime required to oversee the environmentalassessment and cleanup, which will usually be performed by hired private consultants and contractors.

The significant disadvantage of an “as is”sale is that the current owner may be unableto obtain a price for the property that reflectsits actual value. This kind of sale requires thebuyer to accept maximum uncertainty concern-ing the scope of environmental costs that maybe incurred. In exchange for this, the buyer islikely to discount the price dramatically to protect against higher than expected cleanupcosts. The seller may actually receive only asmall fraction of the property’s real net value.If the environmental expenses turn out to beless than expected, the buyer can realize awindfall. At the same time, the seller will have received far less than the property wasactually worth.

The current owner faces a second prob-lem with an “as is” sale. The reduction inproperty price is intended to reflect the factthat the purchaser will assume responsibilityfor environmental problems. The seller, ineffect, pays for the assessment and cleanup by agreeing to a reduction in the price paid

Reuse andRedevelopment Alternatives Chapter 3


for the property. Unfortunately, by transferringthis responsibility to the buyer, the ownergives up control over the performance of thesetasks. If the buyer performs them poorly, ornot at all, the government might choose to

bring an action against the seller (as a priorowner of the land) to carry out the requiredenvironmental work. If the government is successful, the seller will have paid for thecleanup twice.

Assume that a property owner wishes to sell a former dry cleaning plant, now closed for severalyears. Comparable nearby properties, without environmental contamination, have consistently sold for$500,000. The owner knows that the property has some soil and groundwater contamination fromspilled cleaning solvents and materials. By talking to members of the dry cleaners’ association, theowner learns that other cleaning plants have had very similar environmental contamination problems.He is told by the association that an appropriate environmental assessment should cost about $50,000.Although it is impossible to predict the cleanup costs with any confidence until an assessment is performed, the association tells the owner that the average plant cleanup has cost $100,000.

The following suggests how a hypothetical buyer might try to protect himself from uncertainty aboutsite conditions and costs in the absence of an actual assessment and cleanup, and how the financialbenefits of dealing with uncertainty can vary depending on the premium a buyer requires and its accuracy in predicting the actual environmental costs. This hypothetical assumes that insurance is not used as a means of allocating risk, although in some cases insurance products may be available, asdiscussed in chapters 3 and 9.

Theoretical Net Value of PropertyEstimated clean property value: $500,000Reasonably expected assessment cost: $ 50,000Reasonably expected cleanup cost: $100,000Theoretical site net value: $350,000

Buyer’s Valuation of Property Due to UncertaintyEstimated clean property value: $500,000Assessment deduction, with uncertainty premium (50%): $ 75,000Cleanup deduction, with uncertainty premium (100%) $200,000Buyer’s offer based on uncertainty about true costs: $225,000

Assuming the buyer purchases the site prior to assessment and remediation for its discounted valuation of $225,000, the following two examples depict differing possible financial gains — or losses —the buyer could realize depending on the actual environmental costs he incurs.

Example One: Buyer’s Environmental Costs Are Less Than The Environmental Discount Reflected In The Sale PriceEstimated clean property value: $500,000Actual assessment cost: $ 65,000Actual cleanup cost: $115,000Actual net value of site after environmental costs: $320,000Windfall to buyer from a purchase at $225,000: $ 95,000

Example Two: Buyer’s Environmental Costs Are Greater Than The Environmental Discount Reflected In The Sale PriceEstimated clean property value: $500,000 Actual assessment cost: $ 65,000Actual cleanup cost: $250,000Actual net value of site after environmental costs: $185,000Loss to buyer from a purchase at $225,000: ($ 40,000)

Uncertainty and Reward

13CHAPTER 3

SALE AFTER ASSESSMENT

To reduce some of the uncertainty of an“as is” sale and to gain some ability to negoti-ate a reasonable price for the brownfield site,the current owner could consider carrying outthe environmental assessment (through a con-sultant or contractor, as discussed in Chapter4) before selling the property. The assessmentmight be done prior to even offering the sitefor sale, or it might be done — still at theowner’s expense and under his direction — as part of the discussions with an identifiedpotential purchaser.

The advantages of taking this step areclear. Once it has been completed, the costsof the assessment are known and there is little or no reason for an uncertainty premiumrelated to these expenses. A thorough andprofessional assessment should allow all par-ties to gauge the likely extent of cleanup withsome confidence. While the final costs of thecleanup cannot be predicted with completeaccuracy, a good assessment should result in asignificantly smaller “contingency” for cleanupcost overruns in the final negotiations about aprice for the site.

Performing the assessment in the contextof a specific sale, to a specific buyer, bringsadditional advantages. Designing an assess-ment is not an exact science; decisions need to be made about numbers of samples andlocations, and tradeoffs between the cost ofthe investigation and its comprehensiveness.An owner who commissions an assessmentwithout the cooperation of a buyer — essen-tially an assessment on speculation — runs thevery real risk that when a buyer finally doesappear, he will not be satisfied with the assess-ment. This risk can be managed by delayingthe assessment until the owner believes a par-ticular buyer is serious about acquiring thesite. At this point, the owner might try toincorporate reasonable suggestions from thebuyer about the scope of the assessment.

Finally, there are valid reasons for com-pleting only the assessment, without thecleanup, prior to sale. The cleanup might belengthy but not interfere with use of the site.In such an instance, the buyer may want to

use the site while the cleanup is underway.The buyer might be able to perform thecleanup with its own staff, perhaps reducingtotal costs. Indeed, part of new construction— building foundations, paving parking areas — might actually be components of thecleanup. The current owner might not havefunds for the cleanup phase or may prefer tosell the property sooner, even at the expenseof a lower sale price.

There are certainly potential disadvantagesto the current owner associated with doing anassessment prior to sale. Although assess-ments are usually less expensive than cleanup,they may still cost more than the owner wants,or is able, to spend. While assessments oftenshow that the extent of contamination is lessthan feared, an assessment could reveal suchextensive contamination that any hope of asale may evaporate.

Moreover, some states require owners toreport the discovery of certain kinds of seriouscontamination. Reporting to the federal gov-ernment may also be necessary. In somecases reporting could eventually lead to thegovernment ordering the current owner tocarry out a cleanup. Once again, a prudentbrownfield owner will work closely with alegal advisor to keep aware of reportingrequirements and their potential consequences.

Lastly, in the event of a sale, the currentowner still does not control the cleanup car-ried out by the buyer. As previously dis-cussed, this exposes the current owner to therisk of being forced by the government to payfor the cleanup again, even though the owneralready “paid” for the cleanup by selling theproperty at a price reduced to reflect expectedcleanup costs.

SALE AFTER ASSESSMENT AND CLEANUP

This approach simply takes the sale afterassessment to the logical next step. The cur-rent owner retains consultants and contractorsto conduct any required cleanup identified bythe assessment. At the end of the cleanup, theowner obtains a statement of protection from


future legal liability, if available, from the relevant regulatory agency (or agencies), asdiscussed in Chapter 8. The owner then offers the property for sale, and is able toaccurately describe it as not subject to any current threat of environmental enforcementfor site contamination.

The exact nature of the protection fromliability will vary from state to state, and willalso depend on the kind of cleanup programthat applies to the owner’s brownfield. Someexamples of the various kinds of liability pro-tection that the owner may be able to obtainand pass on to a purchaser are discussed inChapter 8 of this guidebook. Of course,except in a very few instances, liability protec-tion will not protect the owner if new or dif-ferent dangerous contamination is discoveredin the future. Liability protection from thegovernment will not usually block private law-suits by neighbors or others with claims thatthey have suffered injuries as a result of condi-tions originally on the brownfield.

A full cleanup strategy allows the currentowner to maximize the price for the property.The buyer no longer needs to discount theuncertain costs of the assessment and cleanup.Indeed, the price for the property, in theory,should be close to its market value had itnever been contaminated. Further, the currentowner will have avoided the “double payment”risk of transferring cleanup responsibility to abuyer who might default. By carrying out thecleanup, the owner assures that it is performedcorrectly the first time.

Unfortunately, this approach also requiresthe owner to assume, essentially as an invest-ment, all of the environmental costs prior tosale. The total assessment and cleanup costsmay be more than the owner can afford. Theowner is also accepting the risk that the costsmight be higher than estimated — possibly sohigh that it is impossible to make a profit onthe sale. Moreover, placing the cleanup beforethe sale means that financial proceeds from thesale to the owner will be delayed that muchlonger. Finally, unless the current owner canfind a buyer willing to commit to the site andwait for the cleanup to be completed, the

owner might have to do the cleanup withoutan identified new buyer. Again, this risks acleanup that is more costly than necessarybecause it does not incorporate remediationconsiderations or advantages that a specificredevelopment project might offer.

CLEANUP AND REDEVELOPMENT

For current owners with the skills andfinancial capacity to manage it, the final optionis to take the property through the entire redevelopment process. This means arrangingfor the environmental assessment and cleanup,identifying potentially profitable uses for theproperty, overseeing any necessary demolition,rehabilitation, or construction of necessaryimprovements, and finally marketing the rede-veloped property (or retaining the property forthe owner’s business use).

Complete redevelopment offers someunique advantages to a brownfield owner.First, being relatively certain about the end useallows the owner to conform the cleanupclosely to the needs of the redevelopmentproject. This may help keep the cleanup costsdown. Similarly, a brownfield owner may findthat retaining ownership, either for his ownuse or as a landlord, minimizes the potentialnegative financial impact of long-term land use restrictions required by the cleanup (futureuse restrictions are discussed in Chaper 7).While these future use restrictions might lowerthe potential price of a redeveloped property if it were offered for sale, they are unlikely tolower the rents that the owner can charge if he retains the site and leases to tenants whocarry out compatible uses on it. Of course,the rental value of a former brownfield restrict-ed to one kind of use may still be lower thanthe rental value if the property uses were notso limited.

For the owner who is choosing whether to develop the brownfield or to find an alter-native undeveloped greenfield, choosing thebrownfield usually means not having to worryabout arranging capital to buy land or financ-ing for new infrastructure development.Brownfields, by definition, are sites already

15CHAPTER 3

served by most, if not all, necessary utilitiesand services. As greenfield developmentbecomes increasingly challenged to disclose its true costs, and greenfield developers moreand more are asked to pay impact fees anddevelopment charges, brownfield sites becomeall the more attractive. This advantage remains even if in some cases old infrastruc-

ture needs expanding or updating.Redevelopment is not, however, without

its risks. The advantages and disadvantages ofthe development/redevelopment business aregenerally well-known. Redevelopment is acomplicated and unpredictable undertaking.Most brownfield site owners are not redevel-opers and may not have the skills or time to

The Role of Insurance in Brownfields Transactions

Insurance can help reduce the risk for manyof the key players in a brownfield transaction,thereby facilitating cleanup and redevelopment.For example, insurance can reduce the risk to aproperty owner who wants to sell a property butis concerned about potential liability for environ-mental contamination discovered after the sale.Insurance can also help reduce a prospectivebuyer’s risk of potential liability for cleanup orfor personal injury and property damage claims.These and other kinds of insurance are increas-ingly helping to encourage lenders to provideloans for contaminated properties. In addition,as discussed in Chapter 4, insurance can be used to reduce the risk of potential liability ofcleanup contractors.

The number of insurance companies thatprovide environmental liability coverage isincreasing, as is the number of policies issued.Property owners should confirm that they do notalready have coverage under pre-existing, tradi-tional insurance policies that could reduce theirpotential environmental liabilities. In many cases,however, the purchase of a new policy will benecessary to obtain the desired environmentalliability coverage. The new insurance productsvary based on the particular policy and insurer,but the following general types of insurance aremost commonly used in brownfield transactions:

Cleanup Cost Cap Insurance: These insurance policies cover cleanup costs that far exceed theestimated costs of cleanup. By placing a cap onthe policy holder’s remediation costs, these poli-cies address the uncertainty or risk that the costof an environmental remediation project willgreatly exceed the amount estimated on thebasis of an environmental investigation andcleanup plan.

Environmental Impairment Insurance: Theseinsurance policies provide coverage in two gen-eral areas. The first category of policies covers

cleanup of contamination unknown at the time of issuance of the policy. Depending on the policy, only cleanup costs incurred in response to legal requirements or government orders maybe covered. The second category covers claimsby third parties for personal injury or property damage. Numerous types of policies may beavailable and marketed under a variety ofnames. Property owners may need to selectamong various coverage options and can com-bine, for example, site remediation coverage with coverage for third party personal injury and property damage in a single policy. Often,an assessment will be required before coverageis provided and any contamination identified in the assessment will not fall under the policy.Typically, the policies only provide coverage for a limited period of time and contain numerous exclusions, restrictions, and limita-tions. Because some of these policies areacquired at the time of transfer of property, they are sometimes referred to as “propertytransfer” insurance.

Secured Creditor Insurance: This insurance isintended to protect lenders against loss of col-lateral value, the inability of a borrower to repaya loan because of cleanup costs incurred, and lia-bility for environmental conditions at propertiesforeclosed on by the lender. When a borrowerdefaults on a loan as a result of remediationcosts incurred, such policies typically pay thelesser of the outstanding loan balance or thecleanup costs of new or pre-existing environ-mental conditions. The policies also can coverpersonal injury and property damage claims, aswell as cleanup costs that are incurred when aloan is in default. Among a variety of other limi-tations on coverage, in many cases contamina-tion must be unexpected and unintended, andthe discovery of on-site pollution must occurafter the loan is made.


carry out a project successfully. Land develop-ment can take a long time and can tie up largesums of money. During the lengthy develop-ment process, unexpected obstacles may arisethat can make a project more costly than first anticipated or terminate it completely. As compared to greenfield redevelopment,therefore, brownfield redevelopment mayrequire a greater amount of capital (to addressthe environmental issues at the outset) and tieup capital for a longer period of time (becausethe environmental issues can add months oryears before formal site construction can evenbegin). Finally, many of the state and federalfinancial incentives for brownfield redevelop-ment are aimed at encouraging “innocent” par-

ties to become involved at these sites. Thisoften means that current owners, who can beseen as having responsibility for existing con-tamination, are not eligible for financial assis-tance that might be available to new owners or redevelopers.

In exchange for these problems, a success-fully completed project offers a much higherpotential return to the property owner thanwould a simple sale of the brownfield afterassessment and cleanup, but before redevelop-ment. The owner can anticipate large poten-tial rewards for having risked capital andappropriately resolved or avoided the numer-ous obstacles encountered during the lengthyredevelopment process.

17

Property owners consulting this guidebookmay already suspect that their properties haveenvironmental contamination. Although acomprehensive understanding of the extent ofactual contamination will require the servicesof a professional environmental consultant, abrownfield owner can take some initial stepsto help answer basic questions and narrow the scope of any formal investigation thatmight be needed.

COLLECTING BASIC BACKGROUND INFORMATION

An environmental assessment that mustconsider every square foot of a brownfield site and search for every known chemical islikely to be prohibitively time-consuming andexpensive. Before the consultant begins theassessment, the owner can gather basic infor-mation that can help limit the scope of investi-gation. The owner can research questionssuch as these:

• What kinds of industrial chemicals, cleaners, solvents and other potentially contaminating materials, if any, does thecurrent business use? What has been used on the site in the past?

• What kinds of inventory control information for these materials does the business have? Can it help identify any unexplained losses of any of these materials?

• What kinds of wastes does the business generate from its operations? How and

where does it store the wastes prior to disposal? Where does it dispose of the wastes? Where has it disposed of wastes in the past (with particular interest in any disposal on the property)?

• What spills of materials or wastes have occurred, and where? What spill cleanup was performed?

• Where are above and below-ground storage tanks? Floor drains? Piping systems? Waste discharge pipes? Cisterns and tile fields?

• What prior businesses existed at the site, before the current owner? What information about their practices can be learned?

• What information about site conditions already exists in government regulatory files, at either the local, state, or federal level?

Much of this information can be found incompany records and files. Some of itrequires research at government agencies.Owners should be careful, however, not tooverlook the valuable information that canoften be obtained from company employees.Senior personnel may be able to rememberwhen storage and disposal practices differedfrom current standards. Assuming some conti-nuity in business activities, long-time employ-ees may be the best source of informationabout attitudes and practices under earlier, different, ownership.

InvestigatingEnvironmental Conditions Chapter 4


MOVING TO A MORE FORMAL ASSESSMENT

Informal efforts can produce much valu-able information. With this information inhand, the owner must decide whether to bringin specialists to conduct a more professionalinvestigation.

Some sites — especially those only recent-ly developed — may have no contamination atall. Available information may substantiate thebelief that the site is in good condition: forexample, no lost inventory of chemical materi-als, no spills, careful off-site waste disposalpractices, and double-lined storage tanks.

More often, however, preliminary researchwill point to possible problems. It will revealthat materials have been lost or spilled. It will disclose on-site disposal practices or leak-ing tanks. This information is invaluable tothe owner in judging whether to seek anassessment and how extensive an assessmentto request.

Assessments come in all sizes and budg-ets. Each assessment, to a large extent, mustbe tailored to answer questions about a specif-ic brownfield site based on the informationalready known about that site. This variety,and the tendency for environmental profes-sionals to use unfamiliar terminology exclusiveto their work, can often leave owners and others confused about what kind of activitiesmight be included within an assessment.

This confusion is easily dispelled. Anenvironmental assessment actually consists ofseveral stages, not a single event or act. Thegoal of this process is to move from knowinggeneral information about a site to knowingspecific information about site conditions,through a series of ever more preciselyfocused inquiries. When contamination hasbeen identified, the last stage of the assess-ment in many instances is the preparation of astrategy to clean up the site or isolate the envi-ronmental risk.

Although there is no official definition of each of the stages of the assessmentprocess, there is general agreement about thepurpose of each stage. There is also rough

agreement about the terminology that appliesto each phase:

(a) Phase I Assessment. The first stage isdesigned to identify and review all relevantand already existing data that might provideinsights about potential contamination. Thiseffort, typically, would involve most of theinquiries that a prudent owner would make inpreliminarily evaluating the need for formalassessment of the site, such as a review ofbusiness practices and documents, review ofagency files, employee interviews, andresearch into prior uses and activities at thesite. Usually, the investigators would also con-duct a site inspection to identify areas of obvi-ous environmental stress or releases ofcontaminants. The purpose of these efforts,often referred to as a Phase I assessment, is todevelop information identifying particular areasof the site most likely to have contaminationand information suggesting the likely nature ofthe contamination.

