EPA Pilots New Program In Del. To Promote Redevelopment

May 4, 2005: Volume 8, Number 18Articles Delaware Law Weekly

Copyright 2005 ALM Properties, Inc. All rights reserved.

The United States Environmental Protection Agency has established a new pilot program aimed at encouraging the reuse of Superfund sites, and Delaware is the first state to cooperate in this effort.

It is known as a Site Reuse Profile, and it is the latest in a series of initiatives to promote redevelopment of underutilized and contaminated or potentially contaminated properties in the state of Delaware.

On July 13, 1995, in an effort to encourage the business community to purchase and redevelop abandoned industrial and commercial sites in Delaware, the Hazardous Substance Cleanup Act ('HSCA'), 7 Del. C. Chapter 91, Subchapter I, Section 9101, et seq., was signed into law. On Aug. 3, 2004, Gov. Ruth Ann Minner signed Senate Bill 328, 7 Del. C. Chapter 91, Subchapter II, Sections 9121 to 9126, known as the Brownfields Development Program. That legislation updates HSCA to further encourage development efforts by, among other things, eliminating certain liability concerns of parties who undertake cleanup of certain contaminated properties with oversight by the Delaware Department of Natural Resources and Environmental Control.

These programs did not address properties subject to the Comprehensive Environmental Response, Compensation and Liability Act, 42 U.S.C. § 9601 et seq., also known as 'Superfund' sites, as they usually do not qualify as brownfields. In this state there are a number of sites that are in the Superfund program and/or otherwise remain of interest to the EPA, Region 3. To help encourage reuse at these sites, Region 3 is launching the Site Reuse Profile program.

It applies to properties that do not qualify for an official EPA determination of 'Ready for Reuse,' or 'RFR.' RFR status indicates that all or a portion of a site is ready for specified uses. Sites on the National Priorities List that have been subject to removal action and may require additional cleanup, and remedial sites with ongoing cleanup, are examples of properties that are not ripe for an RFR determination.

Accessible on the Internet, the Site Reuse Profile has been designed to disseminate comprehensive information about the development potential of a site to developers and other prospective users. The profile on any given property will include information about the environmental conditions of the site, and the status of EPA and DNREC involvement at the site. It may also include information about potential funding and other redevelopment incentives, as well as other information about redevelopment potential, such as the infrastructure of the site.

It is important to note that EPA will only assist in facilitating reuse where all interested stakeholders, including the property owner and federal, state and local officials, are universally interested in pursuing such reuse. Additionally, any prospective user should keep in mind that Site Reuse Profiles do not convey any release of liability.

A prospective purchaser may be able to satisfy some liability concerns by qualifying as a bona fide prospective purchaser under the 2002 Brownfields Amendment to CERCLA. That legislation removed some liability barriers to purchasers of property and encourage redevelopment. Although the Brownfields Amendment provides a limitation on liability from CERCLA to persons who qualify as BFPPs, other types of liability exposure, including 'windfall liens' (liens held by the EPA where the response action increases the fair market value of the facility) will require separate consideration.

The full nature and extent of the profile is not entirely known as the program is in its infancy, and has only recently been made public. The Site Reuse Profile is a Region 3 initiative. It has not been implemented in any other region or state, and is being tested as an open-ended pilot program in order to gauge interest in the business community, as well as the degree of success. The sites that qualify under this program are in the process of being profiled and have not yet been made public by EPA. Whether the Site Reuse Profile proves to be a reliable tool to market underutilized properties in Delaware remains to be seen.