PA Brownfields Environmental Law

PADEP Budget Cuts

jbolstein@foxrothschild.com (Joel Bolstein) — Tue, 17 Nov 2009 16:30:36 -0500

Word out today that PADEP has to cut 120 jobs as a result of the recent budget. I'm told that the final word on which employees are being cut will come out on Friday. I feel for my friends within the Department, both management and staff. This cannot be an easy time for anyone.

Proposed Regulations on High TDS Discharges Now Out for Public Comment

jbolstein@foxrothschild.com (Joel Bolstein) — Fri, 13 Nov 2009 15:21:19 -0500

The Notice of Proposed Rulemaking for the proposed regulations on Discharges of High Total Dissolved Solids (TDS) was published in the Pennsylvania Bulletin on November 7, 2009. The comment period on the proposed regulations runs through February 5, 2010, and PADEP has scheduled four public hearings to take place in December. If everything runs according to the Department's stated timetable, the new regulations would take effect on or before January 1, 2011.

I've written about the potential impact of the proposed regulations in prior posts on this blog. For the Marcellus Shale industry, the regulations impose new treatment requirements and restrictions on wastewater discharges. Given the amount of money being invested by the Marcellus Shale industry in developing natural gas wells in Pennsylvania, I assume that they are prepared, to paraphrase JFK, to pay any price and bear any burden to make what could be billions in revenue from wells drilled into the Marcellus Shale formation. For businesses outside the growing natural gas industry, i.e., traditional Pennsylvania manufacturing businesses, these new regulations will pose some significant business challenges.

The regulations pose challenges for new businesses looking to locate in Pennsylvania. Any "new" business, i.e., one that did not have a wastewater discharge as of April 2009, will need to comply with the 500 ppm TDS discharge limit, if its wastewater discharge would otherwise exceed 2,000 ppm of TDS. In all likelihood, that will mean modifying processes to stay below the applicable thresholds so as not to trigger the need for wastewater treatment. If that can't be done, then the business will need to identify a means of treating the discharge and pay the cost of that treatment.

For existing businesses looking to expand, the regulations will pose unique challenges. Hypothetically, let's assume you are operating a manufacturing plant in Pennsylvania that employs 300 people. The manufacturing process uses water for cleaning purposes and it currently is treated before being discharged into some surface water. Your current permit has no limit on TDS, or for purposes of the hypothetical, let's assume it allows you to discharge up to 3,000 ppm of TDS. If this regulation becomes law, that business will be allowed to continue operating in its present form and nothing will change. There will be no unilateral reduction in the TDS limit and no need for additional treatment. The moment the manufacturer decides to increase production, resulting in an "expanded" or "increased" discharge, these new regulations would kick in and the manufacturer would have to identify means to treat the TDS discharge to meet the 500 ppm limit. The problem is, as PADEP recognizes in the preamble to the proposed rulemaking, "currently no treatment exists for TDS, sulfates and chlorides, other than dilution." Although the Department and stakeholders are trolling the literature, it's very possible that there still will be very few options available for treating high TDS when these regulations become final. That is going to present existing Pennsylvania businesses with a dilemma. They can stay in Pennsylvania and operate at current levels without the need to identify or pay for new wastewater treatment on TDS. If they decide they need to expand, they'll have to weigh the costs and availability of any new wastewater treatment against other options, which will include shutting down and/or moving operations outside Pennsylvania.

The last thing I would expect Pennsylvania elected officials would want is to force businesses to leave or locate new facilities elsewhere. And don't think businesses won't leave. In today's business climate, where many Pennsylvania manufacturing facilities are owned by out-of-state or foreign corporations, any disincentives to staying or locating in Pennsylvania could be the deciding factor. Having been an environmental lawyer for over 20 years, I've seen too many good Pennsylvania companies disappear from the landscape. Some have gone south (North Carolina, Texas, Mexico), others have gone overseas (India, China), and others have gone bankrupt or just gone out of business (Bethlehem Steel). When I was Deputy Secretary at PADEP, our brownfield program grew out of the fact that virtually every Pennsylvania community was the home to some old factory that was vacant, abandoned or underutilized, and incentives were needed to put those sites back into productive use.

While I realize that high TDS is an issue in some places around Pennsylvania, it certainly is not an issue throughout the Commonwealth. The rulemaking preamble notes that the Department is considering the formation of a work group in the Monongahela River Watershed to focus on wastewater issues relating to the Mon. No doubt there will be some questioning why the Department needs to take a one-size-fits-all approach to high TDS discharges. Why couldn't it simply focus on high TDS from the Marcellus Shale operators? Why couldn't it focus just on the Mon and the West Branch of the Susquehanna? Maybe those issues will be raised in the public comments, or during the public hearings scheduled outside those watersheds.

