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The National Brownfield Summit – A Brief Recap

By David Nguyen – Staff Writer

This year’s conference is about charting the future of the CBN. (Image from CBN).

On June 13, 2018, The Canadian Brownfields Network (CBN) held their 8th annual conference, taking the form of a National Brownfield Summit. This year also marks the 15th anniversary of the 2003 National Roundtable on the Environment and the Economy report, and the cornerstone of this year’s summit was to revisit the original report and reflect on the progress since then, as well as the challenges that still need to be addressed.

Keynote Speaker

After an introduction by president Grant Walsom, the conference began with the keynote speaker Marlene Coffey, Executive Director of the Ontario Non-Profit Housing Association, who spoke about previous examples of the developments on Brownfields, including housing developed on a Goodyear Tires site, or the Vancouver Olympic village or Toronto Pan American housing facilities.

She spoke of Toronto’s current housing crisis and how costs have outpaced income for many renters due to the market response to the economic growth in the Greater Toronto Area, as well as Hamilton and Waterloo. She also spoke about how condominium development is preferred due to the pre-selling and reselling markets providing profit and equity for the developer before and during construction.  Contrast that to rental housing, where developers of must put up front all costs of development before any profits.

The city of Toronto’s plan to address these concerns include building 69 000 affordable rental units within 10 years, extending the life of 260 000 units, as well as income support for 311 000 households. In addition, the federal government launched the National Housing Strategy in 2017, with $40 billion over 10 years to support affordable housing initiatives across Canada. Coffey reports that municipality participation is key to obtaining funding for affordable housing, and a role that can be played is to donate available land for development.

Current Affairs

A series of professional presentations followed, discussing various emerging investigation and remediation techniques. These included Dr. Barbara A. Zeeb discussing the use of phytotechnologies to remediate brownfield sites. She compared the traditional method of soil excavation, transport, and disposal to phytoextraction – the use of plants to remove the contaminant while leaving the soil intact and reusable, such as using natural and native species to remove organics like DDT. Other benefits include its cost effectiveness and the uptake of greenhouse gasses, but technologies are site specific, and can take years to remediate fully – highlighting the role that phytoremediation can play alongside traditional remediation methods.

A legal update with lawyer John Georgakopoulos provided an overview of legal cases currently before the courts, with implications for the brownfield development. His presentation compared cases of regulatory liability to civil liability and about managing environmental liabilities through exercising due diligence. He noted, however, that due diligence plays a bigger role in regulatory liability and a smaller role in civil liability, and he encouraged environmental liability protections like environmental insurance and regulatory liability protection.

Cross-Country Check-Up Panelists Kerri Skelly (front left), Lisa Fairweather (centre) and Krista Barfoot (left) with President D. Grant Walsom (back). (Photo from the CBN).

A cross-country checkup with panelists from across Canada discussed the changing landscape for excess soils. Speakers include Krista Barfoot (of Jacobs Engineering Group) speaking about Ontario’s proposed guidelines on excess soils, such as the emphasis on the use of excess soil management plans and addressing issues such as situations where there is no beneficial reuse site. Lisa Fairweather spoke about the Alberta’s Remediation Certificate and its impacts on reducing barriers to brownfields development; and Kerri Skelly spoke about British Columbia’s new excess soil regulations and its goals of clarifying rules for businesses moving soil and increasing the opportunity for soil reuse.

Angus Ross (left) with Grant Walsom. (Photo from the CBN).

Before breaking up into working groups, the final presentations reviewed the current state of brownfield development in Canada. Angus Ross, who chaired the original task force, discussed how the National Strategy succeeded in addressing liability issues, financial funding, and building public awareness of brownfields. A major recommendation was the formation of a national brownfield network, which led to the CBN.

Ryerson PhD student Reanne Ridsdale presented findings on a survey of about 6,500 brownfield remediated sites across Canada, where 80 participants were polled, including environmental consultants, government officials, lawyers and financiers.

Reanne Ridsdale presenting the results of the CBN/Ryerson survey. (Photo from the Daily Commercial News).