(b) Phase II Assessment. Using the Phase Iinformation, investigators will develop a planto collect samples of wastes stored at the siteand of soil, groundwater, stream beds and sed-iments, or other areas that may shed light onwaste spills and releases. A thorough plan will usually call for collection of a number ofsamples from each specific suspected contami-nation location and a number of additionalsamples from random locations to confirm thatno other areas present problems. Investigatorswill collect the samples and analyze them for arange of possible chemicals expected to bepresent based on the Phase I information.This stage is often referred to as a Phase IIassessment; it is sometimes called a Phase IIcharacterization assessment.

(c) Phase II Delineation/Phase III. Phase IIassessments often confirm the existence ofcontamination at one or more locations at asite. Unfortunately, these initial results willusually not define the full extent of the con-tamination, such as the surface area or depthof contamination present. These details areessential to projecting the cost of cleanup.Investigators will need additional sampling to

19CHAPTER 4

find the contamination boundaries; frequently,the effort to find the farthest reach of the con-tamination will require several rounds of sam-ple collection and analysis, each somewhatfurther away from the location of the originalsample. Depending upon local custom, all ofthese efforts associated with defining theextent of contamination may be called Phase IIdelineation assessment or they may be simplycalled a Phase III assessment.

(d) Phase III/Remediation Plan. Once all ofthe analytical results are available and all areasof contamination have been identified, engi-neers can prepare a plan to address eachproblem area. The plan may propose variousalternative strategies, with varying costs anddegrees of effectiveness. Depending on a variety of considerations, the plan may rely on treatment, removal, or placement of one or more barriers around the contamination.Again, local custom will determine terminolo-gy. In some places, this plan is called a Phase III, in other places it is called a reme-diation plan, a response action plan, or similar name.

The EPA and state agencies have regula-tions and guidance documents that providesuggestions or minimum requirements for eachof these stages. Professional and trade associ-ations, such as the American Society of Testingand Materials (ASTM), have also developedrecommendations. In particular, the ASTMstandard for conducting a Phase I assessmenthas a wide degree of acceptance. Ownersmay want to review it before taking their ownpreliminary look at site contamination. ASTMhas a number of other helpful guides, includ-ing an overall process standard that makes rec-ommendations for managing a brownfieldassessment and cleanup and for interactingwith local community interests. Appendix E of this guidebook lists additional sources ofguidance. Owners will often be best servedby employing ideas or elements from a numberof sources.

OBTAINING FUNDING

Before committing to an assessment andbeginning the search for a competent consult-ant, a brownfield owner should begin to inves-tigate potential sources of public funding.Brownfield redevelopment is an importantpublic policy objective, and numerous incen-tive programs at all levels of governmentencourage site reuse. Chapter 6 of this guide-book includes a general discussion of govern-ment financial support for cleanups. Amongthe programs providing support for assess-ments and investigations described in Chapter6 are EPA’s Targeted Brownfields AssessmentProgram and a number of state and local eco-nomic development programs.

The eligibility requirements for these programs vary and the application of these eligibility requirements can often have a direct impact on the redevelopment strategyand the timing of the transfer of ownership.For instance, it may become desirable to sellthe property to a new, and innocent, purchas-er prior to assessment or cleanup if the newowner is eligible for one or more assistanceprograms. A brownfield owner placed in this, or similar positions, may want to includeprovisions in the sale agreement that adjust the price if the buyer is subsequently able to obtain funding for environmental work onthe site.

ALLOCATING THE COST AND RESPONSIBILITY FOR THE ASSESSMENT

The extensive publicity and attention paidto hazardous waste problems and site contami-nation over the last decade means that mostpeople now realize land ownership can bringwith it expensive responsibility for environ-mental problems. As a result, it is extremelyrare to find a potential buyer so unsophisticat-ed that he will consider buying property previ-ously used for commercial or industrialpurposes without requiring an assessment ofthe site. As a practical matter, the currentowner of developed land should not expect to


sell the property without an environmentalassessment being conducted at some pointprior to sale.

Sellers and buyers frequently include dis-cussions about the timing and responsibilityfor the assessment as part of their negotiations.The parties may agree that the seller should dothe assessment, that it be done jointly, or thatit be done by the buyer. They may alsoinclude provisions in the contract which limitdisclosure of the assessment. For example,some sellers may allow a period of time for aprospective buyer to come on the site, performan assessment, and then decide whether to gothrough with the sale. Some sellers, however,may also require a provision in the agreementthat the buyer not disclose the results of theassessment to the seller. Through such a provision, sellers may hope to avoid gainingknowledge of environmental conditions thatthey might be obligated to disclose to the government or to future prospective purchasers.It is not clear whether these kinds of provi-sions are effective, or wise. Finally, any agree-ment for sale will assign or allocate the cost ofthe assessment, either implicitly or explicitly,as a part of the final financial arrangementsbetween the buyer and seller.

As in many other situations, it is essentialthat a knowledgeable lawyer be consultedwhen a transaction involving contaminatedproperty is under discussion. In most states,land transactions must be by written contract,and the need to address the question ofresponsibility for investigating and respondingto environmental conditions will require care-ful drafting.

WORKING WITH A CONSULTANT

The environmental assessment processmay require a broad range of skills: an understanding of applicable regulations, engi-neering proficiency, soil science expertise,hydrogeology knowledge, sampling and well-drilling capabilities, and several others. Fewbrownfield property owners will possess theseskills themselves or even have these myriadtalents within their organization. Most brown-

field owners will need to turn to an environ-mental consulting firm to perform the neces-sary assessment.

The selection, hiring, and management ofan environmental consultant can be difficultand frustrating. Attention to some criticaldetails can minimize the chance of disappoint-ment and lead to a smooth and satisfying busi-ness relationship.

(1) Prequalify. Try to learn as much as youcan about the environmental firms you may bechoosing from. Talk to others who have usedfirms and learn of their experiences. Did theconsultant keep them informed of develop-ments? Did the consultant perform the workfor the original budget? Was the consultantable to explain to the client project develop-ments in words the client understood? Did theconsultant appear to address questions fromenvironmental officials promptly and thorough-ly, or did there need to be several exchangesof letters before regulators were satisfied? Ifpossible, talk to state and federal officials whowork in the area and see if they would bewilling to share opinions about consultants’recent performances.

Since each individual state’s cleanup andbrownfield programs will have its own rulesand procedures, you should confirm that anyfirm you are considering is familiar with therelevant program, and agency officials, in your state.

(2) Use the solicitation process as a screening tool. Unless you have an estab-lished relationship with one firm, or haveanother reason to immediately select a specificfirm, you will probably want to obtain bids orproposals from several firms. Use the requestfor these proposals as a tool to help youdecide among the firms. For example:

• Carefully define the project: If possible,prepare a scope of work that identifies specific tasks you need to have per-formed. This will ensure not only that the bidders understand what you want but also that proposals are similar and can be easily compared. Include a task requiring the consultant to prepare an

21CHAPTER 4

engineer’s cost estimate for remediation if the assessment discovers contamina-tion in excess of regulatory standards. Although this number will only be an estimate, it will provide some approxi-mation of cleanup costs, often the most significant factor in a brownfield project.Without this task in the scope of work, the owner might have to go through another selection process to retain a firm to generate this information, or have to accept a potentially costly change order to authorize the original firm to expand its scope.

• Request references and qualifications:Require proposers to describe not only their firm’s experience with similar projects but also to name specific, experienced individuals who will work on your project. This section of each proposal should also list any required professional licenses or certificates possessed by the consulting firm.

• Request a project description: Ask the proposers to restate their understanding of the project and to describe their approach to meeting the objectives. Requiring some narrative component to each proposal will give you not only aninsight into the firm’s comprehension and creativity but also some sense of their ability to express their thoughts in a clear manner.

• Require a proposed schedule: Ask for a clear timetable for the project. If meeting deadlines is critical, emphasize this in your request.

• Determine the contract type: Specify thetype of contract you want to negotiate: usually, either a time-and-materials contract or a fixed-price contract. Also, require a unit cost schedule so that you can gauge what unexpected additional tasks might cost.

• Request a standard contract: Ask for a copy of each firm’s standard contract sothat you can quickly evaluate whether

any conditions are unacceptable, beforeyou spend time analyzing the proposal.

• Require insurance coverage: Ask each firm submitting a bid to provide a description and proof of insurance coverage for environmental impairments.The insurance must protect against actions by consultants that worsen existing site conditions.

(3) Maximize your information. Althoughyou do not want to prolong the selectionprocess, there is no reason to make theprocess excessively formal either. If you donot understand something in a proposal, askfor clarification. If you have not worked withan environmental consultant before, try toarrange for a meeting to evaluate interpersonalskills. You may invite all bidders to the sitefor an orientation visit before they submit theirbids, or you may simply ask for an opportuni-ty to interview the consultants.

(4) Select wisely. Even the best scope ofwork cannot foresee every eventuality. As aresult, cost projections are inherently unreli-able. While this does not mean that cost dif-ferences between bidders are irrelevant, usingthe low cost bid as the sole decision tool canbe a misguided strategy. Where competingproposals are relatively close in cost, select theone that is stronger on other, more substantiveconsiderations.

(5) Use contract negotiation constructively.Having selected a firm to perform the assess-ment, use the contract negotiation phase toestablish a constructive relationship. Object tostandard contract terms or conditions if theyseem unreasonable; few consultants will risklosing a contract at this stage by refusing evento adjust boilerplate language. For example, itis not unusual for consultants’ contracts to con-tain standard language limiting liability forerrors to the amount of the contract. Propertyowners may be able to negotiate removal, orat least revision, of such terms. Reach agree-ment on expectations about progress report-ing: property owners may want infrequentformal reports, frequent informal reports, or


some combination. Make sure to understand,before work begins, if there are any pointsduring the assessment where it will be neces-sary to make decisions about the course ornature of the investigation. Most importantly,ensure that the firm or individual selectedagrees that its role during the project is to (i)report factual findings; (ii) make recommenda-tions if there is a need to refine the scope ofwork that is to be performed, especially inlight of information developed as the assess-ment proceeds; and (iii) explain the significanceof findings in terms of regulatory standardsand other health and environmental concerns.

(6) Manage the assessment intelligently.Having selected and retained a consultant,resist the temptation to simply trust in the skilland good faith of your expert. Make sure thatthe agreed upon progress reports are provid-ed, and read them thoroughly. Ask questionsabout any information that is unclear. Period-ically ask the project manager whether theassessment is on schedule and under budget.Closely monitor any interaction between yourconsultant and regulatory officials.

Managing the assessment also includesmaking a decision about the extent of interac-tion the property owner (or other partyresponsible for initiating the investigation) andits environmental consultant should seek withthe environmental regulatory agency duringthe process. In some situations, the applicableprocedures will require a certain level of con-tact. For example, the rules of a state volun-tary cleanup program may require submissionof the proposed scope of work for approval orfiling draft sampling results for review, as dis-cussed in Chapter 7. An experienced environ-mental attorney can provide advice aboutwhether such requirements apply to a specificproject. In many instances, however, theproperty owner may be able to design andcarry out the assessment without ever havingto discuss any aspect of the work with thegovernment. The first required contact mayoccur only if formal approval (and possiblerelease of liability) is sought for the assess-ment, or for subsequent cleanup results.

Property owners may, therefore, enjoy agreat deal of discretion about whether to

What if Your Informal Investigation Turns Up No Problem?

You turn out to be one of the lucky owners:your informal investigation seems to show thatyour property is free of contamination. Youbought the site undeveloped, built a business onit, and have been extremely conscientious aboutspills, disposal practices, and general housekeep-ing. The question remains: can you sell or rede-velop without paying for a professionalassessment report?

The answer is probably not. If you plan toredevelop the site for your own purposes, anddo not have plans to sell it in the foreseeablefuture, you have very little reason to fearenforcement by government regulators. Anassessment report that merely confirms yourown conclusions, therefore, is of little use to you.Still, if you need bank financing for your project,it is likely that the loan reviewers will be encour-aged by your glowing report but not completelypersuaded. An owner in this situation shouldnot be surprised to find the bank requiring apreliminary or Phase I assessment by an inde-

pendent environmental consulting firm. This limited review of existing site information would largely serve to document your findings.It is possible that the bank would be satisfiedwith this level of effort, and not require addi-tional information before considering the loan application.

If you are hoping to sell your property, theabsence of any obvious evidence of contamina-tion should help to attract potential buyers. Newowners, however, often are very worried aboutacquiring property with undiscovered contamina-tion problems and assuming the legal liability forcleaning them. Prospective purchasers willalmost certainly insist on a Phase I assessmentby an outside firm. It is likely that they willrequest, as well, at least some actual soil andgroundwater sampling to substantiate the beliefthat the site is clean. The scope of this samplingactivity should be much more limited — and thusless expensive — than if the preliminary informa-tion suggested areas of actual contamination.

23CHAPTER 4

involve the government in their assessmentand other brownfield activities. Voluntarilyseeking agency participation in the process canbring a number of advantages. Agency per-sonnel may add information about site condi-tions to those already known by the owner.Agency technical experts may be able to offersuggestions that will make the assessmentmore comprehensive, more representative, ormore efficient. Once an agency has endorseda particular scope of work, it is much less likelyto reject the resulting assessment report as beingintrinsically flawed or insufficiently thorough.

Nonetheless, there are clear potential pit-falls in this approach as well. Agency staffwith limited resources may take a long time toreview proposed work, introducing more delayinto the process. Some reviewers may seek to enlarge the scope of work, unnecessarily,based on a belief that more data is always better. Bringing the project to the agency’sattention early in the assessment may lead toheightened interest by the agency throughoutthe entire process, including interest undesiredby the owner at certain stages.

There is no single level of interactionwhich is right for every project. A workablegeneral guide is that projects that presentunusual or difficult assessment or cleanupdecisions warrant more interaction, and proj-ects that present relatively straightforward decisions about, for example, number andlocations of samples will not benefit as muchfrom interaction with the government. Ownersshould always, however, seek guidance fromthe environmental consultant they select aswell as from their legal advisors.

TAKING THE NEXT STEP

In the best of worlds, the site assessmentresults confirm that there is no environmentalcontamination worthy of regulatory concern.In those situations, the property owner canavoid the brownfield label and market the siteas free from environmental liability. Somestates may even offer a certification that thesite requires no cleanup, which can serve asan additional incentive to buyers.

Many sites, of course, will prove to haveenvironmental contamination in some areasthat exceeds applicable maximum regulatorylevels. These sites require some action, bothto bring them into compliance with legalrequirements and also to make them attractiveto potential tenants or buyers.

It is difficult to generalize about thecleanup responses that the brownfield ownermay be able to choose from at this point.Contamination levels can vary quite widelyfrom site to site, and cleanup options can varyeven more widely. Some sites will require acleanup consisting of nothing more than theexcavation and removal of a few wheelbar-rows of soil. Other brownfields will requirethe removal of massive amounts of wastes, ofmany truckloads of soil, or operation ofgroundwater treatment wells for many years.

Selecting a cleanup option from this arrayof choices requires careful consideration ofnumerous factors. The owner must weighcleanup options in light of the degree of con-tamination and the potential future use of thesite. The owner should involve real estateadvisors, the environmental consultant whoperformed the assessment, and legal counselknowledgeable about the relevant environmen-tal requirements. The expertise of all theseindividuals may be necessary to select the bestpath. Cleanup decisions and the governmentprograms that govern them are discussed inmore detail in Chapter 7.

25

The community around a brownfield canbe a powerful force supporting the redevelop-ment of a long-abandoned property. Amongother things, community support can helpbrownfield plans win approval of agencies andelected officials. On the other hand, commu-nities that feel that they have been entirelyexcluded from the redevelopment process orfeel that their views have been disregarded bythose responsible for the process can becomesignificant roadblocks that can enormouslycomplicate a brownfield project. In short,community interests can play a crucial role inmaking a brownfield redevelopment project asuccess, or a failure. This chapter offers guid-ance for property owners and others who wishto design a meaningful participation process.

The community will often see itself ashaving a great deal hinging on the future of abrownfield site. After all, it is the communitythat perceives itself as having suffered any illeffects from exposure to conditions on theproperty. It is the community whose otherproperty values may have declined due toproximity to the brownfield. If the site hasbeen unused for any period of time, local resi-dents will suffer the greatest loss of employ-ment opportunities. Property owners who canaccept the community perception of itself as acritical partner in the redevelopment processare more likely to develop a constructive rela-tionship with the community and its members.

Most people and most communities wantto feel they have some control over their livesand that their surroundings do not dominatethem. The willingness and ability to change aproject in response to community concernscan be critical to building support for a proj-ect. Rapport and credibility depend on trust

and a continuing exchange of views.Some brownfield projects will fall under

laws that require open disclosure of informa-tion and prescribe a public participationprocess. For example, many state voluntarycleanup and brownfield programs require certain types of public participation. Manyother brownfield projects, however, will not besubject to legal requirements regarding publicprocess or the legal requirements will be minimal. Here, the owner or redeveloper will have great latitude in deciding how andwhen to involve the community effectively.These decisions require a careful balancing ofthe benefits that may be gained from publicparticipation and support against the possiblecommitment of time and effort needed toallow such participation to occur.

Developing a relationship with the com-munity is a skill every much as specialized asconducting an assessment on the site. Thebrownfield owner may find that its consultantand environmental attorney can be helpful indeveloping and implementing a communityinvolvement strategy. Some experienced envi-ronmental professionals have well-developedpublic participation capabilities that canenhance the owner’s relationship with thecommunity. Before asking your advisors toplay this role, however, confirm that they haveactual experience in community interaction. Ifthe owner decides not to use any of the envi-ronmental professionals, there is a network ofneighborhood facilitators who can providesuggestions for someone to help guide the dialogue. In addition, guidance documents,such as the American Society for Testing and Materials Standard Guide to the Process of Sustainable Brownfields Redevelopment,

Community Involvement Chapter 5


provide suggestions and recommendations forworking with communities. See Appendix D.

A brownfield owner who wishes toinvolve the community in a meaningful way inthe redevelopment process should considerdevising a careful strategy at the earliestopportunity. There is no standard approach tocommunity involvement. Property owners willneed to develop a strategy for their particularsite. Several general principles, however, mayhelp property owners develop and implementtheir efforts to work with communities.

Early and Pro-active Outreach: Learning thecommunity’s interests, including the interestsof various community organizations, can be animportant first step in encouraging acceptanceand support for the project. Community inter-est in brownfield cleanup and redevelopmentprojects will range from apathetic to passion-ate. The interest may vary depending onmany factors, including the relative size of theproject, both physical and financial, and thehistory of the site.

