Reduce environmental liabilities and know the true status of your property with proper due diligence. An American Environmental Phase I Environmental Site Assessment (ESA) gives you piece of mind during real estate transactions. This assessment will provide you with information to assist in making an informed business decision. Overlooking this concern can cost you substantial future environmental expenditures, even if you did not create or contribute to the contamination.
American Environmental Assessment & Solutions, Inc is a leading environmental company providing environmental services. American Environmental offers a wide range of environmental services providing its customers with the safest and most cost effective solutions to all their environmental needs. Our services include Phase I Environmental Site Assessments (ESA), Phase II Subsurface Investigation (soil, soil vapor and groundwater investigation) remediation of contaminated soil and groundwater, NYC E-Designation investigation (hazmat, air quality, noise), soil sampling and testing, groundwater monitoring and environmental compliance.
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NYSDEC Update
On June 10, 2015, DEC formally proposed revisions to 6 NYCRR Part 375 to meet the statutory mandates in Part BB of Chapter 56 of the Laws of 2015, which amended and added new language to Environmental Conservation Law (ECL) Article 27, Title 14 – Brownfield Cleanup Program (BCP), and certain other laws. The proposal of these regulations resulted in amendments to the BCP law becoming effective on July 1, 2015.
The amendments to Part 375 are effective August 12, 2016. There are two new definitions, one for “affordable housing project” and a second for “underutilized” in 6 NYCRR Subpart 375-3 of the BCP regulations. The 2015 BCP law directed DEC to define these terms in regulation. These definitions, along with the other criteria for eligibility for tangible property tax credits (the site’s location in an environmental zone or the site meeting the statutory definition of “upside down”), will be used to determine whether a site in New York City is eligible for those credits. The “affordable housing project” definition will also be used statewide to determine a site’s eligibility for the five percent affordable housing tax credit bonus.
The “Brownfield site” definition at 6 NYCRR 375-1.2(b) has also been amended to meet the definition in the 2015 BCP law and 6 NYCRR 375-3.3(a)(1) has been deleted to conform to this definition.
In part, the 2015 amendments to the BCP law address the large differences in the potential state tax liability between New York City BCP sites and those in the rest of the State. The primary driver for the regional imbalance within the BCP is high development costs for some downstate projects, which resulted in excessive tangible property tax credits. Limiting the eligibility of New York City sites to specific affordable housing projects and underutilized properties through criteria established by regulation, in addition to sites which are in an environmental zone or “upside down,” should help target funds and projects in New York City areas with the most need. The amended definition of “brownfield site” implements a statutory amendment that clarifies DEC’s use of an environmental standards-based approach to site eligibility determinations to ensure that tangible property tax credits are only afforded to sites with actual contamination rather than potential contamination. The ‘underutilized’ definition encourages industrial and commercial development under the BCP. Properties that are not zoned for commercial or industrial use would be zoned for residential use; and while they would not qualify as underutilized, they could qualify as affordable housing, be located in an environmental zone, or possibly be “upside down.” The other eligibility pathways provide separate avenues for tangible property tax credits for residentially-zoned properties.
Read more here: Environmental Remediation – Brownfield Cleanup Program
Barnes & Thornburg LLP
Kara Cleary
March 15, 2016
When a company learns that it has a site suffering from environmental property damage, “profit” is the last thing on that company’s mind. Rather, the terms that company is more likely thinking about in this situation are those like losses, risk, environmental agency scrutiny, costly and lengthy remediation, bad press, etc. A recent article in the New York Times titled “Turning Polluted Properties into Profits” takes an alternative view of the value of sites with environmental property damage.
The article discusses a new business model and group of investors who are actively seeking out these properties in order to buy them, clean them up, and then sell them for a profit. However, as the article noted: “insurance is key.”
Finding insurance to help cover some or all of the clean-up costs is vital to the profitability of the damaged site. Because environmental property damage can exist for decades, historical insurance policies might be able to provide coverage for the resulting losses. In fact, if the site triggers commercial general liability policies issued before the pollution exclusion was common in the mid-1980s, the likelihood of available coverage is very high, assuming the insurance company is still around and paying claims.
But, like any business model – there are risks. From an insurance standpoint, there are three areas of concern:
1. finding historic coverage is not always easy or cheap
2. whether the rights under the historic insurance policies will transfer to the buyer
3. remediation may exceed the originally anticipated scope
For example, unless a company has stellar record keeping practices, often times it is hard to determine what policies a company had 40 or 50 years ago and even harder to locate copies of those policies. There are companies that specialize in this area that can help. However, it may not be an easy, speedy or cheap task.
Next, insurance companies have been known to assert that so-called “anti-assignment” clause to prevent a buyer from accessing the seller’s insurance policy without the insurance companies’ consent. Whether or not such provisions will be enforced is largely dependent on what state law will apply to the interpretation of the policy and the nature of the transaction (asset deal versus stock deal).
Lastly, remediation is often times a long process with required monitoring for many years even after the clean-up is completed. In addition, contamination of groundwater or nearby water sources may impact significantly the scope and costs of contamination and remediation. Thus, it may be very difficult to properly assess the scope of remediation initially.
Despite these obstacles, courts around the country have ruled in favor of insurance coverage for sites with long-term environmental property damage. Thinking about those damaged sites as potential profit centers is very interesting and gives companies another potential option for dealing with the issue – selling the properties to interested buyers!
This article should not be construed as legal advice or legal opinion on any specific facts or circumstances. The contents are intended for general informational purposes only, and you are urged to consult an attorney on any specific legal questions you may have concerning your situation.
The US EPA is working toward a proposed rule to add a new screening component (subsurface intrusion (SSI) component) to the Hazard Ranking System (HRS) that would allow sites with vapor intrusion contamination to be evaluated for placement on the National Priorities List (NPL).
The subsurface intrusion component would expand the number of available options for EPA and state and tribal organizations performing work on behalf of EPA to evaluate potential threats to public health from releases of hazardous substances, pollutants, or contaminants. This addition will allow an HRS evaluation to directly consider human exposure to hazardous substances, pollutants, or contaminants that enter regularly occupied structures through subsurface intrusion in assessing a site’s relative risk, and thus, enable subsurface intrusion contamination to be evaluated for placement of sites on the NPL. The agency is not considering changes to the remainder of the HRS except for minor updates reflecting changes in terminology. Read more ->
