April 1, 2011
While brownfields redevelopment is governed primarily by state and local law, a range of federal tax incentives and funding programs offer additional support for the redevelopment and reuse of contaminated property. To call attention to these opportunities, the Environmental Protection Agency (“EPA”) recently revised its Guide to Federal Tax Incentives for Brownfields Redevelopment and Brownfields Federal Programs Guide, providing an updated overview of often-overlooked federal resources.
One of the largest federal incentives for brownfield developers is the Brownfields Tax Incentive, I.R.C. § 198(a), which allows certain cleanup costs to be fully deducted in the year in which they are incurred, as opposed to being capitalized and deducted over a longer span. In order to qualify for this incentive: (a) the brownfield site must be “held by the taxpayer for use in a trade or business or for the production of income,” (b) there must have “been a release (or threat of release) or disposal of any hazardous substance,” including but not limited to “any petroleum product,” on the site, and (c) the taxpayer must receive “a statement from the appropriate agency of the State” certifying that the site is a brownfield and eligible for the incentive. Id. § 198(c).
Instructions for obtaining New York State certification are available through the Department of Environmental Conservation (“DEC”), and EPA has published a list of agency contacts in other states. The tax incentive is set to expire at the end of 2011, though Congress has repeatedly extended it in the past, at times applying the extensions retroactively after the program had already lapsed.
In addition to tax incentives, many other federal programs provide direct financial and technical assistance to support brownfield redevelopment, dozens of which are described in EPA’s latest Brownfields Federal Programs Guide. For more information on state and federal incentives available for the voluntary cleanup of contaminated property, contact Jeffrey Gracer.
March 15, 2011
On March 8, 2011 the EPA announced its latest round of potential Superfund sites – nominees to be listed on the National Priorities List (NPL) under the Comprehensive Environmental Response, Compensation and Liability Act of 1980 (CERCLA), commonly known as the Superfund statute. The proposed sites included the New Cassel/Hicksville groundwater contamination site (NCH Site), located in Nassau County, New York. According to EPA records the NCH Site includes approximately 10 million square feet of aquifer contaminated by chlorinated compounds, including perchloroethylene (PCE) and trichloroethelyne (TCE).
EPA’s nomination of the NCH Site reflects an emerging trend toward large, multiparty Superfund sites in the New York metro area. In addition, since 2009 the rate at which EPA has been adding sites to the NPL has increased from prior years, and the recent nominations reinforce this trend.
Complex, multiparty sites were relatively common in the two decades following CERCLA’s enactment in 1980. EPA listed many former landfills, casting a broad liability net over dozens of potentially responsible parties (PRPs) at a time, and these sites often involved tens or hundreds of millions of dollars in response costs. However, while listings continued, by 2005 practitioners and commentators had noted a dropoff in large government-led cleanups.[1] Around this time, intense economic pressures to develop property also resulted in many voluntary cleanups by parties who had no prior connection to the contamination. The focus of CERCLA practice shifted accordingly, from EPA-led megasites to voluntary cleanups, with courts scrutinizing the legal avenues of recovery for volunteers under the statute’s cost recovery and contribution provisions.[2]
More recently, the EPA has named several large, complex, and costly sites in the New York metropolitan area to the NPL, including the Gowanus Canal and Newtown Creek, each estimated to involve cleanups costing hundreds of millions of dollars. EPA is also pursuing efforts to investigate and remediate portions of the Lower Passaic River, as part of the Lower Passaic River Restoration Project. At another large cleanup site, in July 2010, 100 PRPs signed on to conduct a Remedial Investigation/Feasibility Study for the Berry’s Creek study area in Bergen County, NJ. The first phase of dredging of the Hudson River Superfund site by General Electric began in 2009 and cost approximately $560 million. As the above examples illustrate, EPA’s Region 2 appears increasingly focused on contaminated waterways, which by their nature involve complex and costly cleanups.
The rising number of Superfund sites is not just a local development; the number of listings is on the rise nationwide. Between 2003 and 2008 EPA listed an average of 14.6 new sites per year. By contrast, in the first few months of this year, 25 sites have already been proposed or listed, and if all those sites are listed average new listings per year since 2009 will jump to 21.6—50% over the previous five years. Of course, more sites may also be listed in the remaining nine months of 2011.[3]
[1] See, e.g., David A. Dana, State Brownfields Programs as Laboratories of Democracy?, 14 N.Y.U. Envtl. L.J. 86, 87-89 (2005) (analyzing “decline” of government-led CERCLA cleanups and enforcement).
[2] See, e.g., United States v. Atlantic Research Corp. 551 U.S. 128 (2007); Consolidated Edison v. UGI Utilities, Inc. 423 F.3d 90 (2d. Cir. 2005).