The rulemaking creates great uncertainty for Pennsylvania businesses. It makes it difficult to do long range planning. On top of that, there would appear to be some wishful thinking on the Department's part that cost-effective, wastewater treatment technologies will become available before the regulation becomes effective. All Pennsylvania business that generate high TDS need to take this seriously and to plan accordingly. Those plans should start with preparing comments for submittal to the EQB and working with their industry groups to make sure the Department hears their concerns.

Despite Cuts, ISR Funding is Available for Brownfield Sites

jbolstein@foxrothschild.com (Joel Bolstein) — Mon, 02 Nov 2009 15:31:16 -0500

I spoke with Scott Dunkelberger at PADCED today to see if he still has funds available for assessments and remediation grants. Scott says that the General Assembly transferred approximately $5 million from Growing Greener 2 into the ISR Fund, so he's in good shape. The most recent budget zeroed out approximately $500,000 that had been annually appropriated for assessments under Act 4, but there is still plenty of state money available for environmental assessments and remediation at brownfield sites in Pennsylvania. Applicants for grants must work with their local economic development agencies or redevelopment authorities, since only loan money is available to private developers. One piece of good news is that Scott says there really is no backlog at this point for ISR funding. When the economy was cranking, there often was a 6 to 12 month wait to get ISR funding, because there was always more funding requested than there was funding available. With the slowdown in the economy, there's no backlog now, so anyone with a viable brownfield redevelopment project should get in line now.

Public Funding for Brownfield Development Takes a Hit

jbolstein@foxrothschild.com (Joel Bolstein) — Fri, 30 Oct 2009 16:05:30 -0500

As previously reported, the state operating budget for PADEP took a large hit in the budget recently signed into law by Governor Rendell. The corresponding reduction in Department personnel will undoubtedly have an impact on brownfield redevelopment activities in Pennsylvania. Fewer personnel at PADEP means fewer people to review and approve Act 2 plans, reports and environmental covenants. It also means fewer people to review and approve air, water, stormwater and waste permits needed by developers to put brownfield sites back into productive reuse. The result of a reduced budget could be unpredictable review times as program managers scramble to find the necessary resources to get the job done.

In addition to the cuts at PADEP, significant cuts were made at the Department of Community and Economic Development which has historically provided grants to economic development agencies for environmental assessments and remediations at brownfield sites in Pennsylvania. The budget for PADCED dropped dramatically from $567 million to $264 million in this budget cycle. Included among those cuts was a zeroing out for the Industrial Sites Environmental Assessment Fund (a loss of $493,000) and a zeroing out for the Keystone Innovation Zones (a loss of $543,000). Marketing budgets for attracting business have been slashed, as have other grant and loan programs used to attract new businesses to Pennsylvania. Community Revitalization, previously at $39.5 million, has been eliminated entirely, as has $18.75 million for Urban Development.

In looking over the list of line items in the new budget for PADCED, I did not see any line item for the Industrial Sites Reuse Program. The ISR program had typically been funded annually at the $5 million level and it had been used to provide assessment and remediation grants under Act 2. I'm not sure if that money has been put into some other fund or if it has been eliminated entirely. I have a call into the PADCED grants office to see if I can get some answers regarding the future of the ISR fund. If it is gone, that will be a real loss to the county redevelopment authorities that have successfully used those funds to reclaim brownfield sites across the Commonwealth. It will also be a great loss to the brownfield redevelopers who have partnered with those redevelopment authorities and brought life back to some blighted properties.

It's possible that redevelopment and economic development agencies will be able to tap into other state grant funds to use for brownfield assessments and cleanup. I'll be looking into that as well. Absent state money, federal brownfield dollars will have to fill those gaps, and we may all have to learn to live with the extra strings that are attached to those federal brownfield dollars.

Brownfield Insurance Program in Ohio Provides Food for Thought in PA

jbolstein@foxrothschild.com (Joel Bolstein) — Tue, 13 Oct 2009 15:42:51 -0500

The Ohio EPA recently announced a new program designed to provide lower cost environmental insurance to brownfield developers remediating sites in Ohio's voluntary brownfield program. The news release issued by Ohio EPA states that it has signed a memorandum of understanding with three insurance carriers (ACE Environmental Risk, American Insurance Company and Navigator's Specialty Insurance Company) relating to their offering discounted insurance to applicants taking their sites through the states Voluntary Action Program. The discounts are 10 percent off the typical cost of the premium. Environmental insurance policies can be expensive for brownfield remediation projects, so a discounted policy would provide an additional incentive. I know that PADEP had pursued discussions with insurance carriers about a similar pooling arrangement, but I don't think those discussions came to fruition. There is no information on PADEP's website about any similar insurance program fro Pennsylvania brownfield sites. Now that Ohio has rolled out its program, it would be a good time for PADEP to take a look to see if that program can be adapted to fit Pennsylvania's brownfield program. Maybe the three insurance carriers could be convinced to provide similar discounts to brownfield remediators in the Commonwealth.