Following was a presentation by a Ryerson student planning studio group compared brownfield policies of each province, based on criteria such as clear policies, an accessible brownfield site inventory, and incentives for development. Ontario, Quebec, and British Columbia were considered to be very progressive in their policies towards brownfield development, but improvements could still be made across Canada in terms of standardizing rules and policies and producing developer friendly guidelines for site remediation. Then PhD student Reanne Ridsdale talked about the results of the CBN/Ryerson survey of the brownfield community’s view of progress in the last 15 years. Respondents indicated that the CBN is too eastern focused on central and eastern Canada, with little presence in the Prairies, as well as being too research-focussed and not conducting enough outreach.

Charting the Future

The day was capped off with breakout discussion groups to discuss “challenge questions” and allow attendees to contribute ideas to future CBN activities to advance brownfield developments. Challenge question topics included the roles of the federal, provincial, and municipal governments, the development of a brownfield inventory, innovations in brownfield developments, and the societal impacts of brownfield development on communities. One of the key discussion points was for the CBN to promote a “Put Brownfields First” mentality, particularly within governments. This includes developing a financing model/regime for governments to support brownfield developments, particularly in smaller municipalities, as well as to harmonize rules and guidelines for brownfield development. In addition, the CBN should facilitate the education of brownfields to local communities and involve land owners and developers in the process of implementing brownfield policies.

The National Brownfield Summit provided an amazing opportunity for members and attendees to provide input towards the goals of the CBN. More information about the Canadian Brownfields Network can be found at https://canadianbrownfieldsnetwork.ca/ including the summit program and information about the presenters.

United States: EPA Soliciting Comments On BUILD Act

Article by Phillip E. Hoover and Vickie C. RusekSmith Gambrell & Russell LLP

The Environmental Protection Agency is seeking to streamline the cleanup and reuse of National Priorities List sites with an emphasis on private party participation and private investment. NPL site designation was once a popular way for affected communities to secure federal funding for remediation, but the program has long suffered from lack of funding. Now, the Trump administration seeks to streamline the delisting of NPL sites in the same manner as the redevelopment of brownfields. One example of this initiative is the Brownfields Utilization, Investment and Local Development (BUILD) Act, which was enacted on March 23, 2018, and reauthorizes EPA’s Brownfields program at current funding levels through 2023. EPA is currently developing policy guidance to implement the BUILD Act, and is soliciting comment on three of the Act’s provisions: (1) the authority to increase the per-site cleanup grant amounts to $500,000; (2) the new multi-purpose grant authority; and (3) the new small community assistance grant authority. Click here for more information about these provisions and submitting comments to EPA.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

This article was first published on the Smith, Gambrell & Russell LLP website.

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About the Authors

Phillip E. Hoover is a Partner in the Environmental and Sustainability Practice Areas of Smith, Gambrell & Russell, LLP.  Mr. Hoover’s practice includes providing counsel on numerous environmental regulatory matters, as well as the redevelopment of environmentally impacted properties. These include state and federal superfund sites, corporate mergers and acquisitions of such properties. His environmental experience includes representation of Potentially Responsible Parties at superfund sites. He has negotiated RCRA permits and corrective action plans on behalf of clients in various states.

Vickie Chung Rusek is an Associate in the Environmental Practice of Smith, Gambrell & Russell, LLP. Ms. Rusek represents clients in all aspects of environmental compliance, enforcement, permitting, and litigation, including Superfund cleanups, Resource Conservation Recovery Act compliance, Clean Air Act and Clean Water Act permitting and compliance, and environmental tort litigation.

Brownfields Road Map (U.S. EPA, 2018)

Prepared by the U.S. Environmental Protection Agency (U.S. EPA) Office of Land and Emergency Management, The Brownfields Road Map 6th Edition breaks down Brownfields site investigation and cleanup into an easy to understand, step-by-step process that provides valuable and up-to-date information to a wide range of Brownfields stakeholders involved in or affected by the redevelopment of Brownfields sites. It introduces readers to a range of considerations and activities, and provides links to online technical resources and tools.

The first edition of the Road Map, published in 1997, provided a broad overview of the U.S. EPA Brownfields Program and an outline of the steps involved in the cleanup of a Brownfields site. Designed primarily for stakeholders who were unfamiliar with the elements of cleaning up a Brownfields site, the Road Map built awareness of the advantages offered by innovative technologies. As the EPA Brownfields Program
matured, the second (1999), third (2001), and fourth (2005) editions were published to update information and resources associated with the program, innovative technologies, and emerging best practices. The fifth edition, published in 2012, streamlined the publication to make it more accessible to users, providing additional resources covering new technology applications and methods.