February 16, 2011
SPR attorneys recently served as environmental counsel to Acumen Capital Partners in its acquisition of the former Pfizer manufacturing facility in Brooklyn. The plant, comprising 660,000 square feet, had been vacant since Pfizer operations ceased there in 2008. Pfizer traces its corporate origins to the neighborhood, having commenced its operations there in 1849.
Plans for the property include conversion to light industrial and commercial uses. Acumen seeks to incorporate environmental sustainability into its redevelopment projects, and is known for constructing a rooftop farm comprising 43,000 square feet on another former industrial property in Long Island City. Five acres of undeveloped property remain north of the former Pfizer plant, which Pfizer has envisioned for potential development as affordable housing.
SPR represented Acumen in evaluating the environmental aspects of the purchase of the plant. For more information contact Michael Bogin or Jeff Gracer.
February 7, 2011
For over two decades, the Environmental Protection Agency (“EPA”) has considered four exposure pathways in determining whether to list contaminated sites on the Superfund National Priorities List (“NPL”): groundwater, surface water, soil and air. In a Federal Register notice published January 31, 2011, EPA solicited public comment on the potential addition of a fifth pathway: soil vapor intrusion.
The migration of vapors from subsurface contamination into overlying buildings, known as vapor intrusion, is a growing concern for federal and state environmental regulators. Vapor intrusion is most common at sites with elevated levels of volatile organic compounds – including chlorinated solvents and sometimes gasoline – which enter indoor air through openings around sewer lines, cracks in a building’s foundation or basement, or other preferential pathways.
Under the federal Superfund law, EPA screens contaminated sites for listing on the NPL through its Hazard Ranking System, assigning each site a score based upon its perceived threat to human health and the environment. The risk of vapor intrusion, however, does not currently factor into this determination. A May 2010 Government Accountability Office (“GAO”) report found that, given EPA’s inability to designate NPL sites on the basis of vapor intrusion, “States may be left to remediate those sites without federal assistance, and given states’ constrained budgets, some states may not have the ability to clean up these sites on their own.”
From now through April 16, 2011, EPA will be collecting public comment on the potential revision of the Hazard Ranking System (“HRS”) to account for vapor intrusion. It plans to hold three public listening sessions on the topic. While it has not proposed specific regulatory changes at this point, the Agency “will consider the information gathered from this Notice, listening sessions, and other sources before making a decision to issue a proposed rulemaking to add subsurface contaminant intrusion to the HRS.”
EPA is also in the process of revising its draft guidance for the evaluation of vapor intrusion risks, which was initially released in 2002 but has yet to be finalized. EPA outlined a number of likely changes to that document last October, and it plans to issue updated guidance by November 2012.
Finally, the New York State Department of Environmental Conservation is continuing to reevaluate vapor intrusion pathways, and has reopened several sites that had already been remediated and delisted to require additional monitoring or mitigation measures. For more information on these reopenings, or on federal and state vapor intrusion policy developments, contact Christine Leas, Jeffrey Gracer, or Michael Bogin.
November 11, 2010
The New York State Department of Environmental Conservation (“DEC”) recently issued CP-51/Soil Cleanup Guidance, which applies to each of the remedial programs administered by DEC’s Division of Environmental Remediation (including, inter alia, the Inactive Hazardous Waste Disposal Site Remediation Program, the Brownfield Cleanup Program and the Spill Response Program). The new guidance replaces Technical Administrative Guidance Memorandum (“TAGM”) 4046: Determination of Soil Cleanup Objectives and Cleanup Levels, dated January 24, 1994.
By providing for defined remedial approaches and uniform standards, CP-51 marks an important departure from TAGM which provided recommended soil cleanup objectives (“RSCOs”), but did not explain how the Department would use those RSCOs in any particular remedial program or in any particular case. Promulgation of the new Part 375 Soil Cleanup Objectives (“SCOs”) in 2007, which specified that they applied to the Brownfield Cleanup Program and the State Superfund Program, lead to an odd situation in which different programs administered by Department (for example the Spills and Brownfield Cleanup Programs) applied different soil cleanup objectives in similar locations and matters without any explanation how or why this was being done.
The new guidance sets forth the procedure for selecting the appropriate soil cleanup levels under each remedial program, as well as for determining whether the standards for protection of ecological resources or protection of groundwater should apply. It also discusses soil cleanup levels to address “nuisance conditions” such as odors and staining, polycyclic aromatic hydrocarbons (“PAHs”) and polychlorinated biphenyls (“PCBs”).
CP-51 supplements the regulatory soil cleanup objectives (“SCOs”) by establishing supplemental SCOs (“SSCOs”) for those chemical compounds for which Recommended Soil Cleanup Objectives had been established under TAGM, but were excluded from DEC’s Part 375 regulations. Parties may also elect to determine site-specific soil cleanup levels, but must do so in accordance with the same approach utilized by DEC in establishing the SCOs and SSCOs.