Heavy Budget Cuts at PADEP

jbolstein@foxrothschild.com (Joel Bolstein) — Fri, 09 Oct 2009 16:12:09 -0500

PADEP's state operating budget is being cut by 26.7%, according to information I received today. What does that translate into in terms of reduced compliment at the Department? I'm told that it's estimated PADEP will lose 325 real people. How the Department will get its work done with those cuts on top of other cuts that have occurred over the last few years is going to be a topic of much conversation both inside and outside the Department. I'm told the Department may have to consider handing programs back to EPA. What's it going to mean for brownfield developers? Will brownfield developers feel any of those cuts? Undoubtedly they will. Fewer DEP staffers mean fewer people to review Act 2 plans and reports. It also means fewer people to review and approve permit applications necessary for development projects, i.e., air permits, water permits, NPDES stormwater construction permits. The Department may have to resort to something it has previously tried to avoid, namely, allowing plans and permits to be deemed approved because the Department hasn't met its statutory review deadlines. The Department is going to be entering uncharted waters with this new budget, and we'll all have to be watching closely to see how it is going to affect individual programs.

New Environmental Hearing Board Appointments

jbolstein@foxrothschild.com (Joel Bolstein) — Fri, 09 Oct 2009 15:30:47 -0500

Dave Hess just wrote on his blog that the PA Senate earlier today confirmed the following individuals as members of the Environmental Hearing Board: Thomas W. Renwand, Michelle Coleman, Michael Krancer, and Richard Mather. I spoke with Dave a few minutes ago and he confirmed the information. The new appointments mean that Judge Krancer has been returned to the EHB, having previously stepped down as Chief Judge to run for the PA Supreme Court. Rick Mather is currently the Deputy Chief Counsel for PADEP in Harrisburg. He has a lifetime of experience within the Department and is an excellent addition to the Board. I have worked with Rick and he has good judgment and I expect a good judicial temperment. The fifth remaining member is Judge Bernie Labuskas, whose term had not expired. The new appointments also mean that Judge George Miller's tenure on the EHB has now ended. There isn't enough time to review Judge Miller's accomplishments or to properly thank him for being an outstanding jurist. He arrived on the EHB having left private practice in 1995, where Jim Seif and I worked with George where he was chair of our environmental practice group. We knew George would make an excellent Judge because of his skills and training as an environmental lawyer, his collegial attitude, and his general nature as what people used to refer to as being "a Philadelphia lawyer." Judge Miller was my mentor at my former firm and I used to enjoy popping down into his office for a chat when I was on the 16th floor of the Rachel Carson Building and he was down on the second floor. At my former firm, Judge Miller used to affectionately call me "Lad". At DEP, he used to enjoy calling me Mr. Deputy Secretary. In many ways, I wouldn't be where I am or who I am without the guidance I received from Judge Miller. He is everything someone who calls themselves an environmental lawyer should strive to be -- honest, hardworking, knowledgeable, experienced, collegial, good-natured, and respectful to all. To Judge Miller I fondly say, you can be proud of your accomplishments on the Environmental Hearing Board, which go beyond the decisions you've written and go directly to the respect you've earned from all those who practiced before you.

First Glance at Proposed Changes to Chapter 250 Regulations

jbolstein@foxrothschild.com (Joel Bolstein) — Tue, 06 Oct 2009 18:38:16 -0500

The Department has posted on its website some proposed changes to the regulations for the Land Recycling Program. They can be found on the home page for the Cleanup Standards Scientific Advisory Board.

The proposed regulatory changes are "for discussion purposes only." They have not been sent to the Environmental Quality Board.

The most significant items are as follows: (1) many of the statewide health standards for soil and groundwater will be revised to reflect changes to the methodologies used by US EPA in calculating MCLs; (2) the vapor intrusion guidance is incorporated by reference into the regulations; and (3) the Department will explicitly recognize that groundwater samples taken for characterization purposes can be used for purposes of demonstrating attainment.

In terms of revising the cleanup standards, in looking through the charts it is clear that some numbers will go up and some will go down. The one change that jumped out at me was the proposed new statewide health standard for MTBE in groundwater which will go from 20 ppb to 190 ppb for residential and 960 ppb for non-residential properties. At many brownfield sites where petroleum products are the contaminant of concern, MTBE can be the driver in delaying closure of the site. That is likely to change if and when the new standards are adopted.