This edition builds off the streamlined approach of the fifth edition, providing updated content and guidance on the Brownfields remediation process. New features include an updated list of “Spotlights,” highlighting and describing key issues. This edition provides updated information on Brownfields funding and best management practices (BMPs), with guidance on how to incorporate greener cleanups and new standards into the cleanup process.

This edition of the Road Map will help:

  • New and less experienced stakeholders. The Road Map will help these users learn about the technical aspects of Brownfields by introducing general concepts and methods for site investigation and cleanup.
  • Decision-makers who are familiar with the EPA Brownfields Program but are also interested in obtaining more detailed information. The Road Map provides these users with up-to-date information about the applicability of technologies and access to the latest resources that can assist them in making technology decisions. In addition, it highlights BMPs that have emerged in recent years.
  • Community members. The Road Map helps to encourage community members to participate in the decision making process by providing information about the general site cleanup process and tools and alternatives to site cleanup, as well as guidelines and mechanisms to promote community involvement.
  • Tribal leaders. The Road Map offers information on technical and financial assistance specific to tribes for implementing cleanup and restoration activities on tribal lands, as well as successful remediation examples highlighting the potential community restoration opportunities associated with Section 128(a) Response Program funding.
  • Stakeholders who hire or oversee site cleanup professionals. The Road Map includes information to help stakeholders coordinate with many different cleanup practitioners, such as environmental professionals, cleanup service providers, technology vendors or staff of analytical laboratories. The Road Map provides these stakeholders with a detailed understanding of each phase in a typical Brownfields site cleanup and presents information about the roles that environmental practitioners play in the process.
  • Regulators. The Road Map will increase the understanding by regulatory personnel of site characterization and cleanup technologies and approaches. The Road Map also serves as a resource that regulators can use to provide site owners, service providers and other stakeholders with useful information about the EPA Brownfields Program. The Road Map also provides links and pointers to additional information on specific technologies, approaches, and issues.
  • Other potential Brownfields stakeholders. The Road Map helps other stakeholders, such as financial institutions and insurance agencies, by providing information for their use in assessing and minimizing financial risks associated with Brownfields redevelopment.

The Road Map draws on the EPA’s experiences with Brownfields sites, as well as Superfund sites, corrective action sites under the Resource Conservation and Recovery Act (RCRA), and underground storage tank (UST) sites to provide technical information useful to Brownfield stakeholders. Specific conditions—such as the nature and extent of contamination, the proposed reuses of the property, the financial resources available, and the level of support from neighboring communities—vary from site to site. Readers of the Road Map are encouraged to explore opportunities to use the BMPs described in the following pages in accordance with applicable regulatory program requirements. The use of BMPs and site characterization and cleanup technologies may require site specific decisions to be made with input from state, tribal, and/or local regulators and other oversight bodies.

 

Tracking brownfield redevelopment outcomes using Ontario’s RSCs

By David Nguyen, staff writer, Hazmat Management Magazine

GeoEnviroPro’s latest webinar event featured Dr. Christopher De Sousa, a professor and director of the School of Urban and Regional Planning at Ryerson University.  He spoke about his research using record of site conditions (RSCs) to track brownfield developments in Ontario.

Christopher De Sousa.BA, MScPL, PhD (Associate Professor, Ryerson University)

A RSC is typically filed on the Environmental Site Registry with the Ontario Ministry of the Environment and Climate Change (MOECC) after property has undergone a Phase I, and often a Phase II Environmental Site Assessment (ESA) and the property is undergoing a zoning change to a more sensitive land use (i.e., industrial to residential).  A record of site condition summarizes the environmental condition of a property, based on the completion of ESAs.

De Sousa’s research focussed on the effects of the RCS legislation since its introduction in 2004, focussing on the scale and value of projects using RSCs from 2004 to 2015 (noting the revisions to the RSC legislation in 2011).  Property Assessments and Tax information was used to determine the nature of the developments that have occurred on brownfields.  Private sector stakeholders were interviewed to determine the factors that influence private sectors to develop on brownfields.

The research showed that from 2004 – 2015, 31% of RSCs were filed for Toronto properties.  However, the cities with the greatest total area redeveloped (based on RSC filings) were Brampton and Vaughn, with Toronto having the third largest total area redeveloped. With the exception of Ottawa, projects requiring RSCs occurred primarily in the greater Toronto and Hamilton area.

