The Hitchhiker’s Guide
to the
‘Contaminated Property’ Galaxy
Solar System of Contaminated Properties
100,000 - 200,000 Und. Storage Tanks (abandoned)
40,000 Superfund sites 6,400 RCRA Sites
(removal & remedial)
450,000 - 600,000 Brownfields
What Are Brownfields? (Federal Definition)
Real property, the expansion, redevelopment, or reuse of which may be complicated by the presence or potential presence of a hazardous substance, pollutant, or contaminant. Exclusions in general – Superfund sites, RCRA sites, sites under federal jurisdiction
How does reuse happen?
I want to buy your Superfund site!
R4 Prospective Purchaser Inquiry (PPI) Response Team
Purpose: service that offers the prospective purchaser (PP) fast, accurate, and comprehensive information to enable the PP to make a timely business decision on whether to purchase or not.
Advantages: • encourages revitalization because PPs get information on the 4 contamination issues critical to successful revitalization • PP’s have a site-specific EPA team to ask for help • PPs get access to all of EPA’s revitalization tools • creates informed PPs that don’t impede cleanup or exacerbate conditions
4 Issues Critical to a Successful Revitalization Project:
(1) Site status and future anticipated actions, including post-removal site controls Compatibility of proposed redevelopment with cleanup and institutional controls Liability issues Lien issues – Superfund lien and Windfall lien issues be resolved?
(2)
(3) (4)
4 Issues Critical to a Successful Revitalization Project:
(1) Site status and future anticipated actions, including post-removal site controls Compatibility of proposed redevelopment with cleanup and institutional controls Liability issues Lien issues – Superfund lien and Windfall lien issues be resolved? • both liens are negotiable
(2)
(3) (4)
Direct Benefits of Reuse to YOU
•BFPP may conduct, finish, enhance, or maintain cleanup •BFPP won’t impede or interfere with cleanup •BFPP is obligated to be cooperative -> access & ICs •Thanks of a grateful nation -> removes blight, brings jobs, tax base increased, property value increases •For every acre of contaminated property that is redeveloped, 4.5 acres of greenspace is preserved
“So You Want to Buy a Superfund Site?”
US EPA, Region 4 EPA is dedicated to facilitating the redevelopment of contaminated properties and has the tools, initiatives and protections available to help the public reuse these properties. This is a great way to protect the environment....for every acre of contaminated property that is developed, 4.5 acres of greenfields are preserved.
Initial Steps for the Public When Redeveloping a Superfund Site: First, any prospective purchaser of a Superfund site should educate themselves about the Brownfield Amendment liability provisions (the BFPP and Windfall Lien provisions) before purchasing a Superfund site. Second, the prospective purchaser should contact EPA and the state about the site. In Region 4, the Brownfield and Land Revitalization Legal Coordinator is Kathleen (Kat) West, at (404) 562957. The Superfund Revitalization Initiative Coordinator is Bill Denman, at (404) 562-8939. Region 4 staff can answer questions about liability protection, cleanup status, compatibility of your proposed redevelopment with EPA’s cleanup and property restrictions, and other redevelopment tools. Four Issues EPA has Identified as Crucial to the Successful Redevelopment of Superfund Sites: (1) (2) What is the current status of EPA’s cleanup and what are the future anticipated actions? Is the proposed redevelopment compatible with EPA's cleanup and with the existing and potential institutional controls? Does the prospective purchaser understand the applicable federal landowner liability protections? How will Region 4 settle or resolve any Section 107(l) Superfund liens or Section 107(r) Windfall liens?
(3)
(4)
Liability Protection and the Brownfield Amendments: On January 11, 2002, President Bush signed into law the Small Business Relief and Liability and Brownfields Revitalization Act, otherwise known as the “Brownfield Amendments”. The term “Brownfield Amendments” for the new law is a bit of a misnomer because the Brownfield Amendments address important incentives to redevelop brownfield properties and Superfund sites. For example, one of the incentives provided for brownfield properties are competitive grants for assessment and/or cleanup. One thing to note is that a property undergoing a federal response cleanup (either Superfund or RCRA) usually does not fall under the definition of a brownfield property and is not eligible for brownfield grant money.
In a Nutshell: Superfund Liability - The Brownfield Amendments include several provisions that address purchasers and Superfund liability. One of those is the Bona Fide Prospective Purchaser provision:
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Bona Fide Prospective Purchasers (BFPP)
This provision states that a purchaser who acquires a Superfund site after January 11, 2002 and who complies with eight criteria will not incur Superfund liability as an owner of the property. A person who attains and maintains this status is known as a BFPP. The eight criteria are as follows:
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all disposal of hazardous substances occurred before acquisition the person made all appropriate inquiries about the property before acquisition the person provided all legally required notices with respect to discovery or release of any hazardous substances at facility the person exercises appropriate care with respect to hazardous substances found at the facility by stopping and preventing releases the person provides full cooperation and access to EPA the person complies with land restrictions in connection with the response action and does not impede the effectiveness of an institutional control the person complies with requests for information and subpoenas the person is not affiliated with a PRP
This provision is intended to be self-implementing by the purchaser with little involvement from EPA. The prospective purchaser is responsible for attaining and maintaining BFPP status for as long as potential liability exists. However, EPA will issue a status/comfort letter telling the purchaser what EPA believes is appropriate care with respect to hazardous substances (this is called a “Reasonable Steps” comfort letter). *See EPA guidance - Interim Guidance Regarding Criteria Landowners Must Meet in Order to Qualify for Bona Fide Prospective Purchaser, Contiguous Property Owner, or Innocent Landowner Limitations on CERCLA Liability (“Common Elements guidance”) issued March 6, 2003, which can be found on EPA’s website at: www.epa.gov/compliance/resources/policies/cleanup/superfund/common-elem-guide.pdf
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So What is “All Appropriate Inquiry” and “Appropriate Care”?
