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Blight busting in Detroit – best of times/worst of times

29 May 2014

imageThis week, the City of Detroit rolled out its blight plan.  Of course, the national press highlighted the traditional “bad news about Detroit” story that we’ve heard for 40 years, replete with the traditional photo of the Ren Cen with a burned out house in the foreground.

The reports cite the negative big scary numbers: $850 Million to demolish most of the blight in the next five years; the City has access to about 1/2 of that; 84,641 blighted or nearly blighted structures and vacant lots, 1/2 of which should be demolished and cleaned up immediately; 93% of the properties held by governments need to be knocked down or cleaned up.

Well, that sure sounded bad but up at the Mackinac policy conference, Mayor Duggan told the most uplifting (in my opinion) Detroit blight story that I have ever heard. He talked about his goal to increase the City’s population by the end of his term – 3 years away.

Mayor Duggan talked about relighting the City’s streetlights, he talked about improved emergency response and about other issues.  But the best part of his talk was about blight. He discussed his new neighborhood approach – focusing on one neighborhood at a time; not waiting 3 years to take the properties back for taxes and, most importantly, telling owners of blighted homes to either agree to fix the homes in 6 months or lose them. Amazingly (to everyone including Mayor Duggan), many of the owners have stepped up and begun making repairs. The City has an auction site, which has gotten some national notice and, literally, thousands of people have shown up for open houses and the City has sold homes, sometimes for more than suburban homes. The Mayor discussed one neighborhood with 49 homes slated for demolition – after using his new approach, that list was cut to nine.

Certainly there are areas of the City that will need to be swept clean (and hopefully primed for redevelopment), and there are areas that won’t be addressed for a while, but the Mayor’s neighborhood program was a very uplifting breath of fresh air.

Earth Day at 44…. still crying?

22 Apr 2014

Earth Day brings me right back here

Earth Day brings me right back here

Happy Earth Day 44.  We have come a long way from the challenges and problems that led to the first Earth Day –  a 1969 oil spill in Santa Barbara, California; the dead zone in Lake Eriesmog in Los Angeles and burning rivers in the Midwest.

The first Earth Day led to the creation of the US Environmental Protection Agency and the passage of environmental laws like the Clean AirClean Water, and Endangered Species Acts.  As the EPA and its state counterparts have continued to regulate, there has been a backlash of business and media outcry which certainly impacts the public’s views.

The challenges we face today are more complex and likely more daunting than those of 44 years ago.  We still have oil spills, but they are from rail cars, pipelines, larger ships and deeper wells.  Lake Erie and many other bodies of water are still challenged by more diffuse and “below the radar” sources of contamination.  While reducing the impacts of asbestos, lead and NOx from our daily lives, and healing the ozone hole, we now face questions regarding greenhouse gasses, smog impacts from and in China unlike anything LA ever faced, and the challenges and benefits posed by fracking.

Once the “low hanging fruit” of easy cleanups were “picked,” what we were left with was less shocking or engaging than dead fish and burning rivers.  Consequently, there’s much more debate about the best way to address them or whether they need to be addressed at all.  The issues are just as important – maybe more so, but it’s unlikely that our polarized nation would agree on what changes would be best, if any.

CSI Part II – this time, it’s brownfields

14 Mar 2014

z39237120As regular readers of this blog know, initially, I was not a huge fan of MDEQ’s 2012 CSI (Collaborative Stakeholder Initiative) process aimed at refining MDEQ’s Part 201 language and rules to enable more sites to achieve closure and get out of “contamination limbo.”  Well, the process did lead to some specific recommendations and some concrete legislative changes and it appears that closures are slowly being approved more quickly and easily.
Well, not one to rest on her laurels, Anne Couture at the MDEQ decided to try and revisit the process in 2014, this time focusing on making the “patchwork quilt” of statutes and rules regarding brownfield redevelopment, incentives, grants and loans more straightforward.  A CSI II group (of which, in full disclosure, I am a part) has had its first meeting and will be working throughout the Spring and Summer. The group has been charged with focusing on the following six specific areas:

1. Legislative;
2. Core Communities;
3. Site Reclamation Rules;
4. Demolition, Lead, Asbestos, and Dredging;
5. Liability; and
6. Program Implementation.

If you have specific concerns regarding these issues or ideas on ways to improve or streamline the brownfield process or incentives, feel free to let the MDEQ know or send me an email at asiegal@jaffelaw.com and I will be sure to pass your comments on.

What will be the top green stories of 2014?