Of the RSCs filed from 2004 – 2015, 24% consisted of only Phase I environmental site assessments (ESA), 69% consisted of a generic Phase I and II ESAs, and 7% used a Phase I and II ESA combined with a site specific risk assessment.

With land use changes, the most common previous land use was commercial (36.8%) followed by industrial (22.3%) and the most common intended land use was residential (67.5%) followed by commercial (14.9%).

Toronto’s development focussed on residential projects located near major transit and roadways (85.6% of which being condos).  Smaller municipalities like Waterloo and Kingston also primarily developed residential properties (31% and 58%, respectively).  De Sousa notes that provincial growth plans and community improvement plans can help municipalities be more proactive in housing and economic development goals.

From a private sector perspective, the main motivations for brownfield developments are based on real estate factors (profit, market, locations), with barriers being costs, liabilities, and time (in project reviews and approvals).

Facilitation strategies that governments can utilize involve financial and regulatory changes, particularly in more effective and efficient processes and tools in high priority areas, with perhaps more government intervening regulations in secondary/ weaker markets to encourage development of brownfields vs. greenfields.

Toronto’s Port Lands feature numerous brownfields sites, image by Marcus Mitanis

Largest Clean-up Grant in Canadian History

As reported by Laura Osman of the CBC, Councillors on Ottawa’s finance committee unanimously approved a $60-million grant to clean up contaminants to make way for a massive new development on Chaudière and Albert islands.

Windmill Development Group applied for the grant for its mixed-use Zibi project.

Windmill will clear the contaminated soil on the site, which has historically been used as an industrial site, and demolish a number of buildings.

An artist’s rendering of the Zibi development, which could receive a substantial grant from the city for soil and building cleanup. (City of Ottawa)

“These are contaminated lands on a derelict site in the city’s urban core,” said Lee Ann Snedden, director of Ottawa’s planning services.

“This truly is a poster child for a brownfield grant.

The city’s brownfields redevelopment program awards funds to developers for cleaning up contaminated sites and deteriorating buildings, which helps encourage developers to build in the core rather than the suburbs.

The grant would pay for half of the total projected cost of the cleanup.

Windmill has promised to create a $1.2 billion environmentally friendly community with condos, shops, offices, waterfront parks and pathways on the 15-hectare site, which spans both the Quebec and Ontario sides of the Ottawa River.

The city will only pay for the actual costs of cleanup after the invoices have been verified, Mayor Jim Watson said.

The developer promised to only do the work if they find contamination is present.

“It would be fantastic news for us as the proponent if there’s less contaminants there,” said Jeff Westeinde with Windmill Development Group.

The developer hopes to have the Ottawa part of the development completed in seven or eight years.

Snedden pointed out the city will not  pay to clean up the nearby LeBreton land to allow development because the land is controlled by the federal government.

But the National Capital Commission technically owned about 20 per cent of the Zibi development lands as well said Coun. Catherine McKenney, who argued the federal government should contribute to the cleanup costs.

The NCC owned the lands and had a perpetual lease with Domtar, which operated a paper-mill on the site for nearly 100 years.

“So why are we paying the cost?” asked Peter Stockdale with the Fairlea Community Association.

Some councillors received letters from constituents concerned about the large amount of money going toward a money-making venture.

Capital ward Coun. David Chernushenko acknowledged the grant was “staggeringly” large, but said someone must be responsible for cleaning up contaminated sites.

“I don’t see this as some sort of corporate welfare,” he said.

The grant will still need to be approved by city council.

Chaudière and Victoria islands seen from the air above the Quebec side.

City of Welland, Ontario and Brownfields Development

As reported in the Welland Tribune, Welland, Ontario is on top of the heap when it comes to incentivizing its brownfield community improvement programs and has success stories it can share and build off of, a consultant told city council this week.

Luciana Piccioni, president of RCI Consulting, was before council Tuesday night to talk about Welland’s draft brownfield community improvement program, an 11-year-old document in need of a review and update.

Piccioni went through four programs the city currently has in place — an environmental site assessment grant program (ESA), brownfields tax assistance program (TAP), brownfields rehabilitation grant program (TIG), and brownfields planning and building permit fees refund program — and what needed to be updated and changed with each.

