2010 CPEO Brownfields List Archive

From: "Trilling, Barry" <BTrilling@wiggin.com>
Date: Thu, 25 Feb 2010 13:18:04 -0800 (PST)
Reply: cpeo-brownfields
Subject: Re: [CPEO-BIF] [Fwd: EPA's March 17 listening session is an opportunity] from Larry Schnapf
 
Larry defines the problem, apparently as he sees it with AAI,  as a failure to require information to be disclosed  that "allows the bad people to gain advantage over the people of good faith," and goes on to compare the situation with a car manufacturer's duty to disclose defects to purchasers, UCC express and implied protections, and SEC disclosure obligations. Regrettably, his "disclosure" solution doesn't reach the bad people and provides a disincentive for the people of good faith to attempt to meet an important social, economic, and environmental problem.

AAI requires the person of good faith to make efforts to discover environmental problems.  The 2002 CERCLA amendments also require the  bona fide purchaser to take reasonable steps to address the problems it discovers.  It provides no shield for either the bona fide purchaser or the property owner if either attempts to conceal public endangerments.  Larry, however, would apparently impose an affirmative duty on any property owner who becomes aware of a release or threatened release of a hazardous substance on his or her property, regardless of its gravity or imminence, and whether or not it is migrating or threatens to migrate off the property to make public disclosure of that knowledge and would also require the potential property purchaser to do so.  This is a recipe for a very bitter meal, providing even further incentive for the "bad people" to cover up and take no measures do discover their problems and making the ability of the people of good faith who want to remediate
  properties and bring them back to productive use almost impossible to achieve because of the potential for the process of cleanup and development to be taken out of their hands or made pragmatically or politically unachievable.  The analogies to protecting consumers from defective products and investors from fraudulent deals just do not apply.  Here the bona fide purchaser, rather than the community, stands in the shoes of the consumer or investor, and AAI requires it to take steps to protect itself.  The community stands to benefit when that BFP remediates the property to meet regulatory standards.  Drive  away that BFP and the likelihood of remediation dwindles, if it survives at all.  If the BFP fails to remediate, then stringent enforcement should be the consequence.   The problem, as I noted in my earlier message consists in the failure of agencies to undertake adequate enforcement and of the professional community to insist upon adequate site characterization.

As much as we want to protect the public from exposure to hazardous substances, we won't get there by ignoring the facts that get in the way of attractive and amusing, yet inappropriate and inaccurate analogies.

The issue is not that real property is a sacrosanct concept.  The issue is how best to protect the public by getting sites cleaned up most efficiently, safely, productively, and at the least cost to the public.  A system that encourages private sector entities to do so, as AAI does, makes more sense than one that will drive good faith volunteers away from the process.

Barry J. Trilling
 W I G G I N  A N D  D A N A


-----Original Message-----
From: brownfields-bounces@lists.cpeo.org [mailto:brownfields-bounces@lists.cpeo.org] On Behalf Of Lenny Siegel
Sent: Thursday, February 25, 2010 1:55 PM
To: Brownfields Internet Forum
Subject: Re: [CPEO-BIF] [Fwd: EPA's March 17 listening session is an opportunity] from Larry Schnapf

From: LSchnapf@aol.com

My dear friend Barry has such faith in his fellow human beings. We have
laws because people won't do the right thing. I would submit that sadly
the universe of people acting in good faith is extremely small. The
problem is not incompetent consultants (and there are many) but perhaps
because the owners, buyers and lenders don't want to pay for what it
would cost to do a good investigation.

But I believe the real problem continues to remain that the information
is not required to be disclosed in most cases. In fact, that allows the
bad people to gain advantage over the people of good faith that Barry so
passionately defends.

And my other question is what is so special about real estate that we
continue to have these archaic disclosure rules? Car manufacturers can't
force consumers to buy cars as is (except maybe Toyota--sorry couldn't
resist).The UCC contains all sorts of expressed and implied protections.
Public companies have vast disclosure obligations under SEC regulations.

We're no longer an agrarian society. It's a time our real estate rules
conform to the transparency expected in the 21st century--and that are
necessary to protect the public.


Lawrence P. Schnapf, Esq.
55 E.87th Street #8B
NY, NY 10128
212-756-2205 office
212-876-3189 home
203-263-5212 weekends
www,environmental-law.net