With regard to statewide health standards that are proposed to be decreased, I was told by Troy Conrad, the Director of the Land Recycling Program, that the Department has no intention of reopening any Act 2 releases at sites that demonstrated attainment under the existing statewide health standards. Those releases are valid, having been obtained under the standards existing at the time the Act 2 Final Report was approved. Moreover, those releases recognize that the sites are safe and protective of human health and the environment, and PADEP is right to leave those releases alone. It would be a real nightmare for the Department and for brownfield redevelopers to have to revisit each and every site where a release was obtained from the onset of the Land Recycling Program almost 15 years ago.

Inasmuch as the cleanup standards will be changing, environmental consultants and brownfield redevelopers in Pennsylvania would be smart to look at the proposed changes to the Chapter 250 regulations that are now on the Department's website to see if those changes will have any effect on current and future brownfield remediation projects.

Draft UECA Regulations Do Not Address Periodic Reporting

jbolstein@foxrothschild.com (Joel Bolstein) — Wed, 30 Sep 2009 15:38:57 -0500

I've taken my first look through the draft UECA regulations that are now on PADEP's website. My biggest issue isn't with what's in the draft regulations but with what isn't in there.

After several years of advising clients regarding compliance with UECA and having submitted a number of them to PADEP for review and approval, I can say that the most significant concern for brownfield developers is the fact that the Model Covenant on PADEP's website imposes periodic reporting obligations on the property owner that run in perpetuity. So, for example, if the remediation involves capping some contaminated soil with asphalt or concrete, the environmental covenant will say that the cap has to be maintained and the property owner must report annually (i.e., forever) to the Department that it is continuing to maintain that engineering control. It wasn't that way prior to UECA. Before UECA, the property owner would put notice of the cap in its deed and that would be that.

Upon first reading UECA, one could have easily concluded that the drafters did not intend to impose perpetual reporting obligations in each and every environmental covenant. Information "required" to be included in environmental covenants is set forth in Section 6504(a) of UECA. Additional information that was supposed to be optional was set forth in Section 6504(b) of UECA. One of the optional requirements is Section 6504(b)(2) -- "requirements for periodic reporting describing compliance with the environmental covenant." Nonetheless, what appears to have been considered optional by the drafters of UECA has now become required, as a result of the use of the Model Covenant and through the actions of the Department staff responsible for reviewing and approving the environmental covenants.

I had hoped that the regulations would provide an avenue for the Department to interpret Section 6504(b)(2) in a way that would set forth criteria to use in determining instances in which periodic reporting was not required. Surely, perpetual monitoring isn't necessary for every institutional and engineering control. We got along just fine without it in the twelve years that brownfield developers were successfully remediating thousands of sites under Act 2 prior to UECA's passage. In addition to using the regulations to draw distinctions between sites that require periodic monitoring and sites that don't, the regulations could be used to set ground rules for the frequency of the periodic reporting. Some ECs approved by the Department require annual reporting while others allow reporting every three years. There is nothing in any of the UECA guidance (the fact sheets and model covenant) issued by the Department to date that explains how one determines the needed frequency for the reporting. It seems to me that the regulations might be an appropriate place to set those ground rules.

In my reading through the draft regulations, it is apparent that the Department has chosen not to use the regulations to clarify when the "optional" reporting obligation need not be imposed or the frequency of the reporting obligation in those instances when it is imposed. In speaking with Troy Conrad at PADEP, who will be responsible for moving the draft regulations to completion, he acknowledged that the draft regulations don't address the issue of periodic reporting. He suggested it may be better addressed with additional guidance to be provided in the Act 2 Technical Guidance Manual. I agree that is a possibility, but these are issues that need to be addressed in one form or another.

To the extent that the Department is using the regulations to interpret UECA, then it may be entirely appropriate to include provisions addressing the requirements for periodic monitoring in Section 6504(b). The Act 2 TGM is used as a supplement to the Act 2 regulations. It expands upon and provides additional guidance, but the Act 2 regulations address the major issues. The need or lack thereof for periodic monitoring is a major issue under UECA. I would hope that the Department would specifically solicit comments on the need for periodic monitoring and the frequency of that monitoring, when it formally releases the draft regulations as proposed regulations later this year. This is an issue of great concern to brownfield developers in Pennsylvania. I intend to bring up the issue at the next meeting of the UECA Stakeholders Group and I would encourage others to weigh in on this issue as well.

Obtaining a Copy of the Draft UECA Regulations

jbolstein@foxrothschild.com (Joel Bolstein) — Thu, 24 Sep 2009 14:32:13 -0500

I realize that the link I provided in my last post for the draft UECA regulations is not working. I'm not sure why that is, but for anyone looking to get a copy of the draft UECA regulations, here is how you do it:

Go to PADEP's website www.depweb.state.pa.us

On the left side, click on Public Participation

Scroll down to DEP Advisory Committee Agendas, Minutes and handouts and click on that

Scroll down to the Cleanup Standards Scientific Advisory Board and click on that

Click on Upcoming and Past Meeting Information

Click on Proposed Draft regulations implementing UECA

Click on the Staples Easy Button on your desk, which says "That was easy"

Draft UECA Regulations Are Now Available for Review

jbolstein@foxrothschild.com (Joel Bolstein) — Thu, 24 Sep 2009 13:53:53 -0500

The draft UECA regulations are now available on PADEP's website. They aren't on the brownfields web page or on the UECA page. They can be found as an agenda item to the most recent meeting of the Cleanup Standards Scientific Advisory Board (SAB). The only reason why I found out about them was because I called Troy Conrad at PADEP, after having gotten word from an ECP manager in one of the regional offices that the Department was getting close to sending proposed regulations to the EQB.

I spoke with Troy Conrad this morning to get more information. Although UECA does not set any deadline for the Department to promulgate regulations implementing UECA, the Department is making this a priority and would like to get the proposed regulations on the agenda for the EQB's meeting in December 2009. The draft regulations were developed by an internal work group and vetted with the regional offices. In advance of the EQB meeting, the draft regulations are being discussed with the SAB, the Storage Tank Advisory Board and the UECA Stakeholders Group, which I participated in. Troy Conrad expects the UECA Stakeholders Group to meet to discuss the draft regulations in late October.

I was also told by Troy that the Department is working on a companion document to the draft regulations that will provide guidance on the Department's use of the waiver authority granted in UECA. The draft of the companion document is being worked on now and it is intended to go through the usual notice and comment that generally accompanies Department issued technical guidance documents.

I haven't read through the draft regulations, but will do so and provide my thoughts in a future entry. Troy didn't think I'd find anything that surprised me, but I'll withhold judgment on that for now.

I commend Troy for moving forward with UECA regulations. Up until now, the Department has been relying on fact sheets that can be found on the UECA web page. That was fine for the early months after UECA was enacted and the Department had little advance warning to prepare guidance for staff and the regulated community. At this point, lots of questions have arisen regarding UECA and it is important for the Department to get draft regulations out so it can receive comments, which undoubtedly will raise a host of issues that the Department will need to think through. I am told by Troy that anyone who has comments about the draft regulations should feel free to send those comments to his attention at the Department. Meaning, there is no reason to wait until the draft regulations have gone to the EQB. If you have something on your mind, you should feel free to pass those thoughts along to the Department now. Also, inasmuch as I will be participating in the UECA Stakeholders Group meeting in late October, if anyone has any thoughts or comments that they'd like me to bring to the table, feel free to shoot me a comment or an email.

Again, I'll have more thoughts once I get a chance to read through the draft regulations.

Bucks County RDA Needs Takers for Revolving Loan Fund Money

jbolstein@foxrothschild.com (Joel Bolstein) — Fri, 18 Sep 2009 09:05:32 -0500

I was speaking with the Executive Director of the Bucks County Redevelopment Authority, Bob White, who told me that they need to get the word out on some EPA Revolving Loan Fund money that is available to pay for remediation of contaminated properties. The BCRDA has two separate EPA Revolving Loan Funds, each with a million dollars. One is available for sites with contamination of any kind and the other is targeted at petroleum contaminated properties. The loan money is available at 2% and the repayment term can be up to 15 years. Anyone interested can contact me or Bob White at the BCRDA at (215) 781-8711. It's hard for me to understand why there are so few takers for the revolving loan fund money. It's possible that the economy has caused some to exit the brownfield redevelopment market. It's also possible that people would rather get grant money (i.e., free money) than they would low interest loans. Regardless, anyone looking to redevelop brownfield property in Bucks County would be wise to contact the BCRDA to talk about the availability of Revolving Loan Fund money, as well as the other funding tools they have available. Bob White is an expert in the area of brownfield redevelopment who was called, along with me, to testify before a PA Senate committee on the success of the Pennsylvania's brownfield program. The BCRDA has successfully redeveloped a number of high profile brownfield properties, including the Riverfront North/former Dial Soap Site in Bristol Borough, which is now the worldwide headquarters of the Lennox company as well as an age-restricted retirement community.

Pace of Pennsylvania Brownfield Remediation Tied to National Economy

jbolstein@foxrothschild.com (Joel Bolstein) — Fri, 28 Aug 2009 15:23:26 -0500

I can't point you to any hard numbers or statistics, but my instincts tell me that brownfield redevelopment work in Pennsylvania is down. Why? It's all connected to the national economy.

