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CSI Part II – MDEQ rolls out brownfield tax increment financing proposal – five major changes you should know about

11 Nov 2014

moneyAs you may recall from this spring, I was asked to serve on MDEQ’s initiative to  review and improve the “patchwork quilt” of statutes and rules regarding brownfield redevelopment incentives, grants and loans.  A CSI II group (of which, in full disclosure, I chaired the Legislative Committee) met regularly over the Spring and Summer and MDEQ has announced two meetings (see the attached flyer) to roll out the proposed changes. These changes have not yet been introduced in the Legislature and thus, are currently only an MDEQ internal recommendation. The hope is that these changes will be introduced shortly.

if passed, these proposed changes should streamline, simplify and speed up the process for loan, grant and TIF approvals to enable projects to get started faster than ever before while supporting a greater range of eligible activities than previously available.

There was some tension between those championing redevelopment and those focusing on environmental remediation but ultimately, there was agreement on a set of changes and clarification of the rules and statutes to clarify the process for obtaining loans, grants and tax increment financing for brownfield redevelopment.  The five most significant changes include: (more…)

Lake Erie – so is it Ohio’s fault?

22 Aug 2014

t1_11246_1533_LakeErie_143_250mThe recent shutdown of Toledo’s water system due to an algal toxin in the water caught everyone’s attention.  Our friends at Dragun note that the Toledo water problem was triggered by some odd weather, but the algal source problem remains out there.   The MDEQ announced this month a five point plan to protect the lake: (more…)

Toilet to Tap? I don’t see overcoming the “ick” factor any time soon

2 Jun 2014

drinking_waterAs drought conditions settle in across much of the United States, some communities are beginning to look at the concept of “water reuse,” which sounds very conservationist.  Generally it means so-called “grey water” reuse where water that’s been used once (such as for laundry or car washes) is reused for other non-potable purposes. It also means the capture of rainwater for irrigation (think the barrels that some people have at the end of their downspouts). (more…)

But they already did a phase I….

2 May 2014

cautionWhen a seller or lender gives a prospective buyer a phase I environmental site assessment (ESA) and it concludes there are no recognized environmental concerns, that means you’re “good to go,” right? Well, not so fast.  There are some things to check on which include:

1.  When was the ESA performed and to what standard?  Standards have changed over the years and if the ESA is 6 months old or older, parts of it will need to be updated.  Sometimes ESAs done for lenders don’t include all the elements a buyer must include to satisfy the All Appropriate Inquiry standard.  It is also possible for much older ESAs, that circumstances may have changed and you’re better served just starting over.

2.  For whom was the ESA prepared and can you rely on it?  Most ESAs were prepared for a specific client and often include a limit on who can “use” them.  There’s no certainty on whether a use limit actually prevents you from relying on an ESA to assert the innocent landowner defense but it is likely that such a limit would prevent you from seeking recourse from the consultant that prepared it, if it turns out to be inadequate.

3. Even if you can rely on it, will the consultant stand behind it?  Often, consultants will “let” you rely on their old ESAs for a fee.  The question to ask is – is it worth it? I have seen consultants attempt to contractually limit their exposure to $50,000 or their available insurance or their fee whichever is less!  I have also seen consultants say that they will only be liable for direct losses and will not be liable for so-called consequential losses such as lost value or revenue.  This means that the consultant will only be liable for the actual harm (breaking things or hurting people) they cause and not for any errors or oversights they make in actually doing their work!

In short, there are many pitfalls to relying on a so-called “clean” prior phase I and the list above only scratches the surface.  We still live in a caveat emptor world and you, as buyer, need to take steps to beware.

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.

New river protection regulations on the way?

14 Feb 2014

After the non-stop coverage of the spill into the Elk River in West Virginia, we are seeing reports of a spill of 82,000 tons of coal ash into a North Carolina river. The subject of coal ash has lain dormant for a while but this Duke Energy spill is like opening an old wound.  As our regular readers know, EPA has proposed new rules for coal ash storage in the wake of a  Tennessee spill in 2008.  There was another spill in Wisconsin in 2011 and the rules languished. Given this week’s coal slurry spill in West Virginia, rivers in the southeast might be feeling like endangered species.

This fall, a citizens suit was filed in West Virginia federal court (unrelated to the Elk River case) and at the end of January, the EPA agreed to issue coal ash rules by December 19th of this year. Whether the rules treat coal ash as a hazardous waste, a non-hazardous waste or some combination of the two, remains to be seen but it appears that some regulation of this reportedly second largest waste stream in the country will be implemented.  As I have blogged before, Michigan already has more river-protective regulations than many other states and it is about time that these other states are brought up to a higher standard to prevent these major spills.

We have started to realize just how important our rivers are and whether it’s bad luck or bad stewardship, we appear to be on a path to get the regulations needed to protect them.

Why not a regional water system?

10 Feb 2014

1280px-Detroit_GM_headquartersThere have been a flurry of recent articles about Oakland and Macomb Counties refusing to sign on to Mr. Orr’s plan for a regional water authority.  Mr. Patterson has been quoted as saying no deal is better than a bad deal and how can one disagree with that?  However, a regional authority is clearly the right move and every single one of the players at the table should know it.  It was the right move for the Zoo, Cobo Center, the DIA and now for the water and sewer systems that we all use in southeast Michigan.

What’s infuriating is that we all know this, but it seems less than clear that such a system will be implemented.  The current system needs infrastructure upgrades which are likely to be very expensive.  These costs need to be paid so that wastewater can be treated and safe drinking water provided.  The current DWSD also has legacy costs relating to its employees.  Mr. Orr’s plans (the public hasn’t seen them yet) reportedly have the region paying more for service to fund operations and upgrades and paying to lease the system – as if the system was some sort of corporate asset.  This seems a bit peculiar when you consider that the system is undercapitalized, under siege from newly forming competition and barely able to stay in compