For many years after the enactment by Congress of CERCLA (the Comprehensive Environmental Response, Compensation and Liability Act) and RCRA (the Resource Recovery and Conservation Act), the “command and control” approach utilized by the federal government and state governments to address actual or perceived environmental contamination often created barriers to the redevelopment of used industrial sites and commercial properties. This approach was often not practical, efficient or cost effective. Potential investors and lenders were fearful of getting involved in sites that could likely get tangled in a regulatory nightmare. Also, this system made it almost impossible to determine the potential liability.
In 1995, the United States Environmental Protection Agency (USEPA) recognized the need for a fresh, innovative approach and commenced their Brownfields Initiative. From this initiative grew many states' statutes aimed at the redevelopment of “brownfields.” West Virginia, to the amazement of many, followed suit. In 1997, the West Virginia Legislature enacted the Voluntary Remediation and Redevelopment Act (VRRA). The Act was designed to encourage voluntary clean-up of contaminated sites and to promote the redevelopment of brownfields in West Virginia.
In West Virginia, many sites exist in areas with industrial infrastructure. These sites can be much less costly to develop than pristine sites. Moreover, the term brownfield just doesn’t mean a former manufacturing or industrial facility. The term means any abandoned, idled or under-used industrial or commercial facility where expansion or redevelopment is complicated by real or perceived environmental contamination. As a result, brownfields could include sites such as a neighborhood vacant lot, an existing or former gas station, a former dry-cleaning business or even a residential site that had an underground fuel tank that leaked.
In a nutshell, the VRRA limits enforcement actions by the West Virginia Department of Environmental Protection (WVDEP), provides financial incentives to entice investment in brownfield sites, and limits liability under environmental laws and rules for those who remediate sites under the standards provided in the VRRA. Participation in the VRRA can be initiated by the property owner, site operator, a developer, a prospective buyer or other interested party by filing an application with the WVDEP. The major components of the VRRA Program are:
1. Licensed Remediation Specialist. Once a property has been selected for the Program, the next step is to hire a Licensed Remediation Specialist (LRS). Under the Program, all activities must be supervised by an LRS. An LRS is a person certified by the WVDEP as qualified to perform professional assessment and remediation services and to supervise the remediation of contaminated sites. The key to success in brownfield redevelopment is finding a qualified LRS who is experienced, a good listener, a good communicator, a good negotiator, and works in a cost efficient manner.
2. VRRA Application. To participate in the VRRA program, an application must be filed with the WVDEP. Each application must be accompanied by an application fee based on the size of the property, years of operation as a non-residential property and the SIC code for operations that occurred on the property. The application fee usually ranges from $1,000 to $5,000.
3. Voluntary Remediation Agreement. Each party who participates in the Program must execute a Voluntary Remediation Agreement with the director of WVDEP. This agreement must provide for the following: (i) services of an LRS; (ii) recovery of costs and a schedule of payment of costs incurred by WVDEP in excess of application fees; (iii) description of plans and documents to be submitted to WVDEP; (iv) listing of applicable environmental requirements on the site; (v) technical standards for work at the site; (vi) any engineering or institutional controls or land use convenants applicable to the site; and (vii) criteria for the reopening or modification of the agreement. Once the agreement is executed, WVDEP is barred from any enforcement actions against the applicant for the site and contamination under the agreement, unless there is an imminent threat to public health.
4. Site Conceptual Model. The Site Conceptual Model is a visual representation of the actual and expected chemicals of potential concern, the nature and extent of the contamination, the pathways for migration of the contamination, and the potential living organisms that might be exposed to the contamination. This model is the centerpiece of a voluntary clean-up project.
5. Phase I and Phase II Environmental Site Assessment (ESA). A thorough environmental site assessment is required for every site in the program. Sometimes sites can be closed under the program without conducting remediation based solely on the site assessments. The purpose of a Phase I ESA is to identify all potential sources of contamination on the site and develop an initial Site Conceptual Model. Based on the initial Site Conceptual Model, existing site data and a preliminary risk evaluation, a sampling and analysis plan will be developed. The actual testing of site soil and groundwater under this sampling and analysis plan constitutes the Phase II ESA.
6. Risk Assessment. Once the assessment process is complete, the Site Conceptual Model can be refined, and clean-up standards are developed. The clean-up standards are based on risk and therefore can vary from property to property and can vary based on the proposed use of the property. This risk based clean-up approach provides for much greater flexibility than the old “command and control” approach which essentially required creating “pristine” property. The risk assessment is used to decide whether a site needs to be cleaned-up to reduce the risk to human health, and if cleanup is needed, the extent of the clean-up. In fact, if the site assessment indicates that contaminants are present below DeMinimis Standards, only a minimal risk evaluation and limited remedial action may be necessary to obtain closure of the site.
7. Remedy Evaluation, Selection and Design. Once risk based clean-up standards are determined and risk evaluation of the site has been completed, a remediation plan is developed to meet those standards. This plan could involve treatment and/or removal of contaminants. The plan could also include engineering and institutional controls to limit migration of contamination and provide protection from human exposure and damage to the environment. In some cases, the remedy could simply involve capping the site with concrete and/or asphalt and placing legal restrictions on how the property could be used in the future. For example, restrictive covenants could be recorded in the land records that would prevent a subject site from ever being used for residential purposes.
8. Final Report and Certificate of Completion. Once the remediation plan is completed and/or the applicable controls are in place, the LRS prepares and submits a final report to WVDEP. Once the final report is approved, then a Certificate of Completion is issued. This Certificate of Completion is the document that provides liability protection to the current and future owners of the property, including banks that provide financing on the property.
So what is the point to all of this? The simple answer is that there is now a workable program in West Virginia to clear contaminated sites or perceived contaminated sites of their environmental stigma and make them safe and acceptable for development. Despite the VRRA being in existence for almost a decade, however, it is still underutilized and often simply overlooked.
The opportunities provided by the VRRA are significant. There are properties and facilities in prime commercial and industrial locations that have been underutilized or abandoned because of environmental concerns. The extent and severity of the problems may be actual or only perceived. Because of the negative perception of past use and blighted appearance, the property value is likely low. Many times, however, the perceived problem is great, but the actual problem is small. Herein lies the opportunity for those who have the tools to remove the environmental stigma from the property. If you know of facilities or properties in prime locations that have been avoided due to this stigma, there lies a possibility for great success. Through the VRRA, many properties can be processed and stamped by the state with a clean bill of health.
