Ned Abelson is reserving his judgment of the state’s proposed changes to regulations for the cleanup of contaminated commercial property until after the Department of Environmental Protection decides whether it will incorporate the public’s comments into its proposal.
Abelson, an environmental lawyer with Goulston & Storrs in Boston, chairs the local National Association of Industrial and Office Properties (NAIOP) committee that’s been reviewing the proposed regulation amendments. He was instrumental in helping craft the industry lobbying group’s comment letter responding to the proposals.
“We don’t know what [MassDEP] will do with the comments they get,” said Abelson, who specializes in brownfields cleanups and development. “If they say, great, we’ll use them, then they could be really good regs. But when you get deeper into the current proposals there are potentially very problematic details.”
MassDEP is proposing significant amendments to the Massachusetts Contingency Plan (MCP), which lays out standards for notification, assessment and remediation of disposal sites resulting from the release of oil or other hazardous materials to the environment. In particular, the regs govern the response to and cleanup of brownfields sites, properties contaminated by past use as industrial or commercial facilities.
One of those proposals is eliminating the tier-based classification and permitting system. Currently, when a release of oil or hazardous material is discovered, it must be “classified” as Tier IA, IB, IC or Tier II, and permitted for cleanup if not addressed within a year of notification, according to Margaret Stolfa, an environmental attorney with Bernkopf Goodman, who has closely studied the proposed regulatory changes.
Instead, the focus would be on sites that typically pose the most significant risk, like impacts to water, indoor air quality, high contaminant levels or uncontrolled exposures, Stolfa wrote in an email. Sites would either be classified Tier I for the highest risks, or Tier II for lower risks, and there would be no permits.
In addition to the time and expense spent filing for the permit, eliminating this requirement would do away with a $3,550 Tier I permit fee, according to Joseph Ferson, a spokesperson for MassDEP. Over time, MassDEP has deemed the permit unnecessary because the agency retains the ability to require review and approval of any work performed under the MCP, regardless of a site’s classification, Ferson wrote.
However, although MassDEP is proposing eliminating the Tier I permits, the agency will require new permits for sites cleaned up and closed out with a “permanent solution with conditions” or a “temporary solution” designation, indicating there are continuing issues that need to be addressed, according to Bernkopf Goodman’s Stolfa, who spent eight years as DEP general counsel and helped create the state’s Brownfields Act, which incentivizes investors to clean up and redevelop contaminated land. So in reality, more permits could be required for some sites.
“There’s a lot of good stuff in there as far as streamlining and reducing some uncertainty people have about when they’ve actually achieved a permanent solution,” Stolfa offered. “But comments will be along the lines of ‘devil in the details.’”
Another proposed amendment would affect when a source of contamination has been eliminated or controlled, a requirement for the closing out of brownfields sites. According to NAIOP’s comment letter to DEP, proposed changes in this area would prevent many sites from reaching either a temporary or permanent solution.
The proposed changes could also expand what’s actually considered a source of contamination, said Goulston & Storrs’ Abelson. Currently, contaminated groundwater is not technically considered a source for site contamination, compared with gaseous vapors that are a source.
Difficult To Clean Up
However, the current proposal’s language could mean groundwater will be considered a source of contamination, adding another layer of cleanup for developers, Abelson told Banker & Tradesman. And if contaminated groundwater is considered a source, it may be very difficult to eliminate, and then the property owner cannot close out the site from cleanup. If they can’t close it out, they have to keep spending time and money to finish the job.
“So the private sector says, why are you changing it? What’s wrong with the existing language?” Abelson added. “If you’re looking at buying a brownfields site to redevelop or finance or lease, this makes the process that much longer, harder and more expensive.”
There’s good reason for the DEP to enact these regulatory changes – in a name, budget cuts. MassDEP’s budget has been significantly reduced, dropping to $46 million in fiscal year 2011 from a high of $62 million in 2002, according to the agency’s website. Staffing has been cut as a result, with 840 full-timers there today compared with the 1,200 full-time staff in 2002. Yet, the website states, the agency’s responsibilities have increased rather than contracted, and “its resources are now out of alignment with its responsibilities.”
With fewer dedicated staff to review reports and permit requests, the agency’s hand is being forced to reform its regulations. Hence the elimination of permits and other paperwork involved with brownfields cleanups.
But there’s more to it than just streamlining in the wake of budget cuts. The state is attempting to provide predictability in the process, which on the surface is “a highly risky venture to be involved in sites that have hazardous waste,” said David Begelfer, executive director of NAIOP in Mass.
When those sites can be redeveloped into successful projects, it’s a win for the environment that gets cleaned up, a win for the community because it gets another tax-paying property, and a win for the developer “who obviously gets a property that’s well located and with good potential for economic growth,” Begelfer said.
“If the process is [an impediment], the developers go to ‘greenfields,’ if you will, undeveloped sites, and pass over the well-located urban sites,” he added. “DEP … wants a system that works. There’s room for negotiation. Everyone wants to have a developer move forward on these cleanup projects.”
DEP has already told some in the commercial real estate world they are looking forward to the industry’s comments because there are some parts of the proposals that have not been fully thought through, according to Anatoly Darov, an attorney in the design and construction practice group with Burns & Levinson.
“The general vibe is, we have to be careful how we tweak some of these definitions because they could have unintended consequences that are detrimental and don’t improve environmental protection,” Darov said.
Email: jcronin@thewarrengroup.com