“Overall, with the exception of the rehabilitation grant program, Welland’s brownfield incentive programs are still competitive. Welland is one of only a few municipalities in Ontario that offers both a development charge reduction and a TIG for brownfield redevelopment projects,” Piccioni said.

He said it’s one thing that sets the municipality apart from others in the province.

Former Atlas Steel Plant in Welland Ontario

As RCI began to update the brownfield community improvement programs, a half-dozen key stakeholders in the development industry and brownfield developers were invited to a workshop.

“That went very well … and we brought back revisions to them and they were very supportive.”

Piccioni said the stakeholders had positive responses about applying for incentive programs and said city staff were recognized as being responsive and good to work with.

The stakeholders also said the city has an open for business and co-operative mindset, but suggested increasing dedicated city staff resources to help speed up the application process.

Comments about Niagara Region with respect to the handling of brownfield and other CIP incentive programs applications were less than positive, Piccioni told council.

Stakeholders also suggested the city increase its flexibility when it comes to interpreting program requirements, allowing for unique situations to be looked at and evaluated for possible inclusion.

It was also suggested the city consider expanding and enhancing the marketing of off of the incentive programs, success stories and long-term benefits.

“You’re starting to have those success stories now,” Piccioni said, adding he expected to have a final draft ready for council to see in April.

Council heard some of the changes being made to the plans included making it harder for people just trying to get financing for a brownfield property with no intention of developing it.

Piccioni said developers would be asked to provide a letter of intent.

“It would prove to us that they intend to redevelop the property. There would be just enough hoops to discourage the pretenders and encourage the intenders.”

As of March 2017, there were 17 applications submitted for ESA grants, the TIG and rehabilitation grants, with 15 approved, two not approved and two abandoned. The total grant amount requested was roughly $560,000.

Brownfield Redevelopment in Western New York

As reported in the Buffalo Law Journal/Buffalo Business First, Gov. Andrew Cuomo designated four Brownfield Opportunity Areas in Buffalo last month, providing another tool for area stakeholders to have the areas developed.

He designated areas in South Buffalo, the Buffalo Harbor, the Buffalo river corridor and the Tonawanda Street corridor.

“These designations will equip Buffalo officials with tools and resources needed to carry out their vision of community revitalization and help turn these blighted properties back into economic engines,” he said. “This is one more reason why Buffalo remains a city on the move.”

Before the designation, the city had to submit plans for the areas, said Michael Hecker, senior associate at Hodgson Russ. “The goal is to find these areas and figure out a way for the state to work with them to help them with long-term planning on how to redevelop the sites.”

It’s a three-step grant process to determine how to revitalize a brownfield area, Hecker said.

“The first step is a pre-nomination study,” he said. “The second is step is nomination and the third is implementation strategy.”

South Buffalo Brownfield Opportunity Area (Credit: Buffalo Urban Development Corporation)

In the pre-nomination phase, a municipality and associated groups look at an area that may have an issue and explore ways to revitalize the area. In the nomination process, funding sources are considered, as well as market trends. And in the third step, implementation of the plan is identified and there’s a thorough accounting of funding sources.

“It’s a wholesome package that the state has developed as a basis to spur economic development,” Hecker said.

The three steps are completed through the New York State Department of State. Once the governor designates a brownfield opportunity area, various programs can lead to more state benefits.

“If you do your redevelopment project through a BOA, there are additional tax credits available,” Hecker said.

“It’s basically the governor recognizing that these areas have spent the time and focus on an economic redevelopment strategy and they should qualify for additional credits to spur redevelopment in these areas.”

He said the designations fit in with the city’s Green Code under Mayor Byron Brown.

“(BOAs) are a central component of our city’s Green Code initiative and my administration’s place-based economic development strategy,” Brown said in a statement.

“The State’s approval of the BOAs, created by the city of Buffalo with significant public input, places Buffalo at the forefront of brownfield redevelopment nationally and will further enhance Buffalo’s ability to compete for investment, bringing new life to even more neighborhoods by making use of underutilized properties that create jobs for city residents.”

Some of the areas will need to go through remediation in order to be redeveloped, according to Hecker. For instance, the South Buffalo Brownfield Opportunity Area, which consists of approximately 1,968 acres in an area that was once heavily industrialized by the steel industry, has sites that will require remediation.

Plans for that site include a nine-hole golf course, indoor and outdoor recreation and expansion of the Tifft Nature Preserve.