8 Jan 2014

greatlakesAs this new year kicks off, we thought we’d look ahead at what we think may be the big stories of 2014 at MichiganGreenLaw.com, in no particular order:

Wetlands – Will EPA and the Army Corps of Engineers finalize guidance regarding the scope of waters regulated under the Clean Water Act? Or will there be new rules or even new legislation?  There are members of Congress on  both sides of this issue and it is unclear which way this issue will go, although the federal trend is to try and govern as many bodies of water no matter what. This fall, EPA published a draft connectivity analysis which many view as a prelude to new regulations attempting to vest the federal government with broad jurisdictional over virtually every drop of water in the country. It will be interesting if the federal government tries to delete the “significant” portion of the Rapanos “significant nexus” test.

• Hydraulic Fracturing –  this continues to be a lightning rod for controversy.  At the end of 2013, the Associated Press reported on both alleged and confirmed environmental problems in 4 states including Ohio and Pennsylvania.  Michigan looks to beef up its oversight of, and its communications regarding, fracking proposals and operations.  The University of Michigan continues to study the technical issues.  The focus on this issue seems to be shifting toward the volumes of water used in fracturing and monitoring withdrawals used for oil and gas production. It appears that the 2012 U.S. Department of the Interior draft rules for fracking on federal and Indian lands remain draft – will they ever be finalized?

• MDEQ Brownfield Process Streamlining.  MDEQ has promised to convene a short-term task force to work on harmonizing, improving and streamlining the various funding mechanisms currently used to incentivize brownfield redevelopment. This can only be a plus.

• MDEQ Cleanup Rules – as required by the Legislature, MDEQ proposed adopting its previously informal standards as formal cleanup rules late in 2013.  The MDEQ will continue to work on improving and in some cases broadening its cleanup rules and criteria – we expect more work on the assumptions of exposure underpinning the standards, more work on vapor intrusion standards and more work on standards and processes applicable to groundwater venting into surface waters.  MDEQ also continues to discuss more rules and standards defining what constitutes “due care” which is an issue for property owners who are not liable pursuant to a BEA and for other reasons.

• Keystone Pipeline.  As we predicted, President Obama and Congress continue to be locked in a politically charged dispute over the Keystone XL pipeline, a proposed 1,700-mile oil pipeline from Canada to Texas.  The President deferred it and lately the pundits have argued that pipelines are safer than transporting shale oil by truck and train.

• Energy Policy In Michigan – at the end of the year, and after a year of “listening” sessions and collecting information, Governor Snyder indicated that he intends to seek legislation improving Michigan’s energy policies, focusing on lowering costs, improving reliability and minimizing environmental impacts.  This will be interesting.

Will 2014 be the year that Michigan Brownfields take off?

30 Dec 2013

brownfieldFor the last 20 years, we have seen the innovative and aggressive Michigan brownfield liability and redevelopment laws move redevelopments forward.   While some of these projects have been big, all of them have been what I like to characterize as “low hanging fruit.”   This makes sense because, for all the incentives available, at the end of the day, if you rehab a building that no one wants to occupy, the incentives available won’t make the difference.  While not easy to redevelop, these sites have been redeveloped while other major environmental sites (either very large, very contaminated or in less desireable locations) continued to lay fallow.

So, it is logical that downtown Detroit and areas of Ann Arbor and Grand Rapids and Lansing have seen major brownfield redevelopment pushes and that smaller projects in outer ring suburbs with sound economies have also benefited from the State’s brownfield programs.

But now, we have some major projects that are not “low hanging fruit.”  The Packard Plant is paid for and soon will be owned by a Brazilian developer with big plans. He calls it the “best opportunity in the world” and he sounds serious.  Work on the long-stalled Uniroyal site is reportedly moving forward.  DTE recently sold its Marysville Michigan Plant to a St. Louis developer with experience in Brownfields.  There has been talk for years about Detroit looking at Turin Italy as a model for post-industrial redevelopment and the TV show, Morning Joe recently came to Detroit to tout its urban revival.  I saw this article about the creative redevelopment of a Spanish cement plant, and now I wonder whether we will see this sort of investment and creativity in Detroit and southeast Michigan brownfields which are not the easiest of sites to redevelop.  If so, it will be a very exciting time in Michigan.  Michigan clearly has the supply; now it is time to see if there is sufficient demand.

New ASTM due diligence standard – Deadline to comment on EPA approval – Due Diligence Part 4

12 Sep 2013

A bucolic scene or something more ominous and will your Phase I ESA tell the difference?

