Brownfields Presentation
by Chuck Wolfe of Foster Pepper and Shefelman PLLC
to the students of Christine Bae on November 15, 2001.

Introduction

The term brownfield, despite its meaning as a polluted or already used lot of land with challenging features or difficulties for future developers, in recent years has become a positive term. Brownfields incorporate many of the legal liability issues that came about in a previous time with new views on land use. Today brownfield has become a good word and represents how to use that property in a good way. Things have changed so much in a short period.

The emergence of our views on brownfields are shaped to some extent by the creation of Superfund legislation. The idea was that Congress would create a massive fund (Superfund) that would be funded by federal to assist in cleaning up polluted industrial sites. Money would be made available for acquisition of property if the EPA were required to go in and clean up a polluted site. The funding would enable the federal government and the president to act effectively. The Superfund legislation grew from a situation in the late 70s and early 80s concerning industrial sites in the U.S. One of the most visible site came to be Love Canal, where a chemical company had covered a lot up and left a lot of hazardous material behind.

Fifteen years later, in 1995, the president of the Environmental Law Institute wrote an editorial for the 25-year anniversary of environmental law and posed the question: what was Love Canal? He described it eloquently as a “massive failure of institutional control.” We might use this same description to portray the fate of brownfields. The emergence of brownfields also represent cases where there has been a “massive failure of institutional control”. The use of brownfields involves such issues as requiring the laying of an impermeable layer like concrete, and thereby introducing a new institutional control, in order to reuse urban land.

In the post-1995 years, a magazine devoted to brownfields began to be published under the title of Brownfield News (it may have failed since). As an indication of popular culture, the emergence of such a magazine dedicated to brownfields emphasizes how the use of brownfields can dovetail with many of the goals of growth management. This goal to dovetail existing conditions with anti-sprawl measures lies at the heart of Washington’s GMA and other states’ growth management experiences. Attention to the reuse of brownfields has thus come to be seen as one of the solutions in growth management.

Washington State’s MTCA

Washington’s State’s liability scheme for brownfields is based on the Superfund, and is called the Model
Toxics Control Act (RCW 70.105D) or MTCA. It was passed in 1989 and to some degree overlaps with EPA’s authority. In Washington State it is the Dept. of Ecology that administers MTCA. What’s the key difference between MTCA and Superfund? MTCA defines petroleum contamination as a hazardous substance (reaches one more chemical product than Superfund); every gas station is a potential superfund site! MTCA has enabled one of the most voluntary cleanup programs in the country. The old command-and-control model has been replaced by a voluntary clean-up effort.

The classic liability model assumes that you have a “release or threat to release” of a hazardous substance (closely defined in regulation). There is also an entire set of corollary principles. Anyone who has operated on the property may be “jointly” liable. (Example is that the tenant is responsible as an operator, and the landowner may also be liable.) Once release has occurred, both are responsible. There are regulatory standards, and some small indexground levels of contaminants are permitted. There are state and federal regulations that tell you when you are in trouble.

In the example of brownfields, as opposed to the earlier command-and-control situation, a new investor comes in and hires a consultant in order to conduct a proper site assessment. The site assessment has become a well-honed process today. What constitutes a proper site assessment? For example, there may be archeological/tribal issues too. The general notion is that consultants come in and categorize the conditions of the property. There is then an “institutionalized” approach: a feasibility study (selection of approaches that are practical under the circumstances, includes a cost-benefit analysis) is first conducted; then a remedial investigation (RI) is conducted in order to find out what’s there and needs to be done.

The approach takes into consideration the permitting associated with the cleanup, and also ongoing maintenance (monitoring wells) in order to ensure that the cleanup has been effective in future.

The Brownfield Mantra

What’s changed (indeed it can be considered to be a “groundswell of reform”) concerning this approach? There was a lack of experience during the early 1980s, and the cleanup standards were rigorous, but there was not much contextual analysis. Regulations didn’t consider the future purpose of land (this site will remain paved over, or remain an industrial site). A higher level of confidence in science emerged at the same time. We can think now in terms of the “Brownfield Mantra.”

“No longer shall we be burdened by past, foolish determinism which treated all sites alike and defined cleanups based on a regular diet of dirt”.

By taking into account the fact that some solutions are appropriate for some areas, but not for others, increasing flexibility in the regulatory toolbox permitted new modifications of the previous regulations. The old tools began to be reshaped from command-and-control for use in the brownfield context: one of the new tools was the Consent Decree.

The Consent Decree is an agreement between EPA and the Dept. of Ecology, or EPA and the cleanup party. The idea was, and is, that a Consent Decree will be entered into before the remediation process begins. People realized that if you were trying to stimulate the real estate market that you have to give them some confidence before the federal or state government won’t come index and sue them.

That whole approach was further institutionalized in the form of a device called the “Prospective Purchaser Agreement”. It allows people to explore their options and for the prospective buyers to know their obligations in advance. The mechanism is a little complex, but it shows the evolution of an old tool.

At the same time, there are new products in the insurance industry. If you go into one of these plans, you can also buy an insurance policy.

Ties to Growth Management

Throughout the 1990s in Washington State, there has been a large number of new and different techniques sought to apply brownfield development to growth management initiatives. Industrial cleanup standards have come to have direct ties to the Growth Management Act. For example, comprehensive plans have become very important in evaluating sites, and this “contextual approach” to clean-up appears to be becoming more and more widespread.

Other developments reflect attempts to improve Growth Management through the effective use of brownfields. Permit exemption, for example, can be issued if a cleanup is conducted of a brownfield site along Lake Washington and a treatment system is installed. Other shoreline exemptions can be given to sites over which the Growth Management Act ordinarily takes precedence. Consent Decrees mean that there are a lot of local permits you don’t have to get in the case of brownfield development.

The issuance of a “No Further Action” letter is one example of compensation made by Washington State in return for brownfield development.

Role of Standards

The American Society of the Testing of Materials (ASTM) has assisted directly in defining standards that delineate how brownfield sites should look. This approach of applying standards reflects current trends. The fact that a guide exists on sustainable brownfield development speaks volumes: brownfield development is something that’s now very widely accepted. ASTM tells developers what they have to do: how to model property as a whole, look at its life cycle, think of ways to streamline process, and figure out how to involve the public.

Despite all these developments, there are still problems. Brownfield paralysis is one example. This problem stems from the fact that you can pre-negotiate problems, but that there is still a provision that the EPA or Washington State Department of Ecology can come index and make readjustments. This has killed some deals. Michigan and New Jersey have gotten a little further concerning this type of liability. There used to be a Brownfield bill in the Senate, but it has not been finalized. This new bill would reject the old command-and-control principle that the polluter must pay and would support investor-incentives to create some public good. There are other downsides. Some local city developers have become a little reckless and forgotten about some of the liability issues.

The planner has a role similar to that of a consultant. You need to know what the market’s going to think. A return on investment is needed for most players. Other issues are quite complicated. When one has a wetland that happens to be contaminated, and there are endangered species issues, it’s a very exciting and complicated sphere of the law.

In summary, the story of brownfield development parallels closely the story of how command-and-control became transformed and evolved alongside of the evolution of land use laws that have brought us Growth Management, Smart Growth, and other land use laws.

See Mr. Wolfe’s presentation slides at http://courses.washington.edu/gmforum/private/10/topics/APALAW.ppt

More information is also available from Mr. Wolfe’s article "Turning Brownfields Green is a Team Effort."

Prepared by Nat Trumbull