Years ago, when the housing market was booming, developers were looking at every brownfield site in Southeast Pennsylvania as a possible location for new houses. I worked on many brownfield projects that turned old manufacturing sites into townhouses or condominiums. Now, with the housing market still mired in the recession, few, if any, brownfield developers are actively looking for new residential development projects. Yes, there are townhouses and condos being built on brownfield properties (for example, in Ambler Borough, Montgomery County), but builders are not climbing over one another to get those projects like they used to. Last week, I was at a fundraiser and sat next to a senior executive for one of the largest home builders in the country. I asked him how things were going and he replied "things are slow". He went on to say that his company was completing work on existing projects but wasn't really starting any new projects. He did say that he thought things would be picking up next year.

Aside from housing, brownfield redevelopers that take ownership of industrial properties and then lease them out are finding that tenants are having a much more difficult time paying rent. Also, it's harder to find new tenants for those buildings because companies aren't expanding as rapidly. That means that brownfield developers are spending more time just trying to keep their existing properties fully leased and have less time available or less inclination to look for other brownfield properties to redevelop.

I'll tell you where I do see active brownfield redevelopment work in PA. I see it in the smaller sites where brownfield redevelopers are converting old corner gas stations into drugstores and banks. I see medical providers, like MRI centers and dialysis centers, looking for properties for those expanding businesses. I am working with one company that is looking to put a dialysis center in a former car showroom in Philadelphia. The car dealership went out of business and the building is in an ideal location, within a major population center where people need those medical services.

Do I see any other signs that brownfield redevelopment activity is picking up? One sign is that a client that is in the soil remediation business told me that they've recently starting hiring again as a result of an increase in remediation projects. They see companies freeing up capital for long delayed projects. I've also read articles about stimulus money going to tank cleanups and site remediation, but I have yet to come into contact with any consultants or developers working on those projects. I'm sure they are out there, but it's hard to tell.

I also see lots of alternative energy projects, like solar, being built on brownfield projects. Alternative energy projects are great opportunities for brownfield developers to add value to their projects on the back end. For example, if you have a large site that needs to be capped, what better way to maximize returns then to put a solar energy system on top of the cap. Alternative energy credits can be sold to retail electric providers who need to add solar to their energy portfolios. There are also significant tax benefits and grants that can make these projects profitable. Are they happening? Yes. I'm working with one client on putting a large solar panel array on the roof of their corporate headquarters in Montgomery County. I'm working with another on investigating the possibilities of putting in a solar array on top of an old landfill.

I'm an optimist. I'd like to believe that 2010 and 2011 are going to be boom years for brownfield developers. We saw what happened with cash for clunkers when car buyers were given incentives and they came out in large numbers. I think the same pent up demand will be out there for real estate and brownfield developers who will see significant opportunities in the near future.

My advice to all as we head into the fall is to keep looking for opportunities and stay in close contact with your brownfield developer clients, colleagues and friends. You don't want to be caught napping when this recession ends and projects start picking up.

No Budget but PADEP Still on the Job

jbolstein@foxrothschild.com (Joel Bolstein) — Wed, 29 Jul 2009 14:28:51 -0500

Pennsylvania's budget is overdue. What does that mean for brownfield developers? It means that the people who are reviewing your Act 2 reports in each of PADEP's regional offices, and the people setting policy for the Pennsylvania Act 2 program in Harrisburg, may not be getting paid. In fact, unless a budget is adopted quickly, many employees at PADEP will not be getting pay checks this Friday.

I've spoken with many people at the Department over the last week, as is typical for one of my work weeks. I've also exchanged numerous emails with ECP staff and counsel advising the ECP program. In each of those communications, I express my sympathies over the present situation and ask how things are going. Many of the people at the Department are my former colleagues and friends, especially those in the Act 2 program. In each instance, they thank me for my concern and say that people are managing as best they can in a very difficult situation. What amazes me is that people continue to go about the Commonwealth's business despite not being paid. That, to me, is proof that the people at PADEP are among the most dedicated, mission driven employees in the Commonwealth.

When you are getting ready to make that phone call to someone at PADEP about one of the brownfield projects you are working on, or you're tapping out an email to the ECP program staff asking to set up a conference call or a meeting to keep a project moving, take a moment to thank that person for continuing to do their job during this budget crisis. It's a difficult time for everyone at PADEP. Even if someone happens to be working in a program that receives federal funding allowing them to continue to get paid, there's a friend or colleague down the hall that's struggling to figure out how they are going to pay their bills without that regular pay check.

