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FEATURE ARTICLE, OCTOBER 2004
PRIVATIZED CLEANUPS: REDEVELOP WITHOUT
DELAY
Developers in some states can benefit from new privatization
programs that expedite state-mandated cleanups.
Russell Fitzpatrick and James B. O’Brien
Over the past decade, much has been made of the brownfield
concept — that of redeveloping former industrial properties,
either with or without the incentive of tax benefits or municipal
grants. In the Northeast, this concept continues to grow in
interest due to the increasing cost of real estate, the prime
location of former industrial properties, and their availability.
These factors, combined with the better definition of environmental
regulations and risk assessment parameters, have enabled many
transactions to occur. As an added incentive to redevelop
brownfields in the Northeast, several states have privatized,
to varying degrees, the actual cleanup process.
Historically, environmental remediation has followed an undefined
process that was filled with uncertainty. This process involved
negotiating with individuals within state agencies at every
step of the process and waiting long periods of time for understaffed
agencies, hoping for the ever-elusive No Further Action (NFA)
letter. The NFA letter is an agency’s determination that
remediation is complete; it is essential prior to purchase
or redevelopment.
From preparing a work plan, to resolving the state’s
comments on the work plans, writing and rewriting reports,
and agonizing over the best remedial technology — the
process has not been the smoothest way to redevelopment. Additionally,
the process has severely limited the economics of redeveloping
former industrial sites. Imagine being in the middle of an
extensive excavation for a new residential complex and encountering
unknown soil contamination. Construction would immediately
halt, and the project could be delayed while waiting for the
state to review the work plan and the cleanup plan.
Though initially conceived as a way to more effectively allocate
slim governmental resources, the privatization of the investigation
and cleanup process has been a major contributor to the success
of many redevelopment projects in the Northeast. In fact,
the key to a successful brownfield redevelopment process is
often the successful integration of environmental remediation
and construction — not just coordination, but true integration.
In practice, this involves working with design engineers,
developers, architects, contractors, construction managers,
environmental professionals, lawyers and often the lenders.
Privatization of the cleanup process provides the key to success.
In the Northeast, privatization programs are underway in New
Jersey, Connecticut, and Massachusetts. In all instances,
the programs establish a form of certification for a private
consultant — the Cleanup Star in New Jersey, the Licensed
Environmental Professional (LEP) in Connecticut, and the Licensed
Site Professional (LSP) in Massachusetts. While the authority
given to the certified professional varies state by state,
one thing is common: the state’s vigorous procedures
for ensuring that private consultants perform activities in
a manner consistent with the state’s philosophies. Credentials
required to obtain certification are intense, as is the exam.
Ethics regulations and a robust audit program further ensure
reliability of the program.
In New Jersey, the Cleanup Star is limited to investigating
and performing remedial measures on sites with no groundwater
contamination. Keeping the regulators themselves out of a
simple soil removal and disposal project will vastly minimize
potential construction delays. In Connecticut, LEPs can oversee
remediation in various areas, often depending on the groundwater
classification of the area.
In Massachusetts, the LSP program allows state-licensed private
consultants to effectively investigate, remediate, and bring
sites to closure with few exceptions. The Massachusetts version
of the NFA is the Response Action Outcome (RAO), and LSPs
can now provide RAOs. LSPs can determine the suitability of
a site for redevelopment in the initial development stages
based on the knowledge of what form of remediation, including
institutional controls and/or deed restrictions, will be appropriate,
acceptable and legal. In Massachusetts, LSPs are allowed to
close sites with soil and groundwater impacts.
Many Massachusetts sites have been redeveloped with LSPs,
where a true team is created between the developer and the
environmental consultant. Not that cooperative teams cannot
be developed with regulators, but this privatization approach
removes the step-by-step requirement for a state agency to
review and comment upon a project, often causing delays. At
the initial due diligence stages of a redevelopment project,
an LSP can discuss with a developer what type of remedial
measures may be necessary and exactly what can be done to
achieve closure. In most cases, there is no outside third-party
approval required. More importantly, the LSP is enabled to
react quickly during a redevelopment project, when existing
conditions frequently change. Typically there is no need for
a delay to obtain state approval of a change in the remedial
plan.
Brownfield redevelopment projects have been talked about for
years. While the concept of cleaning up and again utilizing
a contaminated property is exciting stuff, the often extensive
regulatory requirements and the bureaucratic methods of the
Remedial Investigation/Feasibility Study (RI/FS) process do
nothing to overcome the stigma of a property or to maximize
the economics of such a project. In forward-thinking states
like Massachusetts, Connecticut and New Jersey, the privatization
of remediation may be the best thing yet for brownfields.
Russell Fitzpatrick and James B. O’Brien are Licensed
Site Professionals with Vertex Engineering Services Inc.
©2004 France Publications, Inc. Duplication
or reproduction of this article not permitted without authorization
from France Publications, Inc. For information on reprints
of this article contact Barbara
Sherer at (630) 554-6054.
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