RE: [CPEO-BIF] All Appropriate Inquity rulemaking report

[Emery Graham <egraham@ci.wilmington.de.us>]

I had thoughts of responding using the contemporary imagery of the arguments against "affirmative action,"i.e., using public resources to advance one set of private interests against another. However I've decided to simply point out that the democratic imperative of public participation brings out what seems to be an inherent conflict between "localized private" and "localized public" interests in matters of developing "local contaminated" land. In the final analysis all development occurs in a "local" environment and no investor will risk antagonizing local market interests less they doom their enterprise to failure. Unaccounted for actions by the local community can absolutely destroy the validity of a project pro forma based on unrealistic assumptions about the local community. I really appreciate your comments and look forward to hearing the thoughts of our colleagues.

Emery

-----Original Message-----
From: kkamlet@hotmail.com [mailto:kkamlet@hotmail.com] 
Sent: Wednesday, July 02, 2003 4:31 PM
To: cpeo-brownfields
Subject: Re: [CPEO-BIF] All Appropriate Inquity rulemaking report

I feel the need to respond to Emery Graham's comments regarding the update 
by Lenny Siegel and Bob Hersh on the status of the "all appropriate inquiry" 
negotiated rulemaking.  I do so, not only as an environmental lawyer and 
from the vantage point of my firm, which has converted a number of unsightly 
and environmentally unfriendly brownfield sites into clean and productive 
shopping centers in the Southern Tier of New York, but also from the 
standpoint of a long-term public interest environmental advocate who sees 
brownfields redevelopment as a win-win proposition for both economic 
development and the environment.

1. Mr. Graham begins with the erroneous premise that developers are stomping 
at the bit to develop brownfield sites and that, in return for this 
privilege (and the grant of certain liability limitations), they should be 
willing to go to the considerable extra time, effort, and expense necessary 
to gather data and share it with neighborhood residents.  In fact, for the 
most part, developers want to have nothing to do with brownfield sites and 
require little prodding to head for the nearest "greenfield."  Liability 
relief is not a gratuitous reward for which a quid pro quo must be 
extracted, but a recognition that brownfields redevelopment must be 
incentivized for the benefit of both the environment and the economy.

2. In passing Brownfields amendments in late 2001, Congress was endorsing 
this view of the public interest.  It never contemplated that EPA would be 
forming a negotiated rulemaking committee that would recast the appropriate 
public interest balance.

3. Mr. Graham is correct that "the market for urban contaminated property is 
already inefficient."  In fact, it is inefficient to the point of being 
virtually non-existent.  This inefficiency will persist as long as the 
potential environmental liability associated with the property exceeds the 
anticipated return on investment.  While it is true that the perceived 
environmental liability sometimes exceeds the actual environmental liability 
as a result of insufficient information about the nature and extent of 
contamination, the solution to this problem is not endless data gathering 
and public participation.  The solution is a streamlined investigation and 
cleanup program that yields enough information and action to reasonably 
assure protection of public health and the environment.  Piling on excessive 
procedures in a vain quest for Garden of Eden pristineness will serve only 
to shift the risk-benefit balance into the realm of non-viability.

4. The primary thrust of the federal Brownfields program is to maximize the 
use of private resources in promoting the beneficial reuse of brownfield 
sites--not to increase governmental or public involvement in private 
investment and development decisions.  Where government is involved, it is 
primarily to provide financial incentives and reduce regulatory 
disincentives--while guarding against adverse impacts to public health and 
the environment.  EPA and Congress have recognized (although Mr. Graham 
evidently does not) that promoting private investment in brownfield sites is 
the best way to get them cleaned up.

5. On the issue (Issue #1) of defining an "environmental professional," the 
extreme position taken by New York State illustrates the problem of limiting 
this designation to those with an "official" license.  New York requires 
certain Brownfields certifications to be made, and reports submitted, only 
by state-licensed professional engineers--because engineers are the only 
relevant environmental professionals currently licensed by New York State.  
Not only does this deprive the would-be brownfields redeveloper of his/her 
preferred choice of environmental professional, but it deprives the state 
environmental agency of the expertise of numerous other highly relevant 
environmental disciplines, such as hydrogeology, toxicology, biochemistry, 
and other environmental sciences.  If the environmental professional fails 
to perform to the requisite level of competence, the state environmental 
agency doesn't need the threat of license revocation to very quickly 
identify substandard performers.  The development community will learn 
quickly not to rely on consultants who lack credibility with the 
environmental agency and who are unable to obtain expeditious agency 
sign-offs.  There are many alternatives to state licensing.  They include: 
licenses and certifications by recognized professional associations; 
advanced educational degrees; training and experience in relevant 
disciplines that evidence knowledge and competence.  If necessary, the state 
environmental agency could issue a Request for Qualifications and assemble a 
list of "approved" environmental professionals.  Attempting to formalize the 
requirements excessively not only stifles the free operation of the 
marketplace, but is likely to be environmentally counter-productive.