The Buffalo River Corridor Brownfield Opportunity Area also has long-standing contamination issues. It’s made up of 1,050 acres in the Old First Ward, containing 58 possible brownfield sites.

“One of the main areas of that project is restoration and enhancement of the environmental quality of the river and enhancing waterfront access,” Hecker said.

“Buffalo is lucky in the fact that it has an unbelievable natural resource with water access. Over the last 10 to 15 years, you’ve definitely seen an enhanced focus on trying to leverage that natural resource to be an economic driver. I think the city, to its credit, has done a very good job of doing that. This is just another option for them to utilize that program to benefit it.”

The Buffalo Harbor Brownfield Opportunity Area is 1,045 acres, with six brownfield sites. The area includes waterfront space at both the Inner and Outer harbors.

Assemblyman Sean Ryan said BOA designation will help with future waterfront development.

“Investing in environmental remediation prepares our communities for revitalization and renewed economic activity,” Ryan said. “Contaminated sites along our waterfront have made progress difficult over the years.”

The Tonawanda Street Corridor Brownfield Opportunity Area is 650 acres containing 46 potential brownfield sites. Plans include reconstruction of the Scajaquada Expressway and restoration of Scajaquada Creek.

Hecker said the designated areas represent places where longtime residents can see the potential benefit to redevelopment.

“One of the interesting things to me about these projects is that they really are fully integrated community projects,” he said.

Brownfield funding is available at the federal level through the Environmental Protection Agency, as well, Hecker said.

While the Trump administration has pared back the EPA, Administrator Scott Pruitt has said that brownfields would remain a priority to the agency.

“There hasn’t been any change in that area,” Hecker said.

Pruitt is focused on shifting the responsibility for contaminated sites to states, Hecker said.

“(Pruitt) wants states to work together with the federal government in a limited capacity to manage these things on their own,” he said.

“From a standpoint of economic development, especially with President Trump’s focus on infrastructure, I don’t think this is going to be a major issue unless there are further cuts in the budget. That remains to be seen.”

U.S. Federal Brownfield Legislation: U.S. House of Representatives Passes Amendments

By Walter Wright, Mitchell, Williams, Selig, Gates & Woodyard, P.L.L.C.

The U.S. House of Representatives (“House”) on November 30th passed amendments that would address the federal Brownfield program.

H.R. 3017 is titled the “Brownfields Enhancement, Economic Redevelopment, and Reauthorization Act of 2017” (“H.R. 3017”).

H.R. 3017 amends the Comprehensive Environmental Response, Compensation, and Liability Act and reauthorizes the United States Environmental Protection Agency’s (“EPA”)Brownfield Program.  The legislation appears to have bipartisan support.

Residential, commercial, agricultural and industrial properties are sometimes difficult to sell, redevelop, and/or finance because of perceived or real environmental contamination issues. Properties or facilities subject to such impediments are typically called “Brownfields.”

The EPA has defined a “Brownfield” as “abandoned, idled, or under-used industrial or commercial facilities where expansion or redevelopment is complicated by real or perceived environmental contamination.” Besides EPA, many states have Brownfield programs whose purpose is to eliminate unnecessary barriers of the redevelopment of commercial or industrial properties which may have environmental concerns. Arkansas has had such a program for several years.

H.R. 3017 makes several changes to the federal Brownfield related statutory provisions, which include:

  • Clarifies the liability of states and local units of government that take title to property involuntarily by virtue of their function as a sovereign
  • Clarifies when sites contaminated by petroleum may be considered a Brownfield site and when a leaseholder may qualify for certain liability protections
  • Expands eligibility for nonprofit organizations and for eligible entities that took title to a Brownfield site prior to January 11, 2001
  • Increases the limit for remediation grants under the Brownfields Program, establishes multipurpose grants and allows recovery of a limited administrative cost
  • Adds to the list of criteria for the grant program, whether a grant would facilitate the production of renewable energy
  • Allows EPA to provide additional funds for small, rural, and disadvantaged communities and Indian tribes
  • Reauthorizes funding for Section 104(k) of the Comprehensive Environmental Response, Compensation, and Liability Act and Section 128(a) of the same statute

A bill addressing federal Brownfield issues has also been introduced in the Senate (“S. 822”). This bill is denominated the “Brownfields Utilization, Investment, and Local Development Act of 2017.”