Ideally, initial dialogue between the owner and community interests should occureven before the environmental assessment isconducted. Especially at sites that have not seen activity for some time, the suddenappearance of visible and energetic activity on a brownfield can create uncertainty andanxiety in neighbors. This is all the more likelyto occur if the consultant and its employeesare dressed in unusual protective gear or areconducting what appear to be scientific testson the site (which is what the act of samplingmay resemble).

One way to avoid this understandableanxiety is for the owner to reach out to thecommunity prior to the beginning of assess-ment activities. At this stage, it may be suffi-cient for the owner to convey his interest inbringing economic activity back to the site andoutline the steps in the process. Giving the community a clear understanding of thedifferent tasks likely to occur in the comingmonths can be a valuable first step in estab-lishing a constructive relationship. This earlyapproach will also create an opportunity for

a dialog through which the community candescribe its interests in a brownfield redevelop-ment project.

Regular Communication on Key Issues: Asthe process unfolds, the owner should main-tain regular communications with communitymembers and always help residents and neighbors to anticipate the next group of activ-ities that will occur. It is especially importantthat the owner review for the communitywhen key decision points are reached in theprocess. The community will be most interest-ed in two key questions: what kind of cleanupwill be carried out at the site and what newuse or business will be established at the site?Owners who have decided in favor of an openand inclusive process will strive to provide fulland understandable information about thesetopics, including explaining the link betweenthe cleanup choices and the end uses whichmight be brought to the site.

Outreach to Wide Range of CommunityStakeholders: Because communities aremade up of many different groups and inter-ests, property owners should consider makingan effort to work with as many groups as possible, including low-income and minorityresidents near the property. If needed, property owners should consider providinginformation in languages other than Englishand providing translators at meetings.

Promotion of Common Goals and Interests:The brownfield owner’s goal throughout theseinteractions should be to make the communityan ally and supporter for the redevelopment ofthe site. Both owner and community sharemany common goals: better understanding ofthe environmental conditions on the site; acleanup plan that satisfies legal requirements;and redevelopment that enhances the econom-ic profile of the site to the benefit of all.Respect, communication and participation on the part of both the owner and the commu-nity can make it much more likely that thosegoals will be achieved.

The owner’s interest in working closelywith the community is not simply to address

27CHAPTER 5

potential opposing voices. Active communitysupport can be extremely helpful in obtainingassistance from public funding programs toencourage brownfield reuse; these programsare often very responsive to local endorsement.Community support can also be helpful inobtaining favorable consideration from localgovernment when zoning variances or exemp-

tions are required. In some states, approval of the cleanup may be made easier if the relevant agency is convinced there was aneffective public involvement process. Finally,a prospective buyer undecided about a brown-field site may very well be influenced by a visible show of support for both the projectand the buyer’s entry into the community.

Tips for Involving the Community

There are many ways for a brownfield owneror redeveloper to try to involve the communityand keep it informed about the status of plansand activities. Some effective methods include:

• Attending civic association or neighborhood group meetings and giving periodic progress reports;

• Meeting on a regular basis with members of the local CDC staff and providing them with progress reports;

• Holding meetings with interested community members at times and locations convenient for them;

• Meeting on a regular basis with members of the local government (particularly the planning commission or

development offices, if they exist) to offer progress reports;

• Developing a mailing list of involved and interested residents and sending them a regular written report describing progress (if appropriate, this distribution can be done by e-mail);

• Providing updates to local newspapers and newsletters that can result in a seriesof articles reaching a wide readership;

• Ensuring that residents and other interested parties have many opportuni-ties during the progress of the project to offer comments and suggestions, rather than simply receive information about subjects they perceive they cannot influence.

29

Financing a brownfield property develop-ment is often a challenge. The contaminationof the property hurts the prospects of financ-ing in several ways. First, it reduces the market value of the property, meaning theproperty is worth less to potential lenders ascollateral. Second, cleanup cost projectionscan dramatically underestimate the real costs,resulting in the borrower having much lesscapital left to initiate its business activities.Finally, despite some helpful changes in thelaw, lending to a brownfield project can threaten the lender, in some unusual circum-stances, with liability for the underlying environmental problems.

Despite these challenges, some lenders arebecoming more comfortable and familiar withfinancing contaminated properties. Propertyowners should consider seeking out lendersthat have experience with contaminated prop-erties or at least keep in mind the disparityamong banks in experience and comfort indealing with brownfield properties.

TRADITIONAL LOANS

This guidebook assumes that owners anddevelopers have experience in obtaining loansand financing from banks and other traditionalsources and does not attempt to explain thatprocess. The contamination at a site may,however, complicate the process of obtainingsuch financing.

The timing of the application for financialassistance assumes a much greater significancein brownfield projects. Many traditional pri-vate lending institutions will not lend money atthe beginning of a brownfield redevelopment

to pay for assessment or remediation efforts,although there are exceptions. In addition,many banks will decline at the early stageseven to commit to financing the post-environ-mental traditional construction activitiesbecause they fear cost overruns in the environ-mental work that will make their borrower lesslikely to repay. Banks may now be willing,however, to offer financing for the bricks andmortar related to new construction once theenvironmental work is completed and therelated costs are relatively known and fixed.Thus, brownfield borrowers may need to thinkin terms of a series of loans, with the earlyborrowing helping, in effect, to create a morecomplete picture which will encourage addi-tional financing. Subsequent lenders may infact “take out” the initial loan, consolidatingthe debt for the project.

Furthermore, the insurance products thathave become more readily available in recentyears can be used by property owners to pro-vide assurances to lenders with respect toremediation costs. In particular, these policiescan address lenders’ continuing fears that thefinancial viability of a project will be seriouslyimpaired if environmental cleanup costs turnout to be far more expensive than forecasted,either because the remedy proves to be morecostly or because additional contamination isdiscovered. Insurance underwriters now offerproducts that specifically address these con-cerns. These products allow the owner andthe lender to establish a known cap on thecosts associated with addressing environmentalproblems. This certainty provides great com-fort to lenders about the security of their finan-cial position. Some banks may even require

Finding Financing Chapter 6


the applicant to obtain insurance coverage thatwill protect against unexpected costs arisingout of an as-yet-uncompleted cleanup.Insurance products that are available directlyto lenders and to property owners are dis-cussed in Chapter 3.

Applications for bank loans after theassessment and cleanup are completed aremore likely to be viewed favorably when theregulatory agency has agreed that no furtheraction is necessary. As described in Chapter 8,after the cleanup is completed the owner cansometimes receive approval and limited liabili-ty release documentation from the state.These may take the form of a covenant not tosue, a certificate of completion or a no-further-action letter. The bank may also want theresults of the assessments and the final reportsof the cleanup contractor that show how therisk has been reduced.

The federal government has enacted a lawintended to reassure banks that they will notface liability for existing environmental con-tamination on sites they use as collateral forbrownfield loans. In general, the law makesclear that a lender should not be held liable aslong as it acts in the normal role of a lender,including foreclosing and taking ownership ofthe property if that becomes necessary to pro-tect the loan. The mere act of lending shouldnot create a basis for liability. Despite thisprotection, some banks may still be reluctantto lend at brownfield sites, either because theyare not yet familiar and comfortable with thenew rules or because they remain worriedabout cost overruns in the cleanup which canimpair the borrower’s ability to repay.

Changes in the law to offer protection tobanks who lend to brownfield projects is onlyone example of the financing incentives whichhave been created to encourage this kind ofredevelopment. Another is the federalCommunity Reinvestment Act, which providesincentives to commercial banks to lend moneyfor the redevelopment of industrial property.This program is intended to help banks over-come their reluctance to make money availableto brownfield projects by allowing such loans

to count as credits towards each bank’s obliga-tion to reinvest in economically distressed andother needy areas.

BROWNFIELD-SPECIFIC FINANCING

Several government agencies have programsthat provide financial support for brownfieldcleanup and redevelopment. In some cases,private property owners may not be eligible toreceive direct support from these programs,but may be able to work with the direct recipi-ents, such as local governments, to obtainfinancial support. In addition, the eligibilityrequirements for these programs and incen-tives can vary as widely as their actual finan-cial benefits. Many programs, for example,make assistance available only to “innocentparties.” This limitation will generally excludeproperty owners who directly contributed tothe contamination. It will also exclude anyother persons who were directly involved inintroducing contamination to the brownfield.A current property owner who did not actuallycontribute to contamination, however, may beeligible for assistance even though he remainspotentially liable for cleanup under laws basedsolely on ownership.

EPA Programs: The U.S. EnvironmentalProtection Agency’s Targeted BrownfieldAssessment program provides assessment serv-ices, either through government employees,state governments, or private firms under con-tract to the government. Targeted brownfieldassessment, for example, may be carried outby state agencies who receive EPA funding forthese efforts. Additionally, more than 300cities and communities have received fundingfrom the EPA to create pilot programs toencourage brownfield redevelopment. Someof these programs have money dedicated forsupport of assessment efforts, and this fundingmay be available to the site owner.

EPA also sponsors the Brownfields Cleanupand Revolving Loan Fund Demonstration PilotProgram. The program provides money to eli-gible state and local governments that then usethe money to set up revolving loan funds for

31CHAPTER 6

brownfield cleanups. Typically, the fund willcharge low interest rates and use the loanrepayments to provide new loans to clean upother properties. The money from this programmust be used to clean up sites and may not beused for redevelopment, such as constructionof a new facility or marketing a property.

Department of Housing and UrbanDevelopment (HUD): HUD has several pro-grams for which brownfield properties may beeligible. Although HUD has programs that arespecifically designed for brownfields, brown-field redevelopment projects also qualify forsome of its long-standing, traditional programs.Because HUD focuses on urban housing, mostof its brownfield assistance is related to hous-ing in some way, making it less likely to beuseful for purely commercial or industrial rede-velopments. But some HUD offices have beencreative and flexible in applying the rules, so itmay be worthwhile to investigate HUD financ-ing even when the project does not directlyinvolve housing.

HUD grants, in most cases, are awardedinitially to a branch or agency of local or stategovernment. This will require the owner ordeveloper to work through the appropriateoffice to learn about and participate in the pro-gram. Community Development Block Grants(CDBGs), for example, are a HUD programthat provides relatively large grants to localgovernments, which then may use the moneyfor a wide variety of purposes includingbrownfield-related activities. For example, ifenvironmental conditions at a site could affectusers of the project, then HUD funding may beused to pay for environmental assessments ofthe site. Developers may also be able to getlow-interest loans from CDBG funds to pay forcleanup costs.

A local government may be able to useanother HUD program, so-called “Section 108”loan guarantees, to help finance a brownfieldredevelopment. Under this program a localgovernment may issue bonds, which are guar-anteed by HUD and sold by private banks, tocover the cost of a redevelopment. The moneygenerated by the bond sale may be availableto owners and developers who plan redevel-

opment that addresses housing issues or urbanblight. This program may rely on, or requiremore control by, the local government thanmany developers would prefer. Furthermore,the Brownfields Economic DevelopmentInitiative (BEDI), enacted in 1998, specificallyprovides communities with grants to clean upand redevelop brownfields, in conjunctionwith Section 108 loan guarantee funds. Grantsare awarded on a competitive basis and maybe used for any eligible activity under theSection 108 program such as property acquisi-tion, environmental cleanup, and economicdevelopment. HUD awarded $25 million inBEDI grants to 23 communities in 1998; thesame amount was appropriated for 1999.

Brownfields located within a HUD-designated Enterprise Community (EC) orEmpowerment Zone (EZ) may also be eligiblefor additional HUD assistance. Since onlyslightly more than 100 of these ECs or EZshave been established, and property ownershave no control over whether they are includ-ed within such an area, they should simplyknow to ask about their eligibility.

Department of Commerce — EconomicDevelopment Administration (EDA): EDAworks in partnership with state and local governments, regional economic districts, public and private non-profit organizations and Indian tribes to implement economicdevelopment and revitalization strategies indistressed communities. In recent years, anincreasing portion of EDA program funding,including assistance for planning, technicalassistance, revolving loan funds, research, and public works, has involved brownfieldsredevelopment. Between fiscal years 1992 and 1996, EDA disbursed almost $43 million to public and non-profit entities for 25 brown-field-type construction projects. In 1998 alone, EDA provided nearly $80 million to 78 brownfields projects.

Federal Home Finance Board (FinanceBoard): The Federal Home Finance Board hasa Community Investment Cash Advance (CICA)Program that provides advances to memberbanks, and nonmember borrowers, who in


turn use the advances to provide long-termfinancing for housing and economic programsthat benefit families with low incomes. In par-ticular, CICA targets economic developmentprojects located in EZs or ECs that may includebrownfield cleanup and reuse as part of theirrevitalization strategies.

State and Local Agencies: State economicdevelopment agencies may also be a source of financing or other assistance, possibly withfewer restrictions than the EPA programs.Many state economic development agencieshave incentive programs that focus funding onassessment, cleanup, basic construction, andinfrastructure development for brownfield sites. In some instances, these programs aredesigned exclusively for brownfield applicants;in other instances, more broadly defined rede-velopment funding programs give special pref-erence or priority to brownfield site applicants.Larger cities are also beginning to have theirown brownfield programs. Local CDCs andcity redevelopment authorities may be able to provide or identify other sources of fundingfor brownfield projects, often for both environ-mental and construction costs.

In addition, some local governments have used Tax Increment Financing, or TIFs, to dedicate taxes to secure financing for development activities, which might includebrownfields redevelopment tasks, such as site assessments. The rules for TIFs vary byjurisdiction, but generally they allow local governments to issue bonds to finance devel-opment costs in a specific area, such as siteimprovements or infrastructure. The local government pays off the bonds from theincreased property taxes that result from thedevelopment. TIFs were originally conceivedas a method for redeveloping blighted areas or property that was being ignored by devel-opers, so they are well-suited to helping redevelop larger brownfields areas. Local

governments vary greatly in how they use TIF funds, so property owners will need towork with the local government to determineif and how they can benefit from a TIF.

Tax Incentives: In addition to direct financialassistance, federal and state tax incentives areavailable to property owners and developers tohelp reduce the costs of brownfield projects.The federal tax incentives include the TaxpayersRelief Act, which allows eligible taxpayers todeduct qualified cleanup expenses at eligiblebrownfields in the year they are incurred, andrehabilitation income tax credits for 10% of theexpenses of rehabilitating structures built before1936. Many state and local governments alsoprovide tax breaks for brownfield projects.Two states — Michigan and Pennsylvania —have created special zones, usually in severelydistressed communities, where virtually alltaxes are abated for an extended period oftime. Owners of brownfields in those statesshould learn whether their sites are located in such zones.

VENTURE CAPITAL

Finally, there is a small but growing num-ber of venture capitalists who see brownfieldsites as a form of distressed asset: somethingwhose value has been severely discounted bythe traditional market due to irrational fearsand which therefore offers the potential forlarger than normal return. Although the suit-ability of this funding source will be limited, itmay be quite appropriate in larger brownfieldprojects, where the amount of funding neededis large but the ultimate return on investmentmay also be great. Brownfield owners shouldexpect, however, that venture capitalists willwant to gain an equity share in the project and may also want to exercise some control to protect their investment.

33

Once an assessment is completed, propertyowners can focus on the type of cleanup theywant to perform and the regulatory program, if any, that may apply to the cleanup. Thischapter provides general information aboutstate voluntary and brownfield programs,including eligibility requirements, incentives for participation, and cleanup standards. Thechapter also discusses considerations for prop-erty owners who may want to clean up theirproperties independent of government over-sight. In addition, this chapter reviews proper-ty owners’ general cleanup and reuse optionsand outlines cleanup procedures and tips forworking with consultants.

This guidebook focuses on cleanups understate voluntary and brownfield programs. Otherstate and federal programs, however, couldapply to the cleanup of a brownfield site,including the federal Superfund program, the Resource Conservation and Recovery Act(RCRA) Corrective Action and UndergroundStorage Tank Cleanup Programs, and statesuperfund regulatory and enforcement pro-grams. These regulatory programs could applyif a site is not cleaned up voluntarily and thestate or federal government decides that anenforcement action is necessary to clean upthe property. In addition, in some cases, avoluntary or brownfield program could deter-mine that a specific brownfield property moreappropriately belongs under one of these regulatory programs, because of the type andextent of contamination. It is also possiblethat parts of a brownfield property could becleaned up under a state voluntary or brown-field program while parts of the property are

cleaned up under a separate regulatory program.Accordingly, it is important to determine

prior to applying to a voluntary or brownfieldprogram whether a property should be cleanedup under another program. This can be deter-mined by consulting with legal counsel andtechnical consultants, as well as by gatheringinformation about the various programs fromthe state environmental agencies and otherresources. Appendix B describes some ofthese programs more fully and could be usedas a starting point for understanding the scopeof the various programs.

Some of these programs, most notably the RCRA Underground Storage Tank CleanupProgram and special state programs for cleanupof dry cleaning facilities, rely heavily on volun-tary compliance and may offer financial assis-tance for cleanup. For example, funds may be available to reimburse property owners forcleanup costs in excess of a certain amount.Appendix B also discusses these programs.

In addition, some property owners mayelect to clean up their properties independent-ly, without regulatory oversight. As with con-ducting an assessment without governmentinteraction, this approach may have severaldisadvantages, as discussed later in this chapter.Indeed, this approach may not be an option atall for the cleanup of some properties. Propertyowners with sites that are eligible for inde-pendent cleanups may still want to determinethe state voluntary or brownfield programcleanup standards that could apply to theircleanup, as a frame of reference in cleaning up their properties independently.

Issues Concerning Cleanup Chapter 7


BACKGROUND ON STATE VOLUNTARY CLEANUP PROGRAMS

Voluntary cleanup programs are state-sponsored programs that encourage privateparties to clean up contaminated propertieswithout enforcement by the state. They typi-cally include requirements for eligibility, cleanupstandards, and provisions for overseeing thecleanups. Most of these programs rely on volunteers to propose a cleanup plan, with the state typically reviewing and approving the plan.

Forty-eight states allow volunteers to cleanup contaminated property with some type ofstate review or approval. Only North Dakota,Wyoming, the District of Columbia, and PuertoRico have no system for voluntary cleanups.