Trilling, Barry wrote:
> Lenny:
>
> I agree that this listening session will be valuable, if for no other
> reason than to try to continue to clear the air with regard to your
> insistence that the AAI Rule is part of the problem.  I'm afraid that
> you and Larry are using your considerable persuasive talents and access
> to decision makers to divert their attention from the real problems:
> first and foremost, is the failure of environmental agencies (primarily
> on the state level) to enforce the law against parties that are abusing
> the system.  Second, but also important, is the failure of the
> environmental professional and legal communities to convey the message
> to their clientele about the importance of strict adherence to both the
> rule and the ASTM E1527-05.  To impose additional new restraints on
> good-faith volunteers who need a more level playing field to address
> brownfield sites will discourage private cleanup activity and leave the
> burden on government to take remedial action.  This will result in more
> time-consuming, more expensive, less comprehensive, and less
> economically productive cleanup activity and will ill-serve the
> constituents you sincerely want to benefit.
>
> The AAI rule is not perfect-- my experience in its operation so far
> shows very inconsistent observance of its dictates.  Not surprisingly
> there are still so-called "environmental professionals" out there who do
> not appear to be meeting either the rule or the ASTM E1527-05 standard.
> EPA and professional organizations (both in the environmental
> engineering/consulting and legal communities) should be advising
> prospective purchasers about the importance of strict observance of the
> standards and the trade press should advise the community of developers
> and municipalities who rely on Phase I studies to beware of "on the
> cheap" assessments.  A good example of a bad result that I've seen on
> more than one occasion recently is that of the potential site purchaser
> who wants to be eligible for the bona fide purchaser defense hiring a
> low-cost consultant (perhaps at half the cost of a more conservative
> professional) to conduct a Phase I assessment that I've had to send back
> after legal review as insufficient.  The additional legal fees expended
> for my review and comment usually amount to substantially more than the
> potential purchaser would have paid for a first-rate Phase I.
> Penny-Wise/Pound Foolish.  And for those unwise enough to commission a
> budget assessment without legal review, the long term risk includes much
> more dire consequences, including exposure as a CERCLA PRP.  This is not
> a problem that changing the AAI rules will cure, however.
>
> I look forward to our discussions on March 17.
>
> Barry J. Trilling
>  W I G G I N  A N D  D A N A
>
>
> -----Original Message-----
> From: brownfields-bounces@lists.cpeo.org
> [mailto:brownfields-bounces@lists.cpeo.org] On Behalf Of Lenny Siegel
> Sent: Tuesday, February 23, 2010 11:24 AM
> To: Brownfields Internet Forum
> Subject: [CPEO-BIF] EPA's March 17 listening session is an opportunity
>
> U.S. EPA's "Listening Session" on the All Appropriate Inquiries (AAI)
> Rule, governing non-intrusive environmental site assessments, is three
> weeks away. (9:30 a.m. to noon on March 17, 2010 at room 1153 of the EPA
> East Building at 1201 Constitution Ave. NW, Washington D.C). I encourage
> participants in the Brownfields Internet Forum, as well as others, to
> attend: to engage in what I hope will be the first stage of a dialogue
> to improve the EPA Rule, which was published in the Federal Register on
> November 1, 2005.
>
> I was a member of the Negotiated Rulemaking Committee that developed the
> Rule, and I believe that it was a significant step forward. The
> performance-based approach that forms its core is a win-win solution
> that now helps to better identify potential environmental problems with
> only minimal increases in assessment costs.
>
> Nevertheless, except in states where there are additional statutory
> requirements, the AAI process remains unsatisfactory in terms of public
> notification that a site assessment is being undertaken, public
> involvement in the collection of information, and public disclosure of
> the results.
>
> It is my hope that those elements of the Rule can be improved, be it by
> revision of the rule, federal legislation, or state legislation and/or
> regulation. I recognize that many well-meaning participants in
> Brownfields redevelopment view such proposals as a threat to the entire
> Brownfields process, likely to kill deals that lead to additional
> environmental protection.
>
> I see the March 17 event as an opportunity to try to reach common
> ground, to bring the public into the process without "killing the goose
> that laid the golden egg."
>
> Before the Rule was finalized, I prepared a "A Stakeholder's Guide to
> 'All Appropriate Inquiries,'" available at
> http://www.cpeo.org/brownfields/SGAAI.pdf. It describes the rule and
> offers the following summary of my concerns:
>
> "Unless the Phase One is being conducted in compliance with another
> environmental program, there is no requirement to ask for public input,
> or even to notify the public that a site assessment is underway.
> Furthermore, while the parties conducting the Inquiries may conduct
> sampling to meet the assessment's performance objectives, sampling is
> not required.
>
> "These limitations are insignificant at most sites where there is no or
> little contamination. But at sites where it appears that human health
> and the environment are at serious risk, communities must demand that
> environmental regulatory agencies become actively involved.
>
> "The Brownfields concept, which uses the demand for property reuse to
> promote the screening and remediation of blighted properties, can
> promote the protection of human health and the environment. But unless
> affected communities participate directly in the oversight of
> Brownfields activities, they risk the likelihood that developers and
> local agencies will simply sweep environmental problems 'under the rug.'
> The ... All Appropriate Inquiries rule can be a tool to ensure that
> environmental protection accompanies property redevelopment, but this is
> more likely to happen if the public is part of the process."
>
> Lenny
>
> --
>
>
> Lenny Siegel
> Executive Director, Center for Public Environmental Oversight
> a project of the Pacific Studies Center
> 278-A Hope St., Mountain View, CA 94041
> Voice: 650/961-8918 or 650/969-1545
> Fax: 650/961-8918
> <lsiegel@cpeo.org>
> http://www.cpeo.org
>
>
>
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