Brownfield redevelopment in Pennsylvania is a team effort , and the people at PADEP who review and approve your site characterization reports and cleanup plans and final reports are integral members of the team. When someone on the team is hurting, it is up to all of us to help pick them up. My advice to everyone that works on brownfield redevelopment projects in Pennsylvania is to be understanding, be human, and show some compassion for the people at PADEP that are continuing to help move your brownfield projects along during this difficult time. Let's all hope that a budget is passed as soon as possible.

Brownfield Redevelopment Reduces Greenhouse Gases

jbolstein@foxrothschild.com (Joel Bolstein) — Fri, 17 Jul 2009 14:53:21 -0500

According to the Director of California's Department of Toxic Substances Control, Maziar Movassaghi, redeveloping brownfield sites along transit lines or in downtown areas can achieve 25 to 40 percent reductions in greenhouse gas (GHG) emissions, when compared with building in undeveloped areas. That is based on studies done by the University of California-Berkeley. A law in California requires regional planning agencies to meet GHG reduction targets and brownfield redevelopment is seen as a viable means of achieving those targets. It all makes sense to me. Brownfield redevelopment along urban corridors can increase the use of public transportation, reducing the number of cars on the road. New buildings can be built to meet more modern energy efficiency standards or to achieve LEED certification, and they can be designed to use alternative energy, like solar panels. The California studies and the thinking being employed by the California Department of Toxic Substances are equally applicable in a state like Pennsylvania. As the federal and state governments begin to implement policies and regulations requiring the reduction of GHG emissions, policy makers in Pennsylvania should take advantage of the fact that we have many brownfields in urban areas and near public transit, and redevelopment of those brownfields should be part of any package of activities implemented to reduce GHG emissions.

Buy American applies to Stimulus Money used for PA Brownfield Projects

jbolstein@foxrothschild.com (Joel Bolstein) — Thu, 16 Jul 2009 13:28:45 -0500

In a Federal Register notice published on July 2, EPA revoked prior guidance and stated "EPA has determined that when a non-governmental borrower or subgrantee uses [Revolving Loan Fund (RLF)] supplemental funds for remediation activities at public buildings or to carry out a public work, the Buy American provisions apply." As noted in prior posts, there are millions of stimulus dollars being spent on brownfield redevelopment projects in PA. The recipients of those funds need to understand the "Buy American" provision and adhere strictly to it or place their funding in jeopardy. How any of this will work, is unknown. It would be prudent for anyone involved in a project using RLF funds to contact EPA and seek clarification on the scope and applicability of the Buy American provisions. For example, if the remediation involves using chemical oxidation, do the chemicals have to be manufactured in the U.S.? If the remediation involves replacing a water line, does the steel or concrete used in that water line replacement have to be manufactured in the U.S.? As counsel to the Redevelopment Authority of Bucks County, which uses and subgrants RLF funds, I will be seeking answers to those questions. Stay tuned.

PADEP Working on UECA Regulations

jbolstein@foxrothschild.com (Joel Bolstein) — Mon, 06 Jul 2009 17:01:12 -0500

PADEP is working on the draft regulations for implementing UECA, and those draft regulations should be up to the Executive Staff in August and sent to both the Cleanup Standards Scientific Advisory Board and the UECA Stakeholders Group for review in September. That's the word I got from Troy Conrad, the Chief of the Land Recycling Program, in a phone conversation earlier today. Saying it will be a "pretty plain vanilla" rulemaking, Mr. Conrad said we shouldn't expect to see anything in the rulemaking that will seem like a dramatic change from the underlying statute, which was signed into law on December 18, 2007. The most significant issue to be addressed by the rulemaking would appear to be the matter of converting existing instruments containing activity and use limitations to environmental covenants. That issue was wrestled with by the UECA Stakeholders Group. It sounds like the Department is likely to narrowly interpret "instruments" to mean deed restrictions, which makes a lot of sense. It also sounds like the Department is likely to craft language allowing for waivers of the conversion requirement and for postponing conversion to the time a future transaction occurs.

UECA has proven to be a much more troublesome statute than I think anyone expected. It has added a complicating feature to Act 2 cleanups and to property transactions. It adds an element of uncertainty, because there are no clear rules. The compliance monitoring provision in the environmental covenants generally imposes a perpetual, never-ending requirement to provide a periodic update to the Department on the continued adherence to the activity and use limitation. Buyers and Sellers now routinely argue over the scope of the monitoring requirement and who should be responsible for bearing the cost and for providing the periodic report to the Department. It's also added a new set of considerations to remediation projects funded by USTIF.