State programs vary considerably in how they approach voluntary cleanups and,therefore, property owners should learn thespecifics of the program that applies. Propertyowners can obtain information about theirstates’ programs by searching on the Internetfor the state department of environment website, writing or calling to request information,or by reviewing a book or study that summa-rizes state programs (see Appendices D and E).

Eligibility. The first question for a propertyowner (or prospective buyer) is whether theproperty is eligible for a particular program.This can only be answered by the stateagency, but some types of sites are excludedby many states. Sites often ineligible for a voluntary cleanup include:

• a site that is currently listed on the National Priorities List under the federal Superfund program;

• a site that is being investigated or cleaned up under the federal or state hazardous waste (RCRA) program; or

• a site being cleaned up under a state’ssuperfund or regulatory cleanup program.

A related question is whether the propertyowner is eligible for the voluntary program.Again, only the state agency can answer for a specific person. People who usually areeligible include:

• prospective buyers of the property;• local governments;• community development agencies; and• current owners of the property.

But, some states exclude a property ownerif that person caused the contamination of thesite. Some states also exclude any prospectivevolunteer that:

• is currently in violation of environmental regulations;

• is subject to ongoing enforcement actions; or

• has been convicted of a violation of environmental law.

Even if one or more of the above applies,the potential volunteer may be eligible in manystates and should check with the state agency.

Incentives. Most states provide incentives to encourage volunteers to participate in theirvoluntary cleanup programs. Most states, forexample, offer some form of release from liability upon completion of a voluntarycleanup that the state has approved. Therelease from liability may cover only the contamination addressed by the cleanup,excluding unknown, pre-existing contamina-tion or new releases of hazardous substances,as discussed in Chapter 8.

Other common incentives include:

• expedited or efficient oversight of the cleanup;

• technical assistance;• low-interest loans to volunteers; and• tax credits.

Financial incentives are often offeredthrough economic development programsadministered by state agencies other than theagency overseeing the brownfield cleanups.

BACKGROUND ON STATE BROWNFIELD PROGRAMS

About half of the states have gone beyond their voluntary programs to targetbrownfields not only for cleanup but also forreuse. Some states supplement their voluntary

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programs with programs specifically for brown-fields, while others have separate brownfieldcleanup and redevelopment programs. Thedistinction between voluntary programs andbrownfield programs is not always clear andmay vary from state to state. Voluntary pro-grams typically do not focus on redevelopmentof the contaminated properties, and they may not target urban properties specifically.Voluntary programs often are aimed at gettingsimple, less contaminated sites cleaned upregardless of whether they are reused. Brownfield programs are more likely to focuson redevelopment and may be part of a broader effort to improve distressed urbanareas. Since a particular state may not makesuch distinctions, it is important to look at astate's voluntary and brownfield programs if it has both.

Eligibility. Eligibility criteria are often basically the same as the criteria for voluntaryprograms, as discussed above, but sites must also be abandoned or underused and havepotential for redevelopment. A few states,including Missouri, New York, and Texas, havespecial brownfield programs for municipally-owned property.

Some states have more specific require-ments. In Florida, for example, “brownfieldsareas” must be designated by the local govern-ment based on redevelopment potential, pri-vate sector interest, recreational open spacepotential, cultural and historical preservationvalue, potential jobs, potential economic pro-ductivity, and consistency with local compre-hensive plans and local land use. Delawareincludes sites where jobs are created and business investments are made.

Incentives. Most states provide incentives toencourage cleanup and redevelopment ofbrownfields. There are two general categories,liability relief (discussed in Chapter 8) andfinancial incentives (discussed in Chapter 6).Financial incentives may include:

• low-interest revolving loan programs; • loan guarantees; • tax credits; • grants;

• “bonus refunds” for each new job created;

• free site assessments; • grants to local governments for

investigation and cleanup; • reimbursement of cleanup costs; • reimbursement of municipalities’

costs associated with investment and cleanup; or

• tax increment financing.

Because each state develops its own program, it is important for anyone interestedin participating in a state voluntary cleanup or brownfield program to investigate the eligi-bility requirements, incentives for participationand other aspects of the programs in the particular state.

CLEANUP STANDARDS UNDER STATE VOLUNTARY AND BROWNFIELD PROGRAMS

The cleanup standards or guidelines astate uses for deciding how much cleanup isrequired at brownfield sites are a large factorin determining the cost and length of cleanups.Most states have now established so-called“risk levels” that describe the most serioustheat to human health and the environmentthat can be tolerated from any contaminatedsite. These risk levels can be expressed interms of the maximum concentrations of contaminants that are permissable on a site.Although there are many different ways toestablish these concentrations, two methodsare far more commonly used than any others.In the first, the state announces actual maxi-mum concentrations for specific contaminantsthat can be allowed in soil or groundwaterafter a cleanup. These numerical values —often called generic standards or statewidehealth standards or default standards — areapplicable to any site. In the second approach,the state allows the volunteer proposing thecleanup to develop contamination concentra-tions expressly for that site based on specificinformation about the contaminants present,the site’s geologic characteristics, the potential


use of the site, and other factors. The concen-trations derived from these site specific factorsare an alternative way to establish maximumallowable concentrations of contaminants thatmeet the risk levels set by the state. It isimportant to note that many states allow par-ties to choose either of these (or perhapsanother) method, or even to use a combina-tion of methods.

In recent years, most states have decidedto consider the future use of a site in settingcleanup standards. If a site will be used for an industrial or commercial facility — where children will not be exposed to contaminatedsoils, or groundwater will not be used fordrinking — the cleanup standard may be set atlevels that allow contaminated groundwater orsoils to be left in place. This is considered tobe acceptable because the planned land use of the site will reduce the risks that peoplewill be exposed to the contaminants. In suchcases, so-called institutional controls may beused to assure that the use remains the samein the future and to protect public health andthe environment if a future owner proposes tochange the use of the site.

Institutional controls are legal and administrative mechanisms that provide anadditional method of reducing the likelihoodof exposure by changing people’s behavior so they avoid being exposed. Institutionalcontrols include:

• warning signs;• legal notices;• land use controls and zoning;• restrictions on how property may

be used, often included in the deed to the property,

• restrictions on the use of groundwater for drinking;

• warnings to people not to eat fish caughtin particular lakes and streams; and

• education programs warning of particular risks.

Each of these works in a different way toconvince people to avoid exposing themselvesto the contamination. Many have successfultrack records in preventing harm, but none cantotally eliminate the possibility of exposure.

Almost all states use the same cleanupstandards for brownfield sites as for voluntarycleanup sites. A few states may offer differentstandards or cleanup approaches as additionalincentives for brownfield cleanups.

CLEANUP REMEDIES

In some cases, the cleanup remedy select-ed for a brownfield property will remove thecontamination that is presenting a risk tohuman health and the environment. In manycases, however, the cleanup may leave somecontamination on the site. In these cases, theremedy selected for the site may attempt toprevent exposure to residual contaminationthat exceeds allowable risk levels. Onemethod of preventing exposure is to containthe contamination. This is usually donethrough some form of engineered control suchas placing a cap over contaminated soils thatisolates the hazardous materials and preventsexposure. The most common containmentmethods are caps constructed out of asphalt,concrete, clay, or clean soils and de facto capswhere contamination under a structure is leftin place relying on the structure to function as a cap. There is always a possibility that thecontainment system will fail at some point,either due to wear or to deliberate action, andre-expose the contamination. Engineeringcontrols are, therefore, usually linked withinstitutional controls.

CLEANUP AND REUSE DECISIONS

Property owners in many states can nowconsider the intended uses of their brownfieldsites in determining appropriate cleanup. Inthe real world, of course, there is an almostinfinite range of potential uses, ranging fromresidential use at one end of the spectrum to very heavy industrial use at the other. In practice, however, cleanup programs with use-based flexibility will usually offer only twocleanup choices: a cleanup which allows foressentially unrestricted use — commonlycalled the residential standard; and a cleanupwhich allows for any use other than residential

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(or similar uses such as hospitals, senior carefacilities, day care, and the like) — usuallycalled the nonresidential standard. Thus,commercial activities, retail activities, and various manufacturing activities would all bepermissible at sites cleaned up to satisfy thesame nonresidential standard.

Assuming that the assessment shows soil,groundwater, or other contamination on yoursite, you must decide how thorough a cleanupyou wish to implement. Generally, althoughnot always, more thorough cleanups will bemore expensive initially and take more time toimplement than cleanup plans with more limit-ed goals. More thorough cleanups will alsogenerally allow the property to be used for awider variety of purposes.

While it is, as always, difficult to general-ize about the numerous cleanup options that a brownfield owner might choose from, most situations will fall into one of four basic categories:

(1) Remove or treat to allow residentialuse. The owner can choose to treat or removecontamination on the site until the levels meetthe applicable standards which would allowthe property to be used for residential purpos-es. This will be the most protective standardset by the government, and the cleanup willusually require the highest immediate costsand take the longest to implement. In return,the owner will now be able to offer the property for use without limitations based onany environmental contamination or healththreat posed by conditions on the site. Theproperty will be able to be safely used in thefuture for purposes that present the greatestrisk from exposure to contamination — residential use — as well as in any other waythe owner desires. Anyone interested in buy-ing the site and using it in the short term foruses other than residential — retail or lightindustrial, for example — may now be moreinterested in acquiring the property becausethey know that they can also sell it in thefuture for residential use if they wish (assum-ing, of course, that they do not introduce newcontamination to the site).

This cleanup choice, despite its obvious

advantages, may not be appropriate for everybrownfield site. Cleaning to a level that allows residential use may be so expensivethat it makes sale or redevelopment of the siteunprofitable, and therefore not feasible. Even if the cleanup costs can ultimately be justifiedby the enhanced value of the property, theowner may not be able, or want, to absorbthese costs in anticipation of a sale. Further,the property may not be suitable for residentialuse. Zoning may prohibit it, or the characterof the site and surrounding uses may makeresidential use highly inappropriate for theforeseeable future.

(2) Contain contamination to allow residential use. If residential use is appropri-ate and desirable, the brownfield owner mightconsider addressing contamination not bytreating or removing it but by establishing barriers between the contamination and futureresidents who may live there. (This will onlybe possible in those states that allow barriercleanups at sites to be used for residential purposes.) This approach might involve multi-unit housing where areas of contaminat-ed soil are covered with concrete or macadamparking areas, or are covered by buildingfoundations. Where contaminated groundwater is involved, the owner might be able to meet residential standards by substituting aclean public water supply for unhealthy wellwater. Use of these institutional and engineer-ing controls will frequently cost less than permanently dealing with the contaminationproblem by treatment or removal and may be sufficiently effective to allow residentialdevelopment.

These kinds of cleanups allow the brownfield property to be used for unlimitedpurposes, but not in unlimited ways. Forexample, residential use is allowed, but singlefamily homes with yards and gardens are not.Residential consumption of water is acceptable,but provision of that water by private wellmight not be permitted. These restrictionsmay also limit later resale of the site, sincenew purchasers must either respect these limitations or conduct additional cleanup at thetime they acquire the site. Finally, it may be


very difficult to predict the market demand forproperty offered for residential use which issafe only so long as various barriers or otherdevices remain intact.

These limitations, of course, are basedupon protecting people on the brownfieldfrom remaining contamination when the site isused for residential purposes. Depending onthe actual levels, future users may be able todisregard certain controls required in the initialcleanup if they convert the site to industrialuse or to other uses that do not involve resi-dential activities on the site.

(3) Remove or treat to allow nonresidentialuse. The brownfield owner confronted withcontamination which requires some remedialresponse may decide residential use is not fea-sible under any cleanup scenario. This con-clusion may be based upon the costs of anycleanup that allows for that use, it may bedriven by zoning or similar practical use con-siderations, or it may simply reflect the currentowner’s evaluation that the most profitable useof the site is for some commercial purpose. In this situation, the owner can choose to carryout a cleanup that does treat or remove exist-ing contamination, but only to those levelswhich are deemed acceptable under the law to allow nonresidential uses.

This cleanup approach results in a condi-tional kind of complete and permanent reme-dy. Once the cleanup is completed, theproperty will not present threats to humanhealth or the environment for nonresidentialuses. The legality and safety of these uses willnot be dependent upon maintaining any con-trols or barriers, such as parking lots or build-ing foundations. The actual levels of contami-nants in the soil will have been reduced to apoint that they do not present a risk to work-ers or persons coming to the site for a limitedperiod of time. Contaminated ground watermay continue to present a problem, however,and a safe supply of water may need to beprovided for any people drinking it.

Cleanup by treatment or removal to non-residential use contamination levels means thata business use on the site will not have itsprofitability affected by future costs associated

with maintaining or replacing barriers.Perhaps more importantly, the site will be suit-able — at least from a cleanup standpoint —for any kind of nonresidential use since noareas of the site will be barred from construc-tion or other redevelopment activities based ona need to avoid disturbing a barrier or capover contamination. Lastly, this freedom alsomeans that a party considering buying the sitenow does not need to worry as much aboutthe effect of the environmental conditions on asubsequent resale of the site. So long asfuture buyers do not want to convert the siteto residential use, they will face no limitationson the ways in which they might use the site.This should allow the site to retain its valuethrough subsequent transactions.

(4) Contain contamination to allow nonresi-dential use. The contamination at somebrownfields will be so extensive that theowner cannot afford, or the site’s value willnot even support, treatment and removal toreach nonresidential levels. The least expen-sive cleanup, generally, will involve simply utilizing barriers or other measures which iso-late or contain the contamination and allowthe property to be used for nonresidential purposes. As with other remedies which rely on institutional and engineered controls, however, this approach will limit how thebrownfield can be used for commercial activi-ties. The parking area might need to be in a specific location, as might an entrance road.Building footers and foundations might needto be placed only in certain locations, or mightrequire unconventional construction methods.

A prudent brownfield owner will haveidentified the most likely redevelopmentoptions for the site before committing to acleanup approach. Ideally, a specific buyer ortenant will have been identified, and the rede-velopment requirements and plans can beexamined. In this situation, the cleanup can beshaped to meet the expectations and needs ofthe new owner. In the same way, redevelop-ment plans can often be adjusted to meet cost-effective cleanup planning. A building orparking area, for instance, can be located onthe site in such a way as to be a component of

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a barrier or other control. Direct discussionwith an interested buyer also allows the currentbrownfield owner to learn the valuation thebuyer places on the different use limitationsassociated with different cleanup strategies.

Even where a specific end-use is notknown, the brownfield owner will want toconsider likely end-uses before settling on acleanup strategy. This will sometimes be an

obvious decision, as when designing thecleanup of a property currently zoned residen-tial, or dealing with a former industrial site in a manufacturing district zoned for only suchuses. Other times, however, the choices willbe less clear. When the optimal redevelop-ment outcome is not clear, and the remedia-tion strategy is not exclusively guided by costconsiderations, the brownfield owner will needto continue to work with knowledgeable local

Questions Frequently Asked About Cleanup

How Clean is Clean — Must a Brownfield SiteBe Cleaned Up to Pristine Conditions?

The extent of cleanup will vary considerablydepending on the type, amount, and area ofcontamination, and the cleanup standards usedby the specific regulatory program that governsthe cleanup. In addition, a key factor in deter-mining the level of cleanup is whether the use ofthe property is taken into account in settingcleanup standards. For example, if a property isslated for industrial use, the cleanup standardsare likely to be less stringent than if the propertywere to be used for residential purposes,because the level of exposure to the contami-nants will be less.

How Much Will the Cleanup Cost?The cost of the cleanup will vary consider-

ably depending on many factors. The level,type, amount, and extent of contamination arekey determinants. For example, if the ground-water under the site is contaminated, the cost ofcleanup is likely to be much higher than if justthe soil is contaminated. If the contaminatedmaterials need to be transported off site fortreatment that will also affect the cost. The costwill also depend on the standards that apply tothe cleanup, particularly whether the use of theproperty is considered in setting cleanup levels.If a brownfield property is cleaned up to com-mercial use standards, for example, rather thanresidential use standards, the cleanup will typi-cally be less expensive.

The cost to the property owner of thecleanup will also be affected by whether thereare other parties responsible for the contami-nation who can contribute to the costs. For

example, if a property was used as a landfillbefore the property owner acquired it, the prop-erty owner may be able to seek contribution for the cost of the cleanup from parties who con-tributed to the earlier contamination. Propertyowners should consult with a lawyer to deter-mine if they have a claim against a previousowner or party responsible for contamination oftheir brownfield site.

How Long Will the Cleanup Take?The length of the cleanup will vary accord-

ing to the level, type, amount and extent of thecontamination, as well as the cleanup standardsthat apply to the site. A site with extensive soiland groundwater contamination that is cleanedup to residential standards is likely to takelonger to clean up than a site that has only mini-mal contamination and will be used for industrialpurposes. Furthermore, factors such as the timeof year or unusually bad weather can affect theduration of cleanup. In most cases, technicalconsultants will be hired to perform the cleanup.The pace of the cleanup will also be contingentin part on the consultants’ schedules and levelsof efficiency. In addition, the time period forreview and oversight by the regulatory agencyoverseeing the cleanup activities will influencehow long the cleanup takes to complete.Several states have instituted efforts to stream-line the review process for voluntary cleanups,and have set the number of days for review ofvarious documents, but other state agencies thathave large workloads and are understaffed maytake a considerable amount of time to approvecleanup plans and completions.


sources to identify the cleanup strategy mostlikely to be cost-effective.

It is important to remember, however, thateven if a brownfield program allows the devel-opment of cleanup standards based on site-specific information, this does not ensure thatthe use of this option will be appropriate, orauthorized, in every situation. Most programsthat allow cleanups based on site use requirethat the cleanup be compatible with currentand reasonably foreseeable future site use.This means, in short, that the owner of a sitein the midst of a residential section may not beable to clean up to nonresidential standardssimply by announcing that the property willnow be offered for sale for business uses.

CLEANUP PROCEDURES

Cleanup procedures will vary from state to state so it is important to check the proce-dures under the program that governs thecleanup. Some states actively oversee eachstage of the cleanup while others allow prop-erty owners and other volunteers a consider-able degree of autonomy. In some states,such as Ohio and West Virginia, the stateallows certified environmental professionals tooversee the cleanups. Furthermore, somestates, such as Pennsylvania, have more thanone set of procedures depending on the typeof cleanup standards that will be used.

Several states, such as Arizona, have triedto streamline their oversight processes byestablishing time limits for government actions.For example, the state may be required to acton applications or review cleanup work planswithin a specific number of days.

