6. Remediating Brownfields

Brownfield cleanup and redevelopment follow a unique set of processes that are not always linear.  

 

There are several paths to remediating a distressed property, the following are key components of the process:

 

There are a myriad of regulatory and legal considerations at the federal, state, and local levels for land recycling and brownfield redevelopment. Because state and federal statues are administered by a number of different regulatory agencies, it is important to understand these regulatory bodies. Establishing a strong working relationship with regulators and maintaining open communication throughout the redevelopment process is key for a successful project. It is highly beneficial to obtain appropriate legal advice and guidance early in the planning process to develop an effective strategy for enhancing cost effectiveness and minimizing project risks.


Evaluating a site for potential contamination is an important first step in approaching a brownfield redevelopment project. The Phase I Environmental Site Assessment (Phase I ESA) is a widely-used, industry-accepted approach used to assess environmentally challenged properties. The Phase I ESA relies heavily on site visits, interviews with relevant parties, and historical documents and public records. The goal is to understand previous site use to help determine whether and what kind of contamination may exist. A Phase I ESA is required in order to qualify for federal liability defense protections and certain state protections. A Phase I ESA must be conducted by a certified environmental consultant.


Conducting a Phase II ESA is useful in filling remaining data gaps when recognized environmental conditions are identified. This assessment further characterizes a site in terms of the nature and extent of contamination. Phase II ESAs rely on direct field-based sampling and analytical techniques to identify and quantify actual concentration of contaminants in soil and groundwater. They additionally provide background information necessary to develop a cleanup strategy and estimate costs. A Phase II ESA is typically conducted by a certified environmental consultant.


Following completion of environmental assessments, project managers typically work with environmental consultants to determine a remediation or cleanup strategy. Results of a Phase II ESA typically include a site conceptual model determining contaminant exposure pathways. Contaminant clean-up goals are then identified based on existing regulatory guidelines and statues. Additional analysis and a variety of additional reports may be necessary based on the regulatory agency and complexity of the cleanup. An appropriate cleanup plan is then designed, taking into account unique site features. Cleanup may involve soil or groundwater removal or safe encapsulation of contaminants on site. Regulatory agencies may provide guidance throughout the process. In some cases, final approval from a regulatory agency certifies the cleanup process is complete. In other cases, there may be additional requirements to ensure safety from any residual levels of contamination, which were not technically or economically feasible to remove.


A major challenge faced when approaching a redevelopment project on environmentally impaired sites is unknown risk. Environmental insurance assists sellers, buyers, developers, and lenders in defining the costs associated with known and unknown contamination at a site. It can also serve as a powerful risk transfer technique. Understanding the project’s financial and timing constraints, as well as stakeholders’ risk tolerance drives the selection of various risk management and insurance solutions. Input from legal, engineering, and risk professionals should be sought early in the redevelopment process to allow maximum flexibility for your project. Environmental insurance is an effective tool bridging the risk gap on complicated brownfield redevelopment projects.


Securing front-end and long-term financing for brownfield projects can be difficult. Banks are often nervous about the possibility of high cleanup costs, loan defaults, and loss of collateral. Except for larger financial institutions, most banks do not have the in-house expertise needed to properly weight environmental risks. For these reasons, public financing at the local, state, and federal levels plays an important role in the funding of most brownfield projects. Despite the challenges with securing financial resources for environmental properties, given our strong record of providing funds, CCLR is here to help.