XV Brownfields
Library | Illinois Environmental Law for Non-Environmental Lawyers (2017 Ed.) |
A. Introduction
The term "Brownfields" refers to former industrial or commercial sites with either actual or perceived contamination that have a potential for redevelopment into a productive use. Such properties impose a burden on the local economy in terms of lost revenues and employment. They also oftentimes pose a risk to public health and safety.
A number of local, state, and national entities have developed programs to address the issues arising out of these abandoned or underutilized properties. Although the risks associated with contamination at these sites, the costs of cleanup and the potential liability imposed by the Comprehensive Environmental Response, Compensation, and Liability Act of 1980 (commonly referred to as "CERCLA"),1 are of concern to potential purchasers of Brownfields properties, more recent legislative enactments and regulatory initiatives have lessened the impact, if not alleviated altogether, those issues under the appropriate conditions.
Despite these developments, a Brownfields project faces a myriad of difficulties not associated with a "Greenfield" development. One such impediment is the additional costs needed to address the contamination and conduct a remediation of the site. These costs may be significant and could impair the financial viability of the redevelopment project. Another impediment is delay. Brownfields developments typically take more time to complete. As a result, developers often look first to an outlying area because of reduced development costs and the perceived ease in a timely completion of a project.
Illinois has several programs to encourage the redevelopment of underutilized or abandoned properties. These programs offer financial incentives, liability relief and relaxed remediation standards based upon the future use of the property.2 These programs call for cooperation of parties with diverse interests including community representatives, state and local regulators, other municipal officials, financial institutions, environmental professionals and the developer.
A detailed discussion of all the issues present in a Brownfields project is beyond the scope of this article. However, a brief overview of a project is appropriate to provide some background should such a project present itself. Each project is unique. Therefore, the issues will differ based upon a wide array of concerns at the site to be redeveloped.
B. Preliminary Inquiries
The threshold question to be asked when assessing a property for re- development as a Brownfields project is whether the site has redevelopment potential on its own merit. In other words, if the property cannot be developed in a way that makes economic sense, then the fact that a program exists which may lessen the impact of the environmental issues will not alter the fact that the property has little development potential.
Other questions that are important to consider in determining the viability of a Brownfields project revolve around the property's environmental condition and possible remediation options. In order to make an informed decision on whether to proceed, some initial due diligence on the development's environmental condition must occur.
C. Environmental Due Diligence
Information about the property's environmental condition, short of the performance of a Phase I or Phase II assessment, may be obtained from a variety of sources, including the municipality in which the property lies. In fact, local government agencies may have had some preliminary environmental investigations performed. In addition, real estate brokers may have information on the property's environmental condition. The Illinois Environmental Protection Agency ("Illinois EPA") may also have information on the property that may be obtained through a Freedom of Information Act request. (5 ILCS 140/1 et seq.) Publicly available electronic databases serve as yet another source of preliminary information about the environmental condition of the property.
In order to determine whether the contamination which may exist on the property adversely affects its development potential, it is important to determine the nature and extent of the contamination. Absent information from the local government regarding the contamination at a site, a Phase I assessment must be conducted by an Environmental Professional in accordance with ASTM E1527-13 standards or relevant federal regulations. In Illinois, the Environmental Professional must also explicitly comport with the unique Illinois requirements set forth in the Illinois Environmental Protection Act at Section 22.2(j), which are similar to, but in some places maddeningly different from, the ASTM and Federal standards. An Environmental Professional is someone who holds a professional engineer or geologist's license from a federal or state government and has three years of full-time experience, someone who has a bachelor's degree in engineering or science and five years full-time relevant experience, or ten years full-time experience. Illinois regulations further require that the environmental professional have academic training, occupational experience, and a reputation suggesting that they can objectively perform the various substantive requirements of an environmental assessment.
Here, an Environmental Professional will review a number of sources to determine the historical uses of the property, visit the site and talk to others about the property, and conduct visual inspections of the property in an effort to determine whether any "Recognized Environmental Conditions," evidence of a current release, exist. The Environmental Professional then, after careful consideration of her findings and in her professional judgment, will render an opinion as to the perceived environmental condition of the subject property.
The results of the Phase I investigation will determine whether a Phase II investigation is required. Whether to conduct a Phase II investigation is made on a case-by-case basis, depending primarily on the needs of the buyer. Considerations include, but certainly are not limited to, the type of operation(s) previously existing at the site, the future use of the property and the potential financial impact contamination may have on the development of the property. A Phase II investigation encompasses invasive sampling of the various media located at the property (typically, soil and groundwater) to determine if any contamination...
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