By way of example, the following proce-dures provide an outline of the kind ofprocess that a state brownfield or voluntarycleanup program may use. These sample pro-cedures are a combination of various state pro-gram procedures and do not describe anyparticular program’s approach:

(1) File Application and Fee: Many volun-tary cleanup programs require volunteers tosubmit applications or provide notice of anintent to perform a voluntary cleanup. The

type and amount of information about the siteand owner that is required as part of the appli-cation varies from state to state. For example,some states require that the property ownerperform some site assessment work beforeapplying to the program. In addition, moststates require participants to reimburse themfor voluntary cleanup oversight costs, either inthe form of a flat fee or on the basis of actualcosts, or a combination of both. In 1997, forexample, the flat fees ranged from $250 to$2,000. States that seek reimbursement forcosts typically charge a set hourly rate. Statesmay also have eligibility criteria for participat-ing in their programs. The application processallows the state to determine if the propertyowner and the site are eligible to participate inthe voluntary cleanup or brownfield program.

Note that in some states, after notifyingthe state that they intend to perform a volun-tary cleanup, property owners negotiate andenter into an agreement with the state for theperformance of the cleanup. Cleanup agree-ments vary considerably but can address arange of issues such as the process for reviewof work plans or the specific work the proper-ty owner will perform.

(2) Site Investigation Review: Some statesmay require property owners to submit plansfor site investigations and to report on investi-gations. Because the site assessment will serveas the basis for developing the cleanup workplan, the state may want to ensure that theinvestigation plan is likely to identify contami-nants and that the investigation report is sufficiently thorough. Chapter 4 discusses con-siderations that property owners should takeinto account in conducting site assessments.

(3) Cleanup Plan Review: On the basis of thesite investigation, the property owner developsa proposed cleanup remedy and work plan forthe state to review. Considerations in selectinga cleanup approach are discussed earlier inthis chapter. Most property owners will needto work with a technical consulting firm todevelop a cleanup plan. Tips for retaining andworking with consultants are discussed later inthis chapter and in Chapter 4. Once the plan

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has been submitted, the state may approve orrequire modifications to the plan.

(4) Public Notice and Comment: Manystates have public participation requirementsfor their voluntary cleanup and brownfieldprograms. Although approaches vary, moststates require notice to the public of thecleanup and may designate the appropriatemethod for providing the notice such as amailing or an announcement in a newspaperor public library. In addition, many states givethe public opportunity to comment on pro-posed voluntary cleanups. Some states mayalso require a public hearing or meeting aboutthe cleanup so the public can ask questionsand make comments. If public commentsraise concerns about the proposed cleanup,the state will typically work with the propertyowner and interested public to resolve theconcerns. This may require amendments tothe work plan. Of course, the level and extentof public interest will vary considerablydepending on the property. As discussed inChapter 5, brownfield property owners shouldconsider gauging the likely level of communityinterest in their property early in the cleanupand redevelopment process in an effort toaddress concerns, if any, prior to any noticeand comment period or public meeting.

(5) Site Cleanup: After the work plan hasbeen approved and public comments, if any,addressed, the owner can begin the cleanup ofthe property. Again, most property ownerswill opt to work with a consulting firm toimplement the cleanup since few propertyowners will have the technical expertise andskills to perform the cleanup.

(6) State Review and Approval: After com-pletion of the cleanup, the state reviews thecleanup documentation, such as sampling data, submitted by the property owner. If thestate has concerns or questions, it typically will notify the property owner and work toresolve the problems. After the cleanup hasbeen completed satisfactorily, the state mayissue a certificate of completion or no-further-action letter. (See Chapter 8 for a discussion ofthe liability relief states may provide).

(7) Voluntary Withdrawal: Property ownersshould determine prior to applying to the program whether they can voluntarily withdrawfrom the program at any time, for example, if work plan modifications recommended bythe state would make the cleanup too costly.States that address the issue may require, for instance, that a site not pose a greaterthreat to health and the environment thanwhen the property owner entered into the voluntary program.

CLEANING UP BROWNFIELD PROPERTIES INDEPENDENT OF REGULATORY OVERSIGHT

In some cases it may be appropriate for aproperty owner to clean up a brownfield siteindependently, without regulatory oversight.Property owners should discuss the appropri-ateness of an independent cleanup with atechnical consultant and lawyer, because insome cases it may not be legal or advisable toforego regulatory oversight. The key advan-tage of independent cleanups is that they arelikely to take less time to complete becausestate approval is not required. They may alsocost less as a result. In addition, the propertyowner may have greater ability to determinethe cleanup approach.

Some brownfield cleanups present nooptions; they require regulatory oversight. For example, if a property is already subject to cleanup under a federal or state Superfund,RCRA Corrective Action, or UndergroundStorage Tank Program, the site cleanup mustbe performed under the procedures set out inthose cleanup programs. In addition, severalstates require that spills of certain substancesmust be cleaned up under government super-vision. Furthermore, some brownfield cleanupsmay trigger regulations on the handling, stor-ing, and transportation of hazardous waste orother regulations such as Occupational Healthand Safety Administration rules on workersafety. Failure to comply with these and otherregulations could result in injury to health and environment or lead to an enforcement


action that imposes penalties on the propertyowner. Property owners should consult withan attorney to determine what laws and regu-lations may apply to the remediation of theirproperties.

In contrast, some brownfield cleanups maynot trigger regulatory requirements or requireproperty owners to notify government regula-tors. Owners of such sites may elect to cleanup their brownfields independent of a statevoluntary brownfield program, or other programthat provides regulatory oversight. Propertyowners should recognize, however, the disad-vantages of this approach.

The most notable disadvantage is that theproperty owner cannot obtain protection fromliability for contamination that remains on thesite after the cleanup. The government canstill take enforcement actions if the site posesa threat to health and the environment. Thelikelihood of this occurring depends on severalfactors, including the extent of contaminationremaining on site and the quality of thecleanup performed. Given that property owners will need to determine the level ofcleanup, it may be appropriate to considerusing state voluntary and brownfield programcleanup standards as a guideline, because sub-sequent enforcement action by the governmentmay be less likely if the standards are met.

Property owners should also recognizethat independent cleanups are unlikely toqualify for other brownfield incentives such aslow-interest loans. It may also be difficult toget financing for the redevelopment from alending institution if the cleanup is not super-vised by a regulatory agency, because thelender may be concerned about future liabilityfor the contamination remaining on the site.

CONSULTANTS AND CLEANUPS

Retaining an experienced and competentconsultant or contractor is, if anything, evenmore significant for the cleanup phase of aproject than for the assessment phase. It isduring the cleanup that contaminated soil andground water is removed and treated or takento a disposal site, or managed in any of a

number of other ways. These acts, in them-selves, can create risks of greater contamina-tion if not carried out properly. In addition,many of the cleanup activities will be subjectto direct regulatory requirements, and the fail-ure to comply with those requirements canexpose both the contractor and the propertyowner to potential liability.

Most of the suggestions made in Chapter 4of this guidebook for selecting and managingan assessment consultant apply equally to theselection of a cleanup contractor. The criticalfactors in ensuring a positive relationship with a professional consultant — whether foran assessment project or a cleanup — are aclear description of the tasks to be carried out,a specific statement of the costs for thosetasks, a mutually acceptable structure to reportprogress and results, and clear communicationsin both directions during the project.

Many environmental firms today can conduct both assessment and cleanup projects.Some firms prefer to undertake only assess-ment work or cleanup jobs. Most firms thatcarry out cleanups will use subcontractors forvarious specialized tasks, such as handlingespecially difficult materials (for example,asbestos) or for building demolition and otherheavier activities.

A brownfield owner should know whetherconsultants proposing to handle the assess-ment phase are capable of also carrying out acleanup if necessary. The owner may developa sense of confidence in a firm during theassessment and want to simply expand thescope of activities to include the cleanup project. At a minimum, the firm responsiblefor the assessment may gain a special sense ofthe cleanup requirements and may be able tooffer a better proposal for the cleanup if theowner goes through a separate competitiveprocess for the cleanup stage.

There may also be reasons to select a firmthat only does assessments for the investigativephase. More specialized firms sometimesbring a higher degree of sophistication andexpertise because they focus all their efforts onassessment projects only. This is likely to beof value if the brownfield in question presents

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especially difficult soil or geology problems, orif the particular contaminants present unusualquestions. Assessment-only firms may besmaller, as well, and this can sometimes resultin lower overhead and a correspondinglylower cost structure.

A good strategy for an owner beginningthe process of searching for a consultant is torequest proposals from at least some firms thatonly will be able to carry out the assessmentphase as well as some full-service firms. Thiswill offer a broad basis for comparison.

45

LIABILITY RELIEF UNDER STATE BROWNFIELD OR VOLUNTARY CLEANUP PROGRAMS

Liability relief can be a major incentive to participate in voluntary and brownfieldcleanup and redevelopment programs. Moststates give the same protection from liabilityfor voluntary and brownfield cleanups,whether they are part of the same or separateprograms. Each state has its own method for giving volunteers protection from future liability, so a volunteer must contact the stateagency or a lawyer with experience with theparticular state’s program. The following aresome of the commonly used methods:

Covenant not to sue: A covenant not to sueis an enforceable agreement by the state agencynot to sue the volunteer for further cleanup.Usually the covenant protects the volunteerfrom state claims related to contaminationaddressed by the cleanup. Several states,including Georgia, Maine, Pennsylvania, RhodeIsland, and South Carolina, also protect volun-teers from suits by other people who paid forcleanup at the site and are seeking contribu-tion for the costs they incurred. A few statesprovide a covenant that “runs with the land”and, therefore, applies to future owners of the property.

No-further-action letter: In a no-further-action letter the state assures the volunteerthat, based on currently known facts, the statewill not require the volunteer to do furthercleanup. Many states specifically provide intheir no-further-action letters that the volunteeris relieved from liability for further cleanup.Some states, however, do not provide liability

relief in their no-further-action letters, althoughthey may do so in a separate document, suchas a settlement agreement that includes acovenant not to sue.

Certificates of completion or cleanupapproval letters: Some states use certificatesof completion and cleanup approval lettersthat relieve the volunteer of liability for futurecleanup. But, like some states’ no-further-action letters, the certificates and approval let-ters from some states do not include a liabilityrelease. These states simply certify that thevolunteer has completed the cleanup and that,based on existing information, the state plansto take no further action at the site. Thesecertificates or approvals are intended to assurelenders and prospective purchasers that addi-tional cleanup will not be required. Minnesotahas several levels of certificates of completion,increasing the degree of protection from liabili-ty depending on the level of state reviewrequested by the volunteer.

Some states will only provide liability protection to parties that are not responsiblefor the contamination. For example,Delaware, Maryland, New Mexico, RhodeIsland, and Utah will not protect responsibleparties from liability.

Most states that provide liability releasesreserve the right to require further cleanup ofa site under specific conditions, such as:

• if additional contamination is found that was unknown at the time of the cleanup;

• if a containment system fails and peopleor the environment may be exposed to contamination that was left in place;

Obtaining Liability Protection Chapter 8


• if needed institutional controls fail or are not implemented;

• if approval of the cleanup was obtainedthrough fraud;

• if the land use changes to a use that might be incompatible with the level of remaining contamination or the containment system; or

• in some states, if new technology becomes available.

These are called reopeners because they arecircumstances when the government willreopen the file on the site to determine if fur-ther cleanup is needed. Of course, if newcontamination occurs after the cleanup is fin-ished, the state may require further cleanup.

LIABILITY RELIEF UNDER FEDERAL PROGRAMS

Even if a state environmental agencyreviews and approves the cleanup plan andcertifies that cleanup was completed, the pos-sibility of federal liability for further cleanupwill remain. Some states and EPA havereached agreements that EPA will not requirefurther cleanup at sites cleaned up under state

supervision, unless there is an imminent andsubstantial danger to public health or the envi-ronment. These states include: Colorado,Delaware, Illinois, Indiana, Maryland,Michigan, Minnesota, Montana, Oklahoma,Rhode Island, Texas, and Wisconsin. EPA isworking with additional states and additionalagreements are expected in the future. EPArarely requires further cleanup after a state hasapproved a cleanup, but the possibility that itmight can cause worries for some owners,prospective buyers, and developers.

The federal government is unwilling togive across-the-board liability relief to everyperson who cleans a site up under a state voluntary, brownfield, or regulatory program.When EPA does not have an agreement with astate, it has been willing to provide comfort orstatus letters that give some assurance that EPAwill not require further cleanup of a site that isremediated under a state program. EPA alsotries to reduce these concerns throughProspective Purchaser Agreements, in which itspells out the limited situations where aprospective buyer would be liable. But theseagreements have so far been available only tobuyers of sites cleaned up under the federalSuperfund program, not to buyers of sitescleaned up under state programs.

47

Some owners may want to sell their properties, rather than redevelop them orreuse them for their own businesses. As dis-cussed in Chapter 3, these owners have severalbasic options:

• sell the property “as is”; • sell the property after an assessment has

been performed; or• sell the property after assessment

and cleanup.

As Chapter 3 explains, there are also variations on these basic options. The sale ofany property involves negotiation over andresolution of numerous issues. This chapterdoes not address all of these issues but insteadfocuses on the issues that are particularly challenging in brownfield transactions — waysthat owners and prospective buyers can allocate responsibilities for future costs relatedto present contamination.

Brownfield property transactions can becomplicated and involve technical and legalissues that a lay person may not be qualifiedto address. This guidebook introduces proper-ty owners to common issues that are likely toarise in the course of negotiating agreementswith prospective buyers, but it is not intendedas a comprehensive resource and should notserve as a substitute for legal counsel.

The owner and potential buyer shouldstart by identifying potential costs associatedwith the contamination on the property thatthey want to address in the sale. These mayinclude liability for:

• cleanup;• damages caused to natural resources

such as wetlands and streams;

• personal injury or property damage caused to third parties; and

• violations of environmental laws arising out of the use of the property.

The following mechanisms are commonlyused to allocate responsibility for these kindsof liabilities. These mechanisms only serve toallocate responsibility among property ownersand prospective buyers; they do not protectagainst direct liability to the government forremediation costs or enforcement actions.

REPRESENTATIONS AND WARRANTIES

In the course of the sales transaction, theproperty owner may be expected to providethe prospective buyer with representations and warranties. In the context of a brownfieldtransaction, representations and warranties by the property owner are statements andassurances to the prospective buyer about thecondition of the property. Representations and warranties in a brownfield transactionoften focus on current and past operations and conditions on the property that could leadto environmental liabilities. Representationsand warranties vary considerably dependingon the particular transaction but may address,for example:

• the enforcement history of the property;• the presence or absence of hazardous

substances or underground storage tanks;• liens and land use restrictions on the

property due to environmental contamination;

• claims or threatened claims of personal injury and property damage; and

• the need for environmental remediation.

Selling Brownfield Properties Chapter 9


In addition, the seller may request a representation that the property owner hasprovided copies of all available environmentalassessments and reports to the prospectivebuyer. The property owner and prospectivebuyer may decide to use a schedule of excep-tions to list any exclusions or exceptions from the representations that are made by theproperty owner.

If the buyer later determines that a repre-sentation was inaccurate, the buyer may havea claim for breach of representation. If thebreach is discovered prior to closing of sale,the buyer may be allowed to terminate theagreement. A breach of representations andwarranties also may be used as a trigger forindemnifications, as discussed below. Thus,the property owner must take care to fulfill itsobligations to ensure that the representationsand warranties are truthful and accurate.

During the course of negotiating the repre-sentations and warranties, property ownersand prospective buyers are likely to want tolimit their respective risks and liabilities to thegreatest extent possible. For example, in somecases, property owners and prospective buyersmay negotiate over whether the representa-tions and warranties should be limited to onlythose conditions that are known to the proper-ty owner. Property owners should consultwith legal counsel regarding: 1) the specificlanguage in the agreement limiting the repre-sentations and warranties to the best knowl-edge of the property owner; and 2) what isrequired of the property owner in making adue inquiry about the matters addressed in therepresentations and warranties. Additionalissues property owners and prospective buyersmay want to negotiate include whether therepresentations and warranties cover businessoperations prior to the property owner’s use of the property.

Property owners and prospective buyersmay also negotiate over whether to use an “asis” clause as a substitute for representationsand warranties. If a buyer acquires a brown-field property “as is” then the buyer may havelimited ability to obtain damages from theproperty owner for conditions on the property

at the time of the sale. Property ownersshould consult with legal counsel about “as is”clauses, particularly because such clauses donot always provide full protection from liabilityfor environmental contamination. For example,an “as is” clause may not protect against liabili-ty under Superfund.

Many courts have interpreted representa-tions and warranties. Any efforts to draft and negotiate effective representations andwarranties should take into account these priorjudicial interpretations.

Finally, the sales agreement should indicate how long the representations and warranties survive after the closing of thetransaction. The buyer may want to extendthe representations and warranties for as longas possible, while the property owner mayprefer to limit the time period that the buyercan make claims for breaches of the represen-tations and warranties.

INDEMNIFICATIONS

Indemnifications are another way thatproperty owners and prospective buyers canattempt to allocate the risks and liabilities asso-ciated with environmental contamination onbrownfield properties. In brownfield transac-tions, the indemnifications will often focus onthe costs of the cleanup of the property. Anindemnification is an agreement that providesfor one party to bear the costs, either directlyor by reimbursement, for damages or lossesincurred by a second party. An example of an indemnification in a brownfield agreementwould be for the seller to indemnify theprospective buyer against all environmental liabilities incurred as a result of the propertyowner’s operations before the closing of thetransaction. Similarly, the prospective buyercould indemnify the property owner for allenvironmental liabilities incurred as a result ofthe buyer’s operations on the property afterthe closing of the deal.

It is important to note that indemnifica-tions do not serve to protect a party fromdirect liability to the government for remedia-tion costs or environmental enforcement

49CHAPTER 9

actions. However, if the government forcesthe indemnified party to perform or pay for acleanup of the property, the indemnificationmay, for example, allow that party to turn tothe indemnifier for reimbursements.

In addition to stand-alone indemnifica-tions, indemnifications can also be linked torepresentations and warranties. Specifically,the agreement can provide that the propertyowner must indemnify the buyer for expensesarising out of the breach of the representationsand warranties. An indemnification provisionof this type provides another type of claim, inaddition to a claim for breach of representation,that the buyer can use in the event that a representation is breached.