We are all looking forward to the opportunity to review and comment on the Department's draft UECA regulations. Brownfield redevelopment works most effectively when the rules are clear and the surprises are limited. It sounds like we shouldn't have to wait much longer.

Federal Stimulus Money for UST Cleanups in PA

jbolstein@foxrothschild.com (Joel Bolstein) — Thu, 02 Jul 2009 11:43:56 -0500

In one of my prior posts, I talked about how much federal stimulus money was being spent in Pennsylvania on brownfield projects. Yesterday, Governor Rendell announced that Pennsylvania was applying for $6.1 million in federal stimulus dollars to fund 71 leaking UST remediation projects in 40 counties statewide. In his news release, the Governor noted that the funds would be distributed by US EPA and would be made available at sites where there were no viable responsible parties. The news release has a list of 71 sites "where Pennsylvania anticipates it will address leaking underground storage tanks using funding from the American Recovery and Reinvestment Act." It's unclear how the list was put together or whether the money is limited t o those 71 sites or could be used at other eligible sites. I am aware that other federal dollars, not necessarily stimulus funds, are available for the remediation of petroleum contaminated sites. For example, the Redevelopment Authority of Bucks County has a revolving loan fund with $500,000 in it for this same type of work. What we have found is that the requirement that there be no viable responsible party available to pay for the remediation makes it difficult to get some projects approved. There are some sites that have functioned as Mom and Pop gas stations for decades, but prior to that they may have been owned by one of the large petroleum companies. You can drive by them and they look abandoned, but legally they may not meet the requirement of no viable responsible party because a review of the chain of title shows some large petroleum company owned the site 50 or 60 years ago. In those instances, we've been unable to get the certification needed to approve the release of the revolving loan funds. I've argued that the requirement should not be applied so strictly as to prevent the use of the funds at a site that is abandoned for all intents and purposes. I'm hoping that the requirement of no viable responsible party will not be an impediment to the use of the federal stimulus funds at these Pennsylvania brownfield sites. Presumably, EPA and DEP have learned from the experiences with the revolving loan funds and will find a way to ensure that the funds can be spent at a site even if there remains a viable entity somewhere in the chain of title.

Brownfield Funding Through the Proposed Natural Gas Severance Tax

jbolstein@foxrothschild.com (Joel Bolstein) — Mon, 29 Jun 2009 10:56:02 -0500

Legislation voted out of the Pennsylvania House Environmental Resources and Energy Committee last week, House Bill 1489, which imposes a natural gas severance tax, will provide a dedicated funding stream for Pennsylvania's brownfield program. The legislation sets aside 4 percent of the severance taxes to the state's Hazardous Sites Cleanup Fund, which is used in part to pay for the operation of the Land Recycling Program. Just last year, the HSCA Fund was going broke before the General Assembly appropriated additional money to keep the program running. The concern lingers that the most recently appropriated funding will eventually run out, absent a dedicated funding stream. Without offering any opinion on the wisdom of a natural gas severance tax, if there is going to be a severance tax, the idea of dedicating some of that money for the remediation of contaminated sites, including Pennsylvania brownfields, is an idea that should be supported. The legislation would also dedicate 15 percent of the taxes generated to the Environmental Stewardship Fund, which is the Growing Greener Program. The bill now goes to the full House.

Ken Reisinger Named Acting Deputy Secretary for Waste, Air and Radiation Management

jbolstein@foxrothschild.com (Joel Bolstein) — Wed, 24 Jun 2009 10:40:06 -0500

On Monday, PADEP Secretary John Hanger named Ken Reisinger as the Acting Deputy Secretary for Waste, Air and Radiation Management to replace the recently retired Tom Fidler. Ken was previously the Director of the Waste Management Bureau, one of three bureaus under that deputate. Ken now adds air quality and radiation protection to his prior responsibilities managing the programs covering hazardous, residual and municipal waste, remediation services (HSCA and CERCLA) and storage tanks. Ken is a veteran of the Department having previously served as Chief of the Division of Waterways, Wetlands and Erosion Control. In my many dealings with Ken he has proven himself to be an excellent listener and problem solver. As Jim Seif would say, Ken is one of those guys that "gets it" and understands the need to get things done. He's racked up many accomplishments through his tenure at the Department and my expectation is he will bring an enormous amount of energy to this new position. Being Tom Fidler's replacement, Ken has some very big shoes to fill. Although Ken doesn't have direct responsibility for the management of the Land Recycling program, Ken's responsibilities over air and waste permitting, remediation (including the implementation of the Clean Fill Policy ) and storage tanks makes his position extremely important in the continued success of brownfield redevelopment efforts in Pennsylvania. Having spoken with Ken at Tom Fidler's retirement party last week, I know that Ken is up to the task and I wish him well in his new role.