All Appropriate Inquiry: The purpose of this criteria is to encourage knowledgeable buyers who will have the necessary information to respond appropriately to potential releases of 2
hazardous substances on their property. This criteria mandates that all purchasers appropriately inquire into the history of the property and understand the environmental conditions. At present, EPA is finalizing the Final Rule which will set forth the standards of All Appropriate Inquiry; however the Brownfield Amendments state that the Final Rule standards must include the following: inquiry by an environmental professional (Phase I), value of the property as if it was not contaminated, interviews with past and present owners of the property, visual inspection of the property, etc. Appropriate Care: The purpose of this criteria is to encourage the purchaser to respond responsibly to any release or threatened release of hazardous substances at the Superfund site. On March 6, 2003, EPA issued guidance, called for short the ‘Common Elements’ guidance, which sets forth some parameters that EPA feels are appropriate reasonable steps a purchaser must take to fulfill this criteria and maintain BFPP status. The reasonable steps appropriate at any given site are of course are very site specific. EPA does not expect a purchaser to undertake a full cleanup, but does expect a purchaser to exercise due care if there is a release of hazardous substances. EPA may issue a comfort letter telling the purchaser what EPA believes is appropriate care with respect to hazardous substances (this is called a “Reasonable Steps” Comfort Letter).
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I Have Heard About Windfall Liens, What Are They?
The Brownfield Amendments contain a provision called the Windfall Lien provision. This provision states that EPA has the authority to put a lien, called a Windfall Lien, on the property of a BFPP (person who complied with the eight criteria above). On July 16, 3003, EPA issued guidance called ‘Interim Enforcement Discretion Policy Concerning “Windfall Liens” Under Section 107(r) of CERCLA’. The purpose of the Windfall Lien is to prevent a developer from profiting unduly from a taxpayer cleanup. In other words, if EPA has outstanding response costs and will substantially increase the fair market value of a Superfund site because of its cleanup of the site, then EPA will evaluate whether the purchaser would unfairly be pocketing that increase in value. If so, and if it is appropriate according to EPA’s “Windfall Lien” guidance, then EPA will offer to settle the value of the windfall amount or perfect a Windfall Lien on the property for that amount. EPA will also issue a comfort letter (called the “Windfall Lien” Comfort Letter) that states whether EPA intends or does not intend to perfect a Windfall Lien on a particular Superfund site. Example: say EPA is spending $1 million to clean up a fund-lead site and during the cleanup a developer approaches EPA and says that they want to become a BFPP. EPA would respond that they should comply with the eight statutory criteria before purchasing the property to avoid Superfund liability and that there is the potential that EPA may place a Windfall Lien on the property. EPA may determine that perfecting a Windfall Lien is appropriate IF: (1) EPA has outstanding response costs, (2) the difference between the purchase price and the appraised “as clean” price is substantially different and that difference is attributable to EPA’s future 3
cleanup. Generally, if the property is already cleaned up or if the property will be used for a public purpose EPA will determine that perfecting a Windfall Lien is not appropriate. *See EPA guidance - Interim Enforcement Discretion Policy Concerning Windfall Liens Under Section 107(r) of CERCLA (“Windfall Lien guidance”) issued on July 16, 2003, which can be found on EPA’s website at: www.epa.gov/compliance/resources/policies/cleanup/superfund/interim-windfall-lien.pdf So What are Brownfields? Brownfields are real property, the expansion, redevelopment, or reuse of which may be complicated by the presence or potential presence of a hazardous substance, pollutant, or contaminant; but brownfields do not include Superfund sites and some other excluded sites. The states usually take the lead on assisting prospective purchasers of brownfields clean up the brownfield site through the state voluntary cleanup program. EPA offers a competitive grant program whereby the public can apply to receive grant money for the assessment and/or cleanup of brownfield properties. There is a deadline once a year to apply for these grants. The public should contact the EPA Region 4 Brownfield office for more information on grants: www.epa.gov/region4/waste/bf/index.htm. Initial Steps for the Public When Redeveloping a Brownfield Site: First, any prospective purchaser of a brownfield site should educate themselves about the state brownfield or voluntary cleanup program before purchasing the brownfield site. Second, the prospective purchaser should contact the state to identify the status of the site if available, and to obtain information about the voluntary cleanup program and liability protection available through that program.
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