Monday, September 16, 2013 is the last day to comment to EPA on a proposed new standard for environmental due diligence – ASTM E1527-13.  EPA has said that it will not require anyone to use the 2013 ASTM standard and that consultants may continue to use the current standard, ASTM E1527-05.

The challenge of the moment is that ASTM has not released the 2013 standard to the public and so only the EPA and the ASTM committee working on it know precisely what’s in it.  EPA has prepared a summary of the changes, found here.  Of particular note are the following changes (which is not a comprehensive list):

1. An updated definition of “Recognized Environmental Condition (REC)” aligning it with CERCLA’s direction to identify “conditions indicative of releases and threatened releases of hazardous substances on, at, in, or to the subject property.”

2. An updated definition of “Historical Recognized Environmental Condition (HREC)” tying it to past releases that have been somehow addressed to allow unrestricted residential use. A new term “Controlled Recognized Environmental Condition” includes past releases where some contamination remains in place but no cleanup is presently required.  Further, ASTM clarified that a CREC should not be called a  “de minimis” condition. As to the terms, I care less about what the consultant calls things than in understanding why they were or were not included in the report.

3. ASTM included vapor migration as a migratory concern to be identified in a Phase I. This continues to grow in prominence as an issue to be wary of.

4. ASTM revised the scope of the “User Responsibilities” section to clarify the aspects of a site assessment investigation that may be the responsibility of the report’s user (often the proposed purchaser), and not necessarily the responsibility of the environmental professional. This reflects my point about reading the whole report and not just the conclusions.

5. ASTM provided a standardized framework to verify information obtained from key databases.  Agency file reviews are expected to increase Phase I prices but also confidence that users, or prospective buyers can place on site assessment results.  This is something that I’ve been asking consultants to do for years. Merely relying on a database service has always been something of a tricky proposition.

Ultimately, if the new standard is more effective, the lending community will compel its use and while EPA says that either method is acceptable to satisfy CERCLA’s all appropriate inquiry standard, economic efficiencies (think Betamax and VHS) will lead to one method surviving.

Due Dilligence Part 2 – Picking the Consultant

24 Jul 2013

You’re not exactly what we’re looking for but….

In my prior post, I discussed the need for proper due diligence.  Today, I will explain how to pick the “environmental professional” who will conduct most of that work.

The federal All Appropriate Inquiry (AAI) Rule describes an “environmental professional” appropriate to conduct the inquiry as “someone who possesses sufficient specific education, training, and experience necessary to exercise professional judgment to develop opinions and conclusions regarding conditions indicative of releases or threatened releases of hazardous substances on, at, in, or to a property, sufficient to meet the objectives and performance factors of the rule.”

Once you’re sure that your environmental professional (for brevity’s sake, I’m going to use the term “consultant”) meets the minimums (listed below), you need to be sure that they will apply your risk tolerance – and understand your goals.  The importance of this step should not be underestimated.  As with any service professional, you need to be comfortable that the consultant will give you the service you expect.

Typically the consultant should be retained by your attorney for at least two reasons: (1) to try and shield the results as privileged; and (2) to ensure that you are properly protected in case the consultant errs.  This last point bears repeating – do not sign anything authorizing the consultant to proceed without consulting an attorney. 

Many consultants’ form contract limit the consultant’s liability in ways which render you effectively at your own risk.  If you sign without the assistance of counsel, you’ve given up all leverage to get favorable terms from the consultant.  These contracts are negotiable and, depending on market forces and your urgency, you may not get the best deal possible, but your lawyer should help prevent you from being at the mercy of a form drafted entirely in the consultant’s favor.

As I often say to consultants, “if you went to a surgeon and they asked you to agree before surgery that you could not sue them no matter how negligent they are, would you go through with it?”  Your attorney should also check to see that the consultant is properly insured.

The Minimums – be sure to ask if your consultant meets these standards. If they don’t – look elsewhere.  The AAI Rule states that the consultant must have:

• A state or tribal issued certification or license (typically a Professional Engineer’s (P.E.) or Professional Geologist’s (P.G.) License) and 3 years of relevant full-time work experience; or

• A Baccalaureate degree or higher in science or engineering and 5 years of relevant full-time work experience; or

• 10 years of relevant full-time work experience.

State- or tribal-licensed or certified individuals also must have the equivalent of 3 years full-time relevant experience to qualify.  Individuals who do not hold a license or certificate may still qualify through educational and experience requirements.