As with all provisions in a sales agree-ment, the exact wording of an indemnificationis critical not only for purposes of clarifyingthe intent of the prospective buyer and proper-ty owner but also in case a court is asked toresolve a dispute over an indemnificationclaim. For example, it is not always easy todetermine whether environmental contamina-tion came from operations on the propertyprior to or after the closing, particularly if thebuyer uses the same hazardous substances inits manufacturing operations as a previousowner of the property. Buyers and sellers canuse a variety of approaches to try to clarify thescope of indemnification coverage regardingthis question, including the use of an assess-ment report to establish environmental condi-tions on the site at the time of sale. Theseapproaches have strengths and weaknesses.Legal counsel can explain them and can alsohelp the property owner draft indemnificationsthat are likely to be upheld and given theirintended meaning.

Many issues arise when using an indemni-fication. These issues can not be fullyaddressed in this guidebook but may include:

• the specific types of costs that will be covered;

• caps on the amount of the indemnification;

• deductibles whereby only amounts above the deductible can be claimed;

• time limits for the indemnification;• mediation of disputes over indemnifica-

tion provisions; and• notice requirements.

In addition, the parties can negotiate costsharing provisions that require both the propertyowner and prospective buyer to pay for cleanupcosts, thereby giving both parties an incentiveto perform cost-effective work. The appropri-ate resolution of these issues in any specifictransaction can be a complicated endeavor andshould be carefully thought through.

A final but important note on indemnifica-tions — property owners and prospective buy-ers should remember that an indemnification isonly valuable if the party obligated to indemni-fy has or is likely to have the financial resourcesto make good on the indemnification. Severalapproaches can increase the likelihood that theindemnification will be backed up. For exam-ple, the parties can set up an escrow accountto pay for indemnified costs.

ASSESSMENT AND REMEDIAL WORK AS A CONDITION OF SALE

A property owner may agree to performcertain assessment or cleanup work as a condi-tion of the sale. An agreement can provide fora variety of approaches to pre-closing cleanupwork, depending on what the property owneris willing to do to secure the sale. For exam-ple, a property owner could agree to obtainapproval from the state voluntary or brown-field program of a work plan for the cleanupof the property. A property owner could gofurther and agree to perform the cleanup andobtain a certificate of completion or no-further-action letter, as described in Chapter 8.

Some of the general considerations for aproperty owner who is considering performingassessment or cleanup work prior to selling abrownfield site are discussed in Chapter 3.Additional considerations may apply if theassessment and cleanup work are performedas a condition of sale. For example, the prop-erty owner may want assurances that theprospective buyer will, in fact, complete the


transaction after the cleanup is completed bythe property owner. Legal counsel can recom-mend specific approaches to setting up anescrow account or similar mechanism.

COVENANTS

Either a property owner or prospectivebuyer may covenant or agree to perform cer-tain activities or refrain from performing certainactivities as part of the sales agreement. Unlikea pre-closing condition, a covenant can beperformed after the sale of the property. Forexample, if the property owner does not planto clean up the site fully prior to the sale, theowner could agree to remove drums from for-mer operations on the site, in an effort toreduce the costs of the cleanup to the prospec-tive buyer. The prospective buyer could agree or covenant to perform the full cleanupunder a voluntary or brownfield cleanup program after the sale of the property, in aneffort to help assure the property owner thatcleanup will be performed well and will notresult in liability for the property owner at alater date. Covenants can cover a wide rangeof environmental issues and problems. Likeother mechanisms used to address risks andliabilities associated with contamination onbrownfield sites, covenants must be negotiatedon a case-by-case basis and drafted carefully toensure that they are enforceable and achievethe goals of the parties.

INSURANCE

Another way that property owners andprospective buyers can allocate risks is throughthe use of insurance products. (Insuranceproducts are discussed in Chapter 3.) For pur-poses of selling a brownfield property, a prop-erty owner and prospective purchaser couldexplore the possibility of using insurance toreduce or address unexpected cleanup costs.For example, insurance products may be avail-able that would cap the cost of a proposedcleanup or that would insure against unknowncleanup costs or liabilities.

PROPERTY TRANSFER LAWS

In addition to the disclosures and cleanup obligations that the property ownerand prospective buyer may negotiate as part of a sales agreement, some state laws imposeduties on owners of contaminated propertywhen they transfer their properties. Somestates (approximately 20) require owners ofcontaminated properties to disclose the pres-ence of hazardous substances to purchasers.Some states (approximately 20) require proper-ty owners to record notices on the deeds ofspecific kinds of contaminated properties. A few states, such as New Jersey, Connecticut,and Hawaii, require a cleanup or commitmentto clean up when particular contaminatedproperties are transferred. The requirementsand applicability of the laws vary from state to state. Property owners should take care tocomply with any state property transfer laws,as well as any additional cleanup, investigationor disclosure requirements negotiated in thesales agreement.

51

“As is” Sale: The transfer of a property to abuyer with no promises, assurances, or repre-sentations by the property owner about theconditions of the property.

Boilerplate: Standard language that businessesroutinely include in contracts. The other partyto the agreement can sometimes negotiate tochange or remove such provisions.

Brownfield: An industrial or commercial property that remains abandoned or underuti-lized in part because of environmental contam-ination or the fear of such contamination.Government definitions of the term may varydepending on the program.

Community Development Block Grant(CDBG): A lump-sum grant to a state or localgovernment from the federal Department ofHousing and Urban Development that may beused for development activities including, insome cases, brownfield revitalization.

Community Development Corporations(CDCs): Local non-profit organizations createdto promote urban redevelopment.

The Comprehensive EnvironmentalResponse, Compensation, and Liability Act(CERCLA or Superfund): A federal statute thatgoverns the investigation and cleanup of sitescontaminated with hazardous substances. Thelaw establishes a trust fund that can be usedby the government to clean up sites on theNational Priorities List.

Certificate of Completion: A written verifica-tion from a state voluntary cleanup or brown-field program that a site has been cleaned upin a manner satisfactory to the state. In somestates, a certificate provides liability protectionbut in most states liability relief must beobtained through a another mechanism suchas a covenant not to sue.

Cleanup Approval Letter: A written verifica-tion from a state voluntary cleanup or brown-field program that a site has been cleaned upin a manner satisfactory to the state.

Contribution Action: A legal proceedingbrought by a party that has incurred cleanupcosts against other liable parties for their shareof the costs incurred.

Corrective Action: The cleanup process usedto address contamination at treatment, storage,and disposal facilities regulated under theResource Conservation and Recovery Act.

Covenant Not to Sue: A written promise by astate government that it will not take legalaction or require additional cleanup by a partythat satisfactorily cleans up a property under astate brownfield or voluntary cleanup program.

Deed Restriction: A limitation on the use of aproperty that is recorded on the deed to theproperty to provide notice of the restriction.

Easement: A right to use or limit the use ofsomeone else’s property.

Brownfields Glossary


Engineering Controls: Physical mechanismsfor preventing exposure to contamination.Examples include: fences, pavement, and claycaps placed on contaminated soil.

Environmental Assessment: A site evaluationor investigation conducted for purposes ofdetermining the extent, if any, of contamina-tion on a property. An assessment can beinformal or formal, and can consist of severalstages. For example, a Phase I assessment, orbasic study of possible contamination at a site,is limited to collecting information about pastand present site use and inspecting presentconditions. A Phase II assessment can followup a Phase I assessment with sampling andanalysis of suspected contaminated areas of a site. A Phase III assessment can either follow up a Phase II assessment by gatheringinformation on the exact extent of the contam-ination or by preparing plans and alternativesfor site cleanup.

Greenfield: A property that has not been previously developed.

Indemnification: An agreement that providesfor one party to bear the costs, either directlyor by reimbursement, for damages or lossesincurred by a second party.

Infrastructure: The roads, utility lines, and other public amenities that support property use.

Institutional Controls: Legal and administra-tive mechanisms designed to prevent exposureto contamination. Examples include: deedrestrictions, easements, and zoning restrictions.

Liability Relief or Liability Release:Protection from liability for contamination pro-vided by a state government as an incentivefor brownfield cleanups. Releases vary inscope and form, and can include covenantsnot to sue and some types of no-further-actionletters and certificates of completion.

Natural Resource Damages: Monetary pay-ment for injuries caused to natural resourcessuch as streams, wildlife, and wetlands by con-tamination from a site. The government can insome cases compel the party responsible forthe injuries to pay damages.

No-Further-Action Letter: A written statementby a state government that it has no presentintention to take legal action or require addi-tional cleanup by a party that satisfactorilycleans up a property under a state brownfieldor voluntary cleanup program.

Nonresidential Use Standard: A cleanupstandard, usually expressed as a numericalratio of parts of a specific contaminant to parts of the medium of concern (e.g., 5 partsof lead per million parts of soil) that describesthe maximum concentration of the contami-nant in the medium that will not present anunacceptable risk to the health of humansengaging in any activity other than residentialor those other activities considered to be substantially similar to residential. The non-residential use standard is usually a less strictcleanup standard than the residential use standard, and a site that meets the non-residential standard is limited in its uses tononresidential activities.

National Priorities List (NPL): The Environ-mental Protection Agency’s list of the mostserious uncontrolled or abandoned hazardouswaste sites.

Prospective Purchaser Agreement:An agreement between EPA and the prospec-tive buyer of a Superfund site that protects theprospective buyer from certain liabilities forcontamination that is already on the site, usually in exchange for a payment of moneyand other commitments by the prospectivepurchaser.

53GLOSSARY

The Resource Conservation and RecoveryAct (RCRA): A federal statute that regulatesthe generation, transportation, storage, treat-ment and disposal of hazardous waste. RCRAprograms include the Corrective Action andUnderground Storage Tank Programs.

Residential Use Standard: A cleanup stan-dard, usually expressed as a numerical ratio ofparts of a specific contaminant to parts of themedium of concern (e.g., 5 parts of lead permillion parts of soil) that describes the maxi-mum concentration of the contaminant in themedium that will not present an unacceptablerisk to the health of humans residing on thesite, or engaging in activities on the site thatare considered to be substantially similar toresiding on the site. The residential use stan-dard is usually the strictest cleanup standard,and a site that meets this standard can usuallybe used for any purpose.

Reopener Provisions: Express exceptions toliability releases or agreements that reserve thegovernment’s right to require further cleanupunder certain conditions. These conditionstypically include fraud by parties responsiblefor the cleanup, discovery of previouslyunknown contamination, and discovery thatcontamination remaining on the site is signifi-cantly more toxic than originally believed.

Restrictive Covenant: A provision in a deed that limits the use of the property. Forexample, a restrictive covenant could prohibitcommercial uses.

Representations and Warranties: Statementsof fact (representations) and promises (war-ranties) that a seller makes to a buyer in a real estate transaction.

Risk Assessment: A study or evaluation thatidentifies and in many cases quantifies thepotential harm posed to health and the envi-ronment by contamination on a property.

Running With the Land: An obligation orright that attaches to a property and passes tothe new owner if the land is sold.

Tax Increment Financing (TIF): A mechanismthat allows local governments to use futureprojected taxes to finance current infrastructureinvestments.

Toxic Tort Action: A legal proceeding broughtto seek damages for personal injury or proper-ty damage incurred as a result of exposure toa hazardous substance.

Uncertainty Premium: The amount that thebuyer of a brownfield property subtracts ordiscounts from the purchase price to reflectthe risk of unexpected environmental assess-ment and cleanup costs.

Variance: An individual exception to a land-use restriction or other legal standard grantedbecause of special circumstances.

55

Brownfield owners face both opportunitiesand risks. An environmental assessment ofyour site could show it is basically clean orcould turn up costly hidden problems. Cleanupcould create a valuable property, or it couldleave a clean but still unused site in adepressed neighborhood. The owner muststudy the potential benefits and risks to decidewhether redevelopment could work. Whilethere is no set formula for determiningwhether it makes business sense to clean upand redevelop a brownfield property, the fol-lowing questions are ones owners typicallyconsider. The issues raised by these questionsare discussed throughout the guidebook.

First consider the costs and benefits ofleaving the property in its current condition:

• What is the value of the property as it stands now?

• What is the cost of carrying the property in its current condition?For example, what are the costs of insurance and state and local property taxes?

• Could the costs of cleanup increase if cleanup is put off?For example, will contamination spread or expose others to risk, thereby creating additional liability?

• Has any government agency expressed concern about the property? If the property is not cleanedup voluntarily, is it likely that a local, state, or federal environmental agency will require cleanup? (Governments generally require cleanup only when a

property poses serious risks to people or the environment.)

• Would the surrounding community prefer maintaining the status quo?For example, has the community expressed concerns about introducing commercial or industrial activities in a neighborhood that is becoming more residential?

Next, consider the cost and benefits ofcleanup and redevelopment:

• Would the property’s value be enhanced once it is cleaned up?

• What is the likely cost of cleaning up the property and are those funds currently available? Are there government programs that would support or subsidize cleanup?

• Is it possible to estimate the benefits of resolving environmental risks through cleanup? Could cleanup lead the government to grant releases from environmental liabilities?

• Are there intangible benefits of cleanup? Would cleanup increase community goodwill or resolve lenders’ or investors’ doubts about potential liabilities?

• Is there a market for the property after cleanup? Could the owner use it for his own business? Is there a market for new housing, retail, or industrial sites in the area? Would cleanup and redevelopment increase the property value?

Does Your BrownfieldPresent a Business Opportunity? Appendix A


• Will cleanup activity increase community concern about the property? Will it raise questions in neighbors’ minds about whether the contamination on the property has injured them?

• Do the benefits of cleanup appear tocover the costs? Are the figures likelyto change if cleanup is postponed?

• Does the owner have the capital, the skill, and the desire to undertakecleanup and redevelopment? If not,

is it possible to find others who might help? Is it possible to sell the property before it is cleaned up? After it is cleaned up but before it is redeveloped?

Some of these questions will be hard toanswer. Some will require the help of experts,such as attorneys, engineers, or governmentofficials. Even then, some will be unanswer-able. As in any business venture, a brownfieldproject will have uncertainties and risks. Thisguidebook may help owners understand manyof them.

57

1. The Federal Superfund Program

The federal Superfund law covers thecleanup of sites contaminated with hazardoussubstances or sites facing a substantial threat of contamination with hazardous substances.The basic scheme of the federal Superfundstatute is simple. The law authorizes EPA toclean up sites contaminated with hazardoussubstances and to prevent contamination by hazardous substances. The federal government also may require the partiesresponsible for the contamination to clean up the site. Or, the government may requirethe parties responsible for the contaminationto pay all the government’s costs of cleaningup the site. Superfund takes its name fromthis last mechanism, since the law creates a fund that the government may use to clean up sites, which is then replenished by payments from parties responsible for the contamination.

The Superfund law may be used to clean up almost any site contaminated withhazardous substances. But it is used at farfewer sites than it might potentially reach.This is because federal money may be usedonly to respond to emergencies and to pay for cleanups of the worst sites, which are listed on the National Priorities List (NPL). Inpractice the federal government puts most ofits time, effort and money into cleaning up the1200 or so sites listed on the NPL.

Cleanup Standards. The statute includesgeneral rules for deciding what cleanup stan-dards to apply to a particular site. These rules direct EPA to protect human health and

the environment and to prefer permanentcleanups, including permanent treatment orremoval of hazardous substances. The statutealso requires a cleanup to meet standards from other federal or state statutes that applyto the site or that would be “relevant andappropriate” to the site.

The statute also provides other rules toguide the choice of a cleanup plan. In decid-ing on a cleanup plan, EPA must consider anumber of factors prescribed in the law. EPAhas issued regulations, part of the NationalContingency Plan (NCP), that further explainhow it will consider these factors in decidinghow to clean up a specific site.

If the cleanup will leave contamination atthe site at levels above those that would allowunrestricted use of the site, then EPA mustreview the site every five years to assure that it continues to protect human health and theenvironment. In such cases EPA normally will use barriers or some other engineeringmethod of containing the contamination andinstitutional controls to control exposure to the contamination.

Liability. Congress made several categories ofparties liable for the costs of cleaning up sitescontaminated by hazardous substances:

• the current owner or operator of a contaminated site;

• anyone who owned or operated a site at the time of disposal of hazardous substances at the site;

• anyone who arranged for disposal or treatment, or who arranged for transportation for disposal or treatment,

Federal and StateCleanup Programs Appendix B


of hazardous substances owned by that person where those substances ended up at a contaminated site; and

• anyone who transported hazardous substances to a site selected by that party for the purpose of disposal or treatment.

Innocent landowners may be able to avoidliability if they can prove that they acquiredthe property after the contamination occurredand they did not know, and had no reason toknow, that contamination existed. In practice,it is often difficult to establish this defense.

EPA has recently issued policies attemptingto reduce the liability fears of residential prop-erty owners, property owners whose land isaffected by contamination originating off-site,and prospective purchasers of contaminatedproperty. These policies are all part of a general EPA initiative to encourage brownfieldredevelopment.

There are several critical components tothe liability scheme that Superfund creates.First, liability is retroactive, meaning that a per-son may be liable even if the activities thatmake them liable occurred before the statutewas enacted in 1980. Second, liability underSuperfund is strict. This means that a party canbe held liable solely on the basis of a releaseof a hazardous substance, without any proof offault. Finally, Superfund imposes joint andseveral liability. This legal doctrine providesthat each person or company who contributedto the contamination at a site could be madeto pay for the entire cleanup.

In practice joint and several liability is notas harsh as it appears in theory. The lawallows a person who has paid for a cleanup torequire others who are liable to contribute tothe total paid. Joint and several liability simplywas intended to leave it to those who wereresponsible for the contamination, rather thanto the government, to pursue other responsibleparties and to compel contribution from them.The federal government spends a reasonableamount of time and resources on determiningthe potentially responsible parties and gather-ing evidence about how they contributed to

the conditions at a site. It usually makes theinformation available to them and encouragesthem to negotiate a fair division of the costsamong themselves. The potentially responsi-ble parties are free to use any method or setof principles in dividing the costs. Factors thatare often considered include the volume ofmaterial contributed by each party and the toxicity of the material.

2. State Regulatory Cleanup Programs

In 1976, New Jersey created the nation’sfirst program to clean up contaminated land,and now almost every state has a regulatory orstate superfund program that requires thosewho are responsible for contamination to cleanit up and provides money for the state to cleanup sites.

State cleanup programs are responsible forfar more contaminated sites than EPA isresponsible for under the Superfund program.Approximately 1,200 sites are on the NationalPriorities List (giving EPA primary responsibilityfor cleanup), but tens of thousands of contami-nated sites are not on the NPL. At these sites,the federal government is often not involved atall, and the states oversee, enforce or pay formost of the cleanups.