6. On the issue (Issue #2) of the need to supplement the current ASTM Phase 
I standard with a requirement to interview neighbors near or adjacent to a 
potentially contaminated site, I agree with the concern that such a 
requirement could jeopardize efforts by developers to assemble necessary 
land parcels by inflating the price demanded for key parcels.  The idea of 
linking interviews of neighbors to specific objectives as a way to fill key 
data gaps seems sensible and appropriate.  Mr. Graham attempts to transform 
the need, recognized by ASTM, to gather enough information about the site to 
draw intelligent conclusions about the likely presence of "recognized 
environmental conditions" justifying or compelling the conduct of Phase II 
studies, into a broad public participation requirement.  Why must 
prospective developers who are (usually) innocent of any connection to the 
contamination present on a brownfield site have to bargain for "immunity 
from prosecution" (on what grounds?) by being forced to identify the actual 
polluters and get involved in a survey of the entire neighborhood?

7. On the issue (Issue #3) of how far the Phase I analysis must go to 
"prove" the site is clean, I think we need to remember that the purpose of 
the ASTM Phase I standard, and of the "all appropriate inquiry" requirement 
it was seeking to interpret, was NOT to conclusively demonstrate the absence 
of contamination, but merely to demonstrate that the prospective purchaser 
was justified in not regarding the property as contaminated.  (As a member 
of the drafting task force that developed the ASTM Phase I standard, I can 
say with some authority that a great deal of time and attention, and debate, 
were devoted to this issue.)  Some data gaps are inevitable at some sites.  
If there is no hint of contamination or of hazardous substance handling 
activities, why should the environmental professional have to keep looking 
until the data gaps are closed?  One can satisfy the "all appropriate 
inquiry" standard without necessarily satisfying a state environmental 
agency's site investigation requirements for purposes of receiving a 
liability release and covenant not to sue.  Applying the "precautionary 
principle" (guilty until proven innocent) as advocated by Mr. Graham would 
only serve to ensure that sites with hidden contamination do not get 
redeveloped and, therefore, remain contaminated.

8. On the last issue (Issue #4), whether the benefits of the Phase I process 
should be withheld if the original assessment is inconclusive, necessitating 
actual sampling normally reserved for Phase II, I would remind people of one 
of the main factors in the genesis of the ASTM Phase I standard.  Federal 
prosecutors were denying developers the benefits of the "innocent landowner" 
defense in every instance.  If contamination (or hazardous substance 
handling) was found, the purchaser could not claim to have "no reason to 
know" of the existence of the contamination.  If contamination was not found 
during the investigation, but cropped up after the property changed hands, 
the fact that contamination was present was taken as evidence that 
sufficient inquiry had not been made and that the purchaser should have had 
reason to know that contamination was present.  It was the classic "Catch 
22."  That's why the Phase I standard set up an objective set of information 
gathering activites to document the conduct of "all appropriate inquiry."  
The existence of data gaps, despite diligent inquiry, is not a sufficient 
reason to require MORE THAN appropriate inquiry.  The interests of the 
public are protected because granting liability relief to the innocent 
purchaser doesn't let those who caused or contributed to the contamination 
off the hook.  After an innocent purchaser has done all that is appropriate, 
anything more that is required should be exacted from responsible parties.  
Again, Mr. Graham misses the point.  He asks "How much is liability relief 
worth?"  To someone who has no legal responsibility for the contamination, 
very little.  If the cost of being excused for someone else's polluting 
activities is too high, the prospective redeveloper will simply go 
elsewhere.

I look forward to hearing the views of other members of this Discussion 
Group.

Ken Kamlet

-----------------------------------
    Kenneth S. Kamlet, Esquire
    Director of Legal Affairs
    Newman Development Grp., L.L.C.
    3101 Shippers Road, P.O. Box 678
    Vestal, New York 13851-0678
    607-770-1010, FAX: 607-770-3482
    kkamlet@hotmail.com



>From: CPEO Moderator <cpeo@cpeo.org>
>Reply-To: cpeo@cpeo.org
>To: cpeo-brownfields@igc.topica.com
>Subject: Re: [CPEO-BIF] All Appropriate Inquity rulemaking report
>Date: Wed, 02 Jul 2003 13:21:55 -0400
>>
>The following response was posted by Emery Graham
><EGRAHAM@ci.wilmington.de.us>
>_________________________________________________________________________
>
>  Lenny,
>
>  The new law posed a proposition to those interested in developing
>  brownfield sites, i.e., if you want relief from certain liabilities
>  associated with your desire to develop this site you must carry out
>  certain activities. Without prior consideration or assessment of the
>  cost of those activities,including information gathering activities,
>  the Congress stated what had to be done to get liability relief.
>
>  * ********************* [rest of message deleted in the interest of 
>space].
>
>  Emery
>

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