Issues addressed in S.822 include:

  • Funding for technical assistance grants to small communities and rural areas
  • Expansion of the scope of eligible grant recipients to include nonprofit community groups
  • Authorization of funding from multipurpose grants to address more complex sites
  • Allow certain entities that do not qualify as bona fide perspective purchasers to be eligible to receive grants (as long as government entities did not cause or contribute to a release or threaten the release of a hazardous substance at the property)
  • Direct EPA in providing grants to give consideration to Brownfield sites located adjacent to federally designated floodplains

A copy of H.R. 3017 can be downloaded here and copy of Senate Bill 822 here.

This article was first published on the Mitchell, Williams, Selig, Gates & Woodyard, P.L.L.C. website.

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About the Author

Walter G. Wright, Jr. is a member of the Business Practice Group.  His practice has focused for almost thirty years on environmental, energy (petroleum marketing), and water law.  Mr. Wright’s expertise includes counseling clients on issues involving environmental permits, compliance strategies, enforcement defense, property redevelopment issues, environmental impact statements, and procurement/management of water rights.

Mr. Wright routinely advises developers, lenders, petroleum marketers, and others about effective strategies for structuring real estate and corporate transactions to address environmental financial risks.  He also serves as General Counsel and provides legislative representation to the Arkansas Oil Marketers Association, Arkansas Recyclers Association (scrap facilities) and Arkansas Manufactured Housing Association.  A unique part of his practice has been drafting and negotiation of a variety of specialized agreements involving the sale or consignment of motor fuels along with the ancillary agreements associated with the upstream segment of the petroleum industry.

Canada: BC Court Of Appeal Rules That Contaminated Property Must Be Assessed Using Highest and Best Use

Article by Luke Dineley and Jacob Jerome Gehlen

Borden Ladner Gervais LLP

In a highly anticipated decision for the valuation of contaminated property in British Columbia, the BC Court of Appeal overturned a decision of the BC Supreme Court and set out how contaminated property should be assessed for tax purposes.

The case involved a Brownfield – a contaminated commercial property with potential for economic redevelopment. The property in question had been operated as a retail gas station, automobile dealership, and repair shop. The soil on the property was contaminated, and the contamination had spread to neighbouring properties. The owner of the property was in considerable financial distress. In addition to tax arrears, legal bills, and accounting bills, she was defending a claim from the owner of a neighbouring property. She therefore arranged to sell the property to this owner through a share purchase agreement for $42,363.24, which was sufficient to cover her debts. She also obtained a full indemnity from any legal liabilities she might have in the future regarding the contamination. The existing structure on the property was renovated and converted into income-producing multi-tenant commercial retail units.

Abbotsford, British Columbia

In 2013, the property was assessed for taxation purposes.

The assessor had valued the land and improvements at $975,000. The property owner, Victory Motors (Abbotsford) Ltd. (“Victory Motors”), appealed, and the Property Assessment Review Panel reduced that assessment to $500,000. Victory Motors appealed to the Property Assessment Appeal Board (“Board”), claiming the property had no value. The Board reinstated the original assessment. The owner appealed again, to the Supreme Court of British Columbia. That court found that the Board had erred in law, and remitted the matter to the Board for reconsideration. The Assessor appealed that decision.

The Court of Appeal allowed the Assessor’s appeal and restored the Board’s decision.

The issue before the Court was this: how does one properly assess the value of contaminated land for taxation purposes? The assessor determined that because renovation into a two-storey structure would require remediation, the best use of the property was as it currently stood: a one-storey commercial structure. The assessor’s estimate did not otherwise take into account the presence of contamination. Their approach is known as the “income approach,” whereby a property’s value is determined according to the subject property’s highest possible annual net income. The Board agreed with the assessor’s method and ultimate evaluation.

The Supreme Court, however, held that the Board had erred in law. The chambers judge found that the assessor had ignored the property’s brownfield status, which any potential buyer would have in mind as a risk. The chambers judge further held that the land should be valued not according to value for the present owner, but according to the market in accordance with the BCCA’s decision in Southam Inc. (Pacific Newspaper Group Inc,) v. British Columbia (Assessor of Area No 14 – Surrey/White Rock), 2004 BCCA 245 [Southam]. Because there was no evidence a competitive market for the property existed, the Board’s decision was therefore unreasonable.