Cleanup standards. Determining the appro-priate level of cleanup for contaminated sitesinvolves technical, administrative, and econom-ic issues that are evaluated on a site-by-sitebasis. States vary considerably in the exten-siveness and formality of procedures that theyuse to set cleanup standards. States with themost active cleanup programs have adoptedprocedures for determining cleanup levels thatallow the state agency to consider a variety offactors. These may include:

• health-based risk assessment;• cost-effectiveness;• future land use;• federal guidelines and standards (from

Superfund or other programs);• background levels of contaminants;• drinking water standards; and• water quality standards.

59APPENDIX B

In recent years, the future use of a site has become a more important factor for manystates in deciding how much to clean up asite. This may involve some guessworkbecause the future use of the site may not becertain, but the state agency will look at thecurrent land use, zoning requirements, andproposed uses for a site. If a site will be usedfor an industrial or commercial facility —where children will not be exposed to contam-inated soils, or groundwater will not be usedfor drinking water — the cleanup standardsmay be different than if it will be used for resi-dential activities. For example, the state mightallow contaminated groundwater or soils to beleft in place because the planned land use ofthe site will reduce the risk that people will beexposed to that contamination. Most statesalso use institutional controls to ensure thatproperty owners maintain the specified landuse in the future or that if the use changespublic health and the environment will continueto be protected from the contamination.

Liability. State cleanup laws frequently allowthe state to require persons responsible forcontaminated sites to clean up the sites, butthe specific liability rules vary from state tostate. Most state statutes follow the federalSuperfund law by making a wide spectrum ofactors, including owners, operators, generators,and transporters, responsible parties. Eventhose states whose laws are not similar to thefederal Superfund law may be able to holdliable operators, generators or transporters thathave put a hazardous substance where it hasentered groundwater. This is possible becausemost states also have a general provision pro-hibiting pollution of “waters of the state,”which may be interpreted to impose strict lia-bility for actions that cause pollutants to entersurface water or groundwater. It is, therefore,important to determine how the state where asite is located applies its laws.

Another important aspect of liability iswhether the law applies retroactively. Forty-one states make responsible parties liable retro-actively. Only California, Colorado, Idaho,Montana, Nebraska, Utah, West Virginia, andWyoming do not impose retroactive liability.

Most states impose strict liability on per-sons responsible for releases of hazardous substances. Strict liability means that the statedoes not need to prove that the responsibleparty committed a negligent, reckless, or intentionally wrongful act. Rather, it mustshow simply that the party contributed to thecontamination, without proof of fault. Otherliability standards require the state to satisfy ahigher burden of proof — such as proof ofnegligence or willful intent by a responsibleparty. Forty states have strict liability standards.The remaining states either do not specify liability standards or require proof of fault.

Many contaminated sites have more thanone responsible party, including site ownersand operators, the generators of the hazardoussubstances, the transporters of the hazardoussubstances, and people who arranged and disposed of hazardous substances. If state lawdoes not specify how to allocate liability whenmore than one person is liable, then joint andseveral liability is the traditional method ofassigning costs. It is used in the federalSuperfund program and by 36 states in theirregulatory cleanup programs. The joint andseveral liability standard means that each com-pany that contributed in any way to the con-tamination is held responsible for the entireliability unless it can show that its contributionto the harm was distinct and divisible. Jointand several liability enables a government tosue one or more of the responsible parties forthe full cost of the cleanup, and leave it tothem either to prove that their share is divisi-ble or to pay the government the full amountand then seek to recover contributory sharesfrom other responsible parties. Joint and sev-eral liability rarely results in a single party pay-ing all of the costs. Instead, it usually causesthe responsible parties to negotiate their sharesof the costs among themselves.

In contrast, proportional liability requiresthe government to prove how much of thetotal cost each party was responsible for caus-ing (which may be determined in a variety of ways). A few state laws use proportionalliability, and some states use a hybrid approach.Of the 36 states that use joint and several


liability, 11 of them also specifically allowresponsible parties an opportunity to provetheir appropriate share, or enter into an alloca-tion process. In most of these states liability isfirst presumed to be joint and several, butresponsible parties are allowed to prove theirshare. Five states specify proportional liabilityas the only standard. Nine states do not speci-fy how to divide costs when more than oneperson is liable. Some of these have nocleanup program comparable to Superfund,while others simply are silent on the allocationstandard. States that have no allocation stan-dard may still use joint and several liability asa common law rule.

3. Leaking Underground Storage Tank Cleanup Programs

In 1984 and 1986, Congress passed lawsrequiring owners and operators of under-ground storage tanks (USTs) to meet standardsdesigned to prevent leaks and to detect,report, and clean up leaks that might occur.The program is a part of the ResourceConservation and Recovery Act (RCRA). Itapplies to tanks that store certain hazardoussubstances and petroleum or petroleum-basedsubstances, such as motor fuels, jet fuels, fueloils, lubricants, petroleum solvents and usedoil. EPA estimates that there are 2 millionunderground storage tanks, with 95 percent ofthem storing gasoline or other petroleum prod-ucts and the remainder containing hazardouschemicals. The UST program applies to thevast majority of underground tanks, but thereare some exceptions, including:

• tanks containing hazardous wastes (as defined and regulated under the hazardous waste program of RCRA (see below);

• farm or residential tanks with a capacityof 1,100 gallons or less;

• tanks storing heating oil for consump-tion at the site where stored;

• surface impoundments; • flow-through process tanks;

• liquid traps directly related to oil or gas production and gathering operations; and

• tanks that are above the floor in an underground area such as a basement or mine.

The large number of USTs led Congressand EPA to design the federal program so thatstates would administer it. The federal law setsminimum standards for —

• design, installation, operation, upgrad-ing, leak detection, and closure of USTs;

• reporting and cleanup of leaks from USTs; and

• financial responsibility to assure that costs of cleanup and liability to third parties will be covered.

States are allowed to administer programsthat are approved by EPA as being “no lessstringent” than the federal program. In prac-tice UST programs are primarily implementedby states. Many states have closely followedthe federal rules in creating their programs, but a number of states have adopted morestringent provisions, making it essential thatowners and operators review their state’s rules.

Liability. Owners and operators of USTs arejointly and severally liable for meeting the leakprevention, detection and cleanup require-ments of the statute. Notification requirementsapply only to owners. Lenders who hold asecurity interest in a tank are not owners solong as they do not manage the UST, and donot otherwise produce, refine or market petro-leum. An operator is any person in control of,or having responsibility for, the daily operationof an UST. Only current operators of tanks arecovered. Typical owners and operators ofUSTs include, service station operators, auto-mobile dealerships, bus and taxi companies,local governments (police and fire departmentsand school bus yards), petroleum bulk plantoperators, delivery services, shopping centers,and factories.

Cleanup (Corrective Action). The UST pro-gram was designed to reduce the likelihood ofundetected leaks and of groundwater becoming

61APPENDIX B

contaminated from such leaks, by requiringtanks to have a method of detecting leaks.Therefore, if any leak detection method orother condition, such as finding a chemicalstored in the tank in the area surrounding atank, indicates that a tank may be leaking, theowner or operator must report the suspectedleak within 24 hours and, within seven days,test the tank and associated lines to determineif a leak exists. A tank that fails the test must be repaired, replaced, or upgraded andthe owner or operator must begin corrective action (cleanup). If the reason for suspectinga leak was that a chemical stored in the tankwas found in the surrounding area, the owneror operator must check the site for contamina-tion. Cleanup is required if this check revealscontamination.

Cleanup under the UST program is site-specific. The federal rules outline a processfor owners and operators to respond to a con-firmed leak of petroleum or a hazardous sub-stance from an UST. The process emphasizesearly involvement of the state agency, rapidresponse, and site-specific cleanup standards.Within 24 hours of confirming that there hasbeen a leak owners and operators must reportthe leak to the state, take immediate action toprevent further leaks, and identify and mitigatefire, explosion and vapor risks. Spills of fewerthan 25 gallons of petroleum, or less thanspecified quantities of hazardous substances,do not need to be reported if they are cleanedup within 24 hours and do not cause a sheenon a lake or stream. Owners and operatorsmust also take first steps to clean up the leakand report those steps to the state within 20days of the leak. They must also investigatethe area around the UST to determine the size and nature of the leak and report the findings of the investigation within 45 days.Further investigation is required if the initialfindings reveal —

• free product;• that groundwater wells have been

affected;• that contaminated soils may be in

contact with groundwater; or • more extensive investigation is needed.

The federal UST regulations do not setcleanup standards, leaving that decision to thestate agency to make on a site-specific basis.States vary in the standards they apply, soowners and operators need to review theirstate UST program before beginning cleanup.The owner or operator must prepare and submit to the state a cleanup plan whenrequested by the state. Cleanup may beginbefore the plan is submitted or approved, but the owner or operator must notify the state before beginning cleanup, comply withany conditions imposed by the state, andincorporate those cleanup actions into the planwhen it is submitted for approval. At a mini-mum the plan should include a description ofthe physical and chemical characteristics of the substance that leaked, the hydrogeologiccharacteristics of the UST, uses of nearby sur-face water and groundwater and the potential effect of contamination on these uses, and anexposure assessment.

Paying for cleanup. Federal regulationsrequire all owners and operators of petroleum-containing USTs to show that they can pay the costs of cleanup and of damages to thirdparties resulting from a leak. Most states have created UST funds to assist owners andoperators in meeting these financial responsi-bility requirements and to help pay the costsof cleaning up leaks from USTs. Typically,an owner or operator may apply to the state fund for reimbursement of cleanup costs and damages paid to third parties above adeductible amount.

4. The Resource Conservation andRecovery Act Corrective Action Program

The federal government operates a secondmajor cleanup program under RCRA. As withthe UST program, and unlike the Superfundprogram, EPA may authorize states to adminis-ter the RCRA cleanup program instead of thefederal government. RCRA cleanups, calledcorrective action, are limited to facilities thathave a permit for the treatment, storage, ordisposal of hazardous waste under RCRA or an


equivalent state program. Despite the special-ized nature of the RCRA cleanup program, itcovers more sites than the federal Superfundprogram- approximately 3,700 sites, comparedto about 1200 sites on the NPL. The cleanupprogram is one aspect of a detailed programfor regulating the generation, transportation,storage, treatment and disposal of hazardouswastes. These regulations are designed toavoid the creation of conditions that couldlead to a RCRA facility becoming a brownfield.As a matter of practice EPA has separated the RCRA and Superfund cleanup programs,but RCRA sites could be covered by Super-fund because hazardous wastes covered byRCRA also are included within the definition of hazardous substances under the Superfundprogram.

A state may administer the regulatory program for hazardous wastes instead of thefederal government if the state submits a program that meets minimum standards estab-lished in the statute. In practice, many statessimply copy the federal hazardous waste regu-lations, assuring that their programs will quali-fy. Thus, EPA has authorized most states toadminister their own programs for regulatinghazardous wastes.

Among the most important aspects ofRCRA is its regulation of treatment, storage,and disposal facilities. Operators of facilitiesthat treat, store, or dispose of hazardouswastes must obtain a permit. To obtain andkeep a permit, the facility must meet design,operation, performance, corrective action(cleanup) and financial responsibility standardsestablished by EPA.

The owner or operator of a treatment,storage or disposal facility must clean upreleases of hazardous waste or constituents ofhazardous waste from the facility. The goal ofcleanup under this law is to eliminate, asmuch as practical, threats to human health andthe environment and to clean up contaminatedwater and soil to a level consistent with currentand expected uses of the site. Cleanup maybe required for parts of a hazardous waste

facility that managed nonhazardous solidwaste, called solid waste management units,even if the waste was placed in the unit beforethe RCRA rules went into effect. The owner or operator must also clean up beyond theboundary of the facility where that is necessaryto protect human health and environment,unless the owner or operator can show thatthe necessary permission to clean up was notgranted, despite best efforts to obtain permis-sion from the property owner. One of theindications that a release may have occurred is if groundwater monitoring wells, required as part of the standards for operating a facility,show that the level of a suspect chemicalexceeds background levels. Cleanup mayinclude pumping of leachate from an impound-ment or landfill, or, if the levels exceed drink-ing water standards, pumping and treating the groundwater.

5. State Cleanup Programs for Dry Cleaners

In the past few years some states haveadopted special programs for cleaning up oneof the most ubiquitous environmental contami-nation problems. Although perchloroethylene,the solvent used in dry cleaning, evaporatesquickly and is therefore primarily thought of asa contributor to smog, it has also contaminatedthe soils near dry cleaners. As many as twentystates have created special funds to pay atleast part of the cost of cleaning up these sites.Florida pioneered this program at the instiga-tion of the dry cleaning industry. A typicalstate program includes a state-managed fund,paid for by fees collected from current drycleaners, which is used to partially pay forcleanups. In Minnesota, for example, drycleaners pay $500 to $1500 annually plus a fee of about 70 percent of the cost of the per-chloroethylene they use. In Minnesota, drycleaners are responsible for the first $10,000 ofthe cost of cleaning up their facility, with thestate fund paying for any additional costs.

63

Brownfield and VoluntaryCleanup Program Incentives Appendix C

EPA STATE VOLUNTARY PROGRAM BROWNFIELD INCENTIVESREGION INCENTIVES

1 CT Covenant not to sue; financial Dedicated staff resources; expeditedincentives. review; financial incentives.

ME Protection from enforcement Not applicable.and contribution for contamination remediated to the satisfaction of the state.

MA Expedited cleanup process; Covenant not to sue; financial ability to achieve clear endpoints. incentives.

NH Not applicable. Parties may receive covenants not to sue, which protect against liability under state law for contamination addressed by approved remedial action program.

RI Covenant not to sue for Covenant not to sue fornonresponsible performing nonresponsible performing parties,parties; contribution protection as well as contribution protection;against third party claims. funding authorized for facilitation

of reuse/redevelopment.

VT Not applicable. Limited liability protection for redeveloper and successors under the Hazardous Waste Management Act; site assessment funds through HUD grants.

2 NJ Parties can set own schedule; Loans, grants, tax incentives,covenant not to sue which carries remedial cost reimbursement,with the property. liability release, and variances

from technical standards.

NY Cleanup to levels safe for Release from liability transferableintended use; liability release to future owners; 75% of costsfor contaminants addressed. associated with investment and

cleanup by municipalities of publicly owned property.



PR Not applicable. Not applicable.

3 DE Release from liability for Low-interest loans; tax credit; prospective buyers when grants.certificate of completion issued.

DC Not applicable. Not applicable.

MD Streamlined process; mandatory Property tax credits; grants anddeadlines for agency loans; free site assessments.determinations; no further requirements determination; certificate of completion; release of liability.

PA Relief from liability under state Not applicable.law for site remediation, including citizen suits and contribution actions; special cleanup standards for abandoned properties; technical assistance.

VA No-further-action certificate issued Not applicable.upon satisfactory completion of remediation provides immunity fromenforcement action under state law.

WV Voluntary remediation agreement; Revolving loan fund for site certificate of completion. assessments; other related activities.

4 AL Reduced regulatory oversight and Not applicable.cost; increased speed; possibility ofearning no-further-action letter.

FL Not applicable. Liability protection for program participants (and lenders under certain conditions) from state and third party claims; issuance of no-further-action letters; “risk based corrective action,” whereby participants may be allowed to use institutional and engineering controls to manage risk bycontrolling exposure; $2500 bonus refund for each new Floridajob created; encouragement of local governments to offer redevelopment incentives such as streamlined permitting, tax credits,and low-interest loans.

65APPENDIX C


GA Limitation of liability; no cost Not applicable.recovery actions for monies previously spent by state; limitation on liability for third partycivil claims for pre-existing releases.

KY Not applicable. Not applicable.

MS Expedited site review; no-further- Liability protection.action letter when appropriate measures have been taken and approved.

NC Property transfer; liability limit; No-further-action letter; no-further-action letter. possible limit on liability.

SC Covenant not to sue for successful Covenant not to sue for successfulcompletion of work; contribution completion of work; contributionprotection for nonresponsible parties. protection for nonresponsible parties.

TN No-further-action letter; state will Not applicable.not promulgate lien or notice of hazardous substance on property deed; exemption from public hearings; site not placed on list; payment of orphan shares by state.

5 IL Issuance of no-further-remediation State tax credit; state brownfield letter releasing party from both cost grants.recovery and state enforcement.

IN Certificate of completion; governor Tax rebate for nonpolluters;issues a covenant not to sue. brownfield comfort letter; no-

further-action letter under development; state revolving loan fund.

MI Protection for historical releases once Grants to local governments for remedial action plan is complied investigation and remedial action with; no protection for new events. and protection against liability for

historical contamination (if not party to the event); assistance withsite investigations; exemptions from liability for past contaminationfor new owners who do baseline environmental assessment prior to 45 days after ownership.

MN Technical assistance; variety of Liability assurances; financial liability assurances and financial incentives.assistance.



OH Covenant not to sue; variety of tax Not applicable.credits; low-interest loans; grants.

WI Financial incentives and liability Liability protection; financialexemptions. incentives, including tax credits.

6 AR Limitation of liability for program Release from state liability ifparticipants. cleanup is properly executed; low-

interest revolving loan program.

LA Liability exemption for disposal or Outreach and education todischarge of hazardous substance potential redevelopers.or waste; certificate of completion.

NM Liability protection during and Not applicable.following voluntary remediation agreement; certificate of completion for owner/operator; covenant not to sue for third party purchaser.

OK Certificate of completion; certificate Certificate of completion; certificateof no action (includes liability of no action includes liabilityprotections for cleaned up portions protections for cleaned up portionsof the site); tax incentives; job of the site; tax incentives for incentives; advice/document review. remediation and redevelopment; job

incentives; advice/document review.

TX Release from liability to state for Education; technical assistance; contamination occurring prior to state property tax abatements;the date of issuance of the letters for federal income tax completion certificate. expensing of remediation costs.

7 IA Letter of indemnification from state Not applicable.for any future claims.

KS No-further-action letter. Not applicable.

MO No-further-action letter from state. Grants, loans, loan guarantees and tax credits.

NE No-further-action letter. Not applicable.

8 CO Approval letter that states site Not applicable.does not pose risk; possible letter from EPA.

MT Enforcement stay and/or a Not applicable.no-further-action letter.

ND Not applicable. Not applicable.

67APPENDIX C


SD Not applicable. Not applicable.

UT Letter from state acknowledging Not applicable.site has been cleaned up and providing release from future liability.

WY Not applicable. Not applicable.

9 AZ Expedited review of remedial Not applicable. actions and single point of contact.

CA Streamlined program; cooperative Not applicable.working relationship; tailored to each site/project; no-further-actionletter/certificate of completion.

HI Letter of completion issued within Not applicable.30 days after cleanup; completionrecorded on property deed, running with the land; completionletter sent to building permitagency; exemption from future liability.

NV “Closure” or comfort letter with Not applicable.respect to the spill incident.

10 AK No-further-action letter. Not applicable.

ID Tax incentives; covenant Not applicable.not to sue.

OR No-further-action letter. Not applicable.

WA Site-specific technical assistance Not applicable.with written opinions; no-further-action letters.

Source: An Analysis of State Superfund Programs: 50 State Study, 1998 Update, Environmental Law Institute. Chart is

based on state information available as of December 31, 1997.

69

Alabama

Alabama Department of Environmental Management

Voluntary Cleanup ProgramP.O. Box 301463Montgomery, AL 36130-1463(334) 271-7700http://www.adem.state.al.us

Alaska

Alaska Department of Environmental Conservation

Contaminated Sites Remediation ProgramVoluntary Cleanup Program410 Willoughby AvenueJuneau, AK 99811(907) 465-5390

Arizona

Arizona Department of EnvironmentalQuality

Voluntary Cleanup and Brownfields Programs3033 North Central AvenuePhoenix, AZ 85012(602) 207-4166http://www.adeq.state.az.us/

Arkansas

Arkansas Department of Pollution Control and Ecology

8001 National DriveP.O. Box 8913Little Rock, AR 72219-8913(501) 682-0798

California

California Environmental Protection AgencyDepartment of Toxic Substances ControlSite Mitigation ProgramP.O. Box 806400 P StreetSacramento, CA 95812-0806(916) 323-3700http://www.calepa.cahwnet.gov/dtsc.htm/

Colorado

Colorado Department of Public Health & Environment

Hazardous Materials & Waste Management Division

Voluntary Cleanup Program4300 Cherry Creek Drive SouthDenver, CO 80222-1530(303) 692-3300http://www.state.co.us/gov_dir/cdphe_dir/hm/

rp_gen.ht-ml

Connecticut

Connecticut Department of Environmental Protection

Urban Sites Remedial Action Program79 Elm StreetHartford, CT 06106-5127(860) 424-3000http://dep.state.ct.us/

Brownfield and VoluntaryCleanup Program List Appendix D


Delaware

Department of Natural Resources and Environmental Control

Division of Air and Waste ManagementSite Investigation and Restoration BranchVoluntary Cleanup Program391 Lukens DriveNew Castle, DE 19720(302) 395-2600http://www.dnrec.state.de.us

District of Columbia

Department of Consumer and Regulatory Affairs

Environmental Regulation Administration2100 Martin Luther King Jr. Ave., S.E.Room 203Washington, D.C. 20020(202) 645-6080, ext. 3011

Florida

Department of Environmental ProtectionDivision of Waste ManagementThe Florida Brownfields Program2600 Blair Stone RoadMS 4505Tallahassee, FL 32399-2400(850) 487-3299http://www.dep.state.fl.us/dwm/programs/brownfields/

Georgia

Georgia Department of Natural ResourcesEnvironmental Protection DivisionFacilities Compliance Program205 Butler Street, S.E., Suite 1462Atlanta, GA 30334(404) 656-2833http://www.ganet.org/dnr/environ/

Hawaii

Hawaii Department of HealthHazard Evaluation and Emergency Response

OfficeVoluntary Response Program919 Ala Moana BoulevardHonolulu, HI 96814(808) 586-4249http://www.hawaii.gov/health

Idaho

Division of Environmental Quality1410 N. HiltonBoise, ID 83706(208) 373-0276http://www.state.id.us

Illinois

Illinois Environmental Protection AgencyBureau of LandState Brownfields Program1001 North Grand Avenue EastSpringfield, IL 62702(217) 785-3497http://www.epa.state.il.us

Indiana

Indiana Department of Environmental Management

Brownfields Program2525 N. ShadelandP.O. Box 6015Indianapolis, IN 46202-6015(317) 308-3058http://www.state.in.us/idem/

Iowa

Iowa Department of Natural ResourcesEnvironmental Protection DivisionVoluntary Cleanup Program900 E. Grand AvenueDes Moines, IA 50319(515) 242-5817http://www.state.ia.us/government/dnr/

organiza/epd/index.htm

71APPENDIX D

Kansas

Kansas Department of Health and EnvironmentBureau of Environmental RemediationVoluntary Cleanup ProgramForbes Field, Building 740Topeka, KS 66620(785) 296-1660http://www.kdhe.state.ks.us/ber/

Kentucky

Department for Environmental ProtectionDivision of Waste Management14 Reily RoadFrankfort, KY 40601-1190(502) 564-2150http://www.nr.state.ky.us/nrepc/dep/dep2.htm

Louisiana

Louisiana Department of Environmental QualityInactive and Abandoned Sites DivisionVoluntary Cleanup ProgramP.O. Box 82178Baton Rouge, LA 70884-2282(255) 765-0487http://www.deq.state.la.us/oshw/ias/ias.htm

Maine

Department of Environmental ProtectionBureau of Remediation and Waste ManagementVoluntary Cleanup Program17 State House StationAugusta, ME 04333-0017(207) 287-7688http://www.state.me.us/dep/

Maryland

Maryland Department of the EnvironmentWaste Management AdministrationVoluntary Cleanup Program2500 Broening HighwayBaltimore, MD 21224(410) 631-3000http://www.mde.state.md.us/welcome.html

Massachusetts

Massachusetts Department of Environmental Protection

Brownfields Remediation1 Winter Street, Seventh FloorBoston, MA 02108(617) 292-5500http://www.state.ma.us/dep/bwsc

Michigan

Environmental Response DivisionDepartment of Environmental QualityP.O. Box 30426Lansing, MI 48909(517) 373-9837http://www.deq.state.mi.us

Minnesota

Minnesota Pollution Control AgencySite Response SectionVoluntary Cleanup Program520 Lafayette RoadSt. Paul, MN 55155-4194(651) 282-5332http://www.pca.state.mn.us/cleanup/index.html

Mississippi

Mississippi Department of EnvironmentalQuality

Hazardous Waste Division, Superfund BranchBrownfields ProgramP.O. Box 10385Jackson, MS 39289-0385(601) 961-5171http://www.deq.state.ms.us/domino/deqweb.nsf

Missouri

Missouri Department of Natural ResourcesVoluntary Cleanup SectionP.O. Box 176Jefferson City, MO 651021-800-334-6946http://www.dnr.state.mo.us/homednr.htm


Montana

Montana Department of Environmental QualityRemediation DivisionVoluntary Cleanup Program2209 PhoenixP.O. Box 200901Helena, MT 59620(406) 444-1420http://www.deq.mt.gov/index.html

Nebraska

Nebraska Department of Environmental Quality

Remedial Action Plan Monitoring Act ProgramThe Atrium1200 North Street, Suite 400P.O. Box 98922Lincoln, NE 68509(404) 471-2186http://www.deq.state.ne.us

Nevada

Nevada Department of Conservation & Natural Resources

Division of Environmental ProtectionWaste Management and Corrective Action333 West Nye LaneCarson City, NV 89706(702) 687-4670

New Hampshire

New Hampshire Department of Environmental Services

Hazardous Waste Remediation BureauBrownfields ProgramP.O. Box 956 Hazen DriveConcord, NH 03302-0095(603) 271-2900http://www.state.nh.us/des/hwrb

New Jersey

New Jersey Department of Environmental Protection

Bureau of Field OperationVoluntary Cleanup ProgramP.O. Box 434Trenton, NJ 08625-0434(609) 292-2934http://www.state.nj.us/dep/srp/index.htm

New Mexico

New Mexico Environment DepartmentGround Water Quality BureauVoluntary Remediation ProgramHarold Runnels Building, Suite N23001190 St. Francis DriveSanta Fe, NM 87502(505) 827-2918http://www.nmenv.state.nm.us/

New York

New York State Department of Environmental Conservation

Environmental RemediationBrownfields and Voluntary Cleanup Programs50 Wolf RoadAlbany, NY 12233-7010(518) 457-5861http://www.dec.state.ny.us/

North Carolina

Department of Environment and Natural Resources

Division of Waste ManagementSuperfund BranchBrownfields Program401 Oberlin RoadRaleigh, NC 27605(919) 733-4996http://www.ehnr.state.nc.us/EHNR/

73APPENDIX D

North Dakota

North Dakota Department of HealthDivision of Waste ManagementHazardous Waste ProgramP.O. Box 55201200 Missouri Avenue, Room 302Bismark, N.D. 58506-5520(701) 328-5166http://www.ehs.health.state.nd.us/ndhd/

environ/wm/index.htm

Ohio

Division of Emergency and Remedial ResponseOhio Environmental Protection AgencyVoluntary Action ProgramP.O. Box 1049Columbus, OH 43216-1049(614) 644-2924http://www.epa.ohio.gov/derr/volunt.html

Oklahoma

Oklahoma Department of Environmental Quality

Waste Management DivisionVoluntary Cleanup Program and Brownfields

InitiativeP.O. Box 1677Oklahoma City, OK 73101-1677(405) 702-5100http://www.deq.state.ok.us/waste/index.html

Oregon

Department of Environmental QualityVoluntary Cleanup Program811 SW 6th AvenuePortland, OR 97204-1390(503) 229-6801http://www.deq.state.or.us

PennsylvaniaPennsylvania Department of Environmental

ProtectionLand Recycling and Cleanup ProgramP.O. Box 8471Harrisburg, PA 17105-8471(717) 783-7816http://www.dep.state.pa.us/dep/deputate/

airwaste/wm/landrecy/default.htm

Puerto RicoEnvironmental Quality BoardSuperfund and Emergency ProgramP.O. Box 11486San Juan, PR 00910(787) 767-8181

Rhode IslandRhode Island Department of Environmental

ManagementDivision of Site RemediationBrownfields Program291 Promenade StreetProvidence, RI 02908(401) 222-2797http://www.state.ri.us/dem/

South CarolinaBureau of Land and Waste ManagementSouth Carolina Department of Health and

Environmental ControlVoluntary Cleanup Program2600 Bull StreetColumbia, SC 29201(803) 898-3432http://www.state.sc.us/dhec/

South DakotaDepartment of Environment and Natural

ResourcesSuperfund/Voluntary Cleanup ProgramFoss Building523 East Capitol AvenuePierre, SD 57501(605) 773-3151http://www.state.sd.us/denr


Virginia

Virginia Department of Environmental QualityVoluntary Remediation ProgramP.O. Box 10009Richmond, VA 23240(804) 698-4236http://www.deq.state.va.us

Washington

Department of EcologyToxic Cleanup ProgramVoluntary Cleanup and Brownfields ProgramsP.O. Box 47775Olympia, WA 98504-7775(360) 407-7205http://www.wa.gov/ecology/tcp/vcp/

Vcpmain.htm

West Virginia

West Virginia Division of Environmental Protection

Office of Environmental RemediationBrownfields Programs1356 Hansford StreetCharleston, WV 25301(304) 558-2508http://www.state.wv.us/

Wisconsin

Wisconsin Department of Natural ResourcesBrownfields Program101 S. Webster St., Box 7921Madison, WI 53707-7921(608) 267-6713http://www.dnr.state.wi.us

Wyoming

Wyoming Department of Environmental QualitySolid and Hazardous Waste DivisionVoluntary Corrective Action Order ProgramHerschler Building122 West 25th StreetCheyenne, WY 82002(307) 777-7758http://deq.state.wy.us/

Tennessee

Tennessee Department of Environment and Conservation

Division of Solid Waste ManagementState Remediation SectionL & C Tower, 5th Floor401 Church StreetNashville, TN 37243(615) 532-0780http://www.state.tn.us/environment

Texas

Texas Natural Resource ConservationCommissi-on

Voluntary Cleanup ProgramP.O. Box 13087Austin, TX 78711-3087(512) 239-2498http://www.tnrcc.state.tx.us/waste/pcd/vcp/

index.html

Utah

Department of Environmental QualityDivision of Emergency Response and

RemediationVoluntary Cleanup Program168 North 1950 West, 1st FloorSalt Lake City, UT 84114-4810(801) 536-4100http://www.eq.state.ut.us/

Vermont

Department of Environmental ConservationHazardous Materials Management ProgramRedevelopment of Contaminated Properties

Program103 S. Main StreetWaterbury, VT 05671-0404(802) 241-3888http://www.anr.state.vt.us

75

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Brownfields: A Comprehensive Guide toRedeveloping Contaminated Property. Davis,Todd S. & Margolis, Kevin D. American BarAssociation Section of Natural Resources,Energy and Environmental Law. 1997.

Brownfields Law and Practice: The Cleanupand Redevelopment of Contaminated Land.Gerrard, Michael. Matthew Bender Publisher.1998.

Brownfields Cleanup Revolving Loan FundDemonstration Pilots. U.S. EnvironmentalProtection Agency. EPA 500-F-98-003. March 1998.

Brownfields of Dreams. Lerner, Steve. The Amicus Journal, Volume 17, Issue 4 at 15,New York. Winter 1996.

Brownfields Redevelopment: A Guidebook forLocal Governments and Communities.International City/County ManagementAssociation and Northeast-Midwest Institute.1997.

Brownfields Tax Incentives. U.S. Environ-mental Protection Agency. EPA 500-F-97-155.August 1997.

Brownfields Title VI Case Studies: SummaryReport. U.S. Environmental Protection Agency.EPA 500-R-99-003. June 1999.

Building Upon our Strengths: A CommunityGuide to Brownfields Redevelopment in the SanFrancisco Bay Area. Urban Habitat Program.1999.

Coming Clean for Economic Development: AResource Book on Environment Cleanup andEconomic Development Opportunities-Revisedand Updated. Bartsch, Charles & Collaton,Elizabeth. Northeast-Midwest Institute.September 1996.

Community Reinvestment Act. U.S. Environ-mental Protection Agency. EPA 500-F-97-100.April 1997.

Environmental Aspects of Real EstateTransactions. Witkin, James B. (editor).American Bar Association Section of NaturalResources, Energy and Environmental Law andthe Section of Real Property, Probate and TrustLaw. 1995.

Guidebook for Transfer of ContaminatedProperties. The National Environmental PolicyInstitute. September 1998.

Handbook for Tools for Managing FederalSuperfund Liability Risks at Brownfields andOther Sites. U.S. Environmental ProtectionAgency. EPA 330-B-98-001. November 1998.

Lessons from the Field: Unlocking EconomicPotential with an Environmental Key — 20 Case Studies of Successful BrownfieldsReuse. Pepper, Edith. Northeast-MidwestInstitute. 1996.

Sources ofFurther Information Appendix E


The Cleanup and Reuse of Brownfields: KeyIssues and Policy Choices. Waste ManagementResearch and Education Institute. University ofTennessee, Knoxville. April 1997.

Turning Brownfields into Greenbacks. Simons,Robert. Urban Land Institute. May 1998.

Voluntary and Brownfields RemediationPrograms, An Overview of the EnvironmentalLaw Institute’s 1998 Research. Breggin, Lindaand Pendergrass, John. Environmental LawReporter. June 1999.

Websites:

American Society for Testing and Materials:www.astm.org

Brownfields Information Sources:www.lehigh.edu/~injrl/subindex/

brownfields.html

Clean-Start Properties Unlimited:www.cleanstart.com

EnviroFLEX, Inc.: www.brownfields.com

Environmental Law Institute: www.eli.org

EPA Brownfields Homepage:www.epa.gov/brownfields

EPA Brownfields Regional Links:

Region 1:www.epa.gov/region01/pr/files/pr1008a.html

Region 2:www.epa.gov/r02earth/superfnd/brownfld/

bfmainpg.htm.

Region 3: www.epa.gov/reg3hwmd/brownfld/

hmpage1.htm

Liability and Other Guidance. U.S. Environ-mental Protection Agency. EPA 500-F-97-104.April 1997.

Potential Insurance Products for BrownfieldsCleanups and Redevelopment. U.S. Environ-mental Protection Agency. EPA 500-F-97-106.April 1997.

RCRA Subtitle I: The Federal UndergroundStorage Tank Program. Nagle, Laura J.Environmental Law Reporter. February 1994.

Recycling America’s Land: A National Report ofBrownfields Redevelopment. United StatesConference of Mayors. January 1998.

Recycling Land: Encouraging theRedevelopment of Contaminated Property.Geltman, Elizabeth G. Natural Resources & Environment, Vol. 10, No. 4 at 3-10. George Washington University. Washington,DC. 1996.

Standard Guide to the Process for SustainableBrownfields Redevelopment. American Societyfor Testing and Materials. Designation E-50.03.1999.

Standard Practice for Environmental SiteAssessments: Transaction Screen Process.American Society for Testing and Materials.Designation E-1528-93. 1993.

Superfund: EPA’s Use of Funds for BrownfieldsRevitalization. Government AdministrationOffice. GAO/RCED-98-87. March 1998.

Superfund State Voluntary Programs ProvideIncentives to Encourage Cleanups.Government Administration Office.GAO/RCED-97-66. 1997.

Sustainable Redevelopment of Brownfields:Using Institutional Controls to Protect PublicHealth. Pendergrass, John. Environmental LawReporter. May 1999.

77APPENDIX E

International City/County ManagementAssociation: www.ICMA.org

National Center for Brownfields Reclamation:www.brownfieldsnet.org

Northeast-Midwest Institute: www.nemw.org

The Brownfields Non-Profits Network:www.brownfieldsnet.org

Region 4:www.epa.gov/region4/wastepgs/brownfpgs/

bf.htm

Region 5:www.epa.gov/R5Brownfields

Region 6:www.epa.gov/earth1r6/6sf/bfpages/

sfbfhome.htm

Region 7:www.epa.gov/region07/specinit/brown/

brownfields.htm

Region 8:www.epa.gov/region08/cross/brown/

brownf.html

Region 9:www.epa.gov/region09/waste/brown/

index.html

Region 10:http://epainotes1.rtpnc.eps.gov:7777/r10/

cleanup.nsf/webpage/Brownfields

Documents

A GUIDEBOOK FOR BROWNFIELD PROPERTY OWNERS