In an apparent effort to address recent BCP case law to the contrary, DEC emphasizes that SCOs and SSCOs are merely screening tools and that:
The exceedance of one or more applicable SCOs or SSCOs…alone does not trigger the need for remedial action, define “unacceptable” levels of contaminants in soil, or indicates that a site qualifies for any DEC remedial program…
(CP-51/Soil Cleanup Guidance at 12.)
A copy of the CP 51 is available here.
November 9, 2010
Governor-elect Andrew Cuomo released a 160-page environmental agenda for New York on Saturday, October 30, three days before he was elected to be New York’s next Governor on January 1st, 2011. The document allows some insight into the vision and priorities of the next administration with regard to the environment.
One of the most significant components of the agenda is an overall vision of promoting and talking about environmental protection in the context of economic development in the State. It emphasizes that “environmental protection can benefit our economy—creating green jobs while reducing pollution …”[1] The environmental agenda, like other parts of Cuomo’s published agenda for reforming New York State, proposes review and reform of the state’s environmental bureaucracy to maximize environmental protection and coordination among agencies, and create cost savings. The Governor-elect would task the state’s Spending and Government Efficiency Commission with this review of existing agencies and procedures.[2]
The document also suggests that Governor-elect Cuomo will be as much about the carrot as the stick when it comes to promoting conservation. He proposes a “Cleaner Greener Communities Competitive Grant Program” to help create incentives for sustainable communities, encourage smart growth, and reduce sprawl. The grants would support innovative comprehensive regional plans which incorporate sustainability, transportation, emissions and efficiency issues into the planning framework.[3] Where the funds for such a grant program will come from is not spelled out.
Cuomo’s environmental agenda supports the continuation of New York’s Brownfield Cleanup Program (“BCP”), including the tax credits component, while streamlining the BCP process to ensure its effective use on those sites that need it most.[4] The document does not address the State’s participation in the Federal Superfund program, from which current Governor David Paterson has proposed to withdraw.
On Marcellus Shale, the Cuomo agenda takes a middle road, stating that “New York State must ensure that, if and when the Shale’s natural gas is obtained, it does not come at the expense of human health or have adverse environmental impacts.”[5] Potential impacts to watersheds are given special mention, suggesting that drilling in the New York City watershed and other watersheds will be given enhanced scrutiny. On another energy-related issue, Cuomo restates a longstanding position that Indian Point nuclear plant be shut down.[6]
Cuomo also proposes a review of the State Environmental Quality Review Act (“SEQRA”) process to expand SEQRA considerations to include environmental justice, and strengthen the current Environmental Justice Policy “so it gives more robust assurance that adequate consideration is given to environmental justice.”[7]
While budget and political realities will no doubt impact Cuomo’s implementation of his agenda, the Governor-elect’s proposed agenda nonetheless provides a window into his environmental policy preferences in advance of his taking office on January 1st. This preview suggests a potential that the new administration will take a broader view of environmental protection that goes beyond regulation to promoting smart growth and sustainable development as part of an overall statewide focus on economic development.
- Download a copy of the agenda here (pdf)
[1] Cuomo 2010, Cleaner Greener NY, at 1 (2010).
[2] Id. at 7.
[3] Id. at 91-92.
[4] Id. at 94.
[5] Id. at 96.
[6] Id. at 95.
[7] Id. at 97-98.
October 20, 2010
On October 14, the Environmental Protection Agency (“EPA”) released a Draft Management Plan for Siting Renewable Energy on Potentially Contaminated Land and Mine Sites. The draft plan is open to public comment through November 30, 2010.
The plan outlines 20 steps that EPA has recently taken or will take over the next two years to promote renewable energy development on contaminated properties. Upcoming steps include new guidance on the siting of such facilities while clean-up is ongoing, the consideration of new tools to address liability concerns related to renewable energy development at contaminated sites, and the incorporation of financial incentives for such redevelopment into existing loan, grant and tax incentive programs.
EPA will also be selecting pilot communities to serve as models for different types of renewable energy development at contaminated facilities. The agency plans to solicit applications for these pilot projects in early 2011.
The draft plan is part of EPA’s ongoing RE-Powering America’s Land initiative, launched two years ago to “identify Brownfields, RCRA, Superfund, landfill and abandoned mine land with wind, solar, biomass and geothermal development potential” and collaborate with public and private stakeholders to encourage such re-development. The initiative has produced maps overlaying EPA-tracked sites in New York with generation and siting potential for wind energy, photovoltaic solar energy, biopower facilities and biorefinery facilities.
« Newer Posts — Older Posts »
|
|
| |
|