However, after the BCSC decision was released, a five-judge division of the BCCA overturned Southam in Assessor of Area #01 – Capital v. Nav Canada, 2016 BCCA 71, leave to appeal refused [Nav Canada]. Nav Canada supports the Board’s income-based approach.

Applying Nav Canada, the Court of Appeal allowed the assessor’s appeal and restored the Board’s decision. The Court applied the “highest and best use” principle of assessment, and found that a multi-tenant retail building was the “best use” for the purposes of assessment. The Court held: “that property has value to its current owner can be a sufficient basis on which to determine its value.” In Nav Canada, the BCCA had held that even where there was no other potential purchaser, “one must regard the owner as one of the possible purchasers.” The Court in this case agreed, and held that “when, for whatever reason, there is no market for a property that has value to its owner, that owner can serve as a proxy for a competitive market.”

Going forward, property owners should be aware that even though there are no purchasers lining up to bid for a brownfield, that property may still be assessed at a high value for taxation purposes.

About BLG

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About the Authors

Luke Dineley is a partner in both our Insurance and Tort Liability Group and Environmental Law Group in Borden Ladner Gervais LLP‘s Vancouver office. Luke focuses his practice on civil litigation, with an emphasis on insurance and tort law, and environmental law.  In the area of environmental law, Luke’s experience includes representing and advising clients on a wide variety of contaminated site issues relating to both commercial and residential properties — including cost-recovery actions on behalf of plaintiffs and defendants. In addition, Luke has represented and advised major companies on environmental regulatory compliance, emergency spill responses, and environmental prosecutions. Luke is also an executive board member of the British Columbia Environmental Industry Association and frequently publishes and speaks in the area of environmental law.

 

Jacob Jerome Gehlen is an articling student at Borden Ladner Gervais LLP‘s Vancouver office. He has a Juris Doctor law degree from the University of Toronto and a Bachelor’s degree from McGill University.

Potential $9 million incentive to Developer for Clean-up and Develop Brownfield Site in Ottawa

As reported by the CBC, Ottawa city staff are proposing to offer a developer more than $9 million in incentives to build a multi-use building with three residential towers across from the future Bayview Station light rail station, approximately 2 kilometers (one mile) west of Parliament Hill.

TIP Albert GP Inc. owns the property at 900 Albert St. at the corner of Albert and City Centre Avenue, and is proposing a building that would have 1,632 residential units as well as retail and office space.

The site, a one-time rail yard and later a storage yard and snow disposal site, is eligible for the city’s brownfields rehabilitation grant program.  Under the program, developers can apply to have municipal development charges and soil remediation costs reduced, up to about half the expected cost of the cleanup.

City staff are recommending a grant not exceeding $8,255,397 over a maximum of 10 years, according to a report tabled in advance of next week’s finance and economic development committee meeting.

The property is also along the path of city sanitary and storm sewers, and for the development to go forward, the builder will have to move that infrastructure to an adjacent city property.

While the developer would pay for that work to be done, the city would have to release their eight easements on the property.

While normally the city would get market value from a developer for giving up those easements — an estimated $920,000 — city staff are proposing waiving that policy to make the project happen.

Somerset Ward Coun. Catherine McKenney, in a comment appended to the report, wrote that while she supported the brownfield grant, she couldn’t support waiving the encroachment fee, calling it “premature.”

“As this application is still under negotiation I believe it would be more prudent to measure the total monetary value to be waived against measurable features of the proposed development in its final form as ultimately presented to committee and council,” she wrote.

McKenney said such features would include affordable housing and contributions to active transportation networks like cycling and walking paths.

The development is not the only project being considered for a grant at next week’s committee meeting.

City staff are also proposing a grant of up to $2,320,420 over a maximum of 10 years to Colonnade Development Inc. to build a hotel near the Department of National Defence headquarters.

That grant, for the property at 300 Moodie Dr., would come from the Bells Corners Community Improvement Plan, which aims to encourage development in the area.

It would provide what would amount to a 75 per cent property tax break after the property is developed. If the development doesn’t happen, no grant would be paid.

Colonnade is proposing a restaurant with a drive-thru and a six-storey, 124-room hotel. Right now, the site is home to a Salvation Army thrift store, an automotive repair garage and auto parts distributor.

The finance and economic development committee will consider both proposals.

One Proposal for Development of 900 Albert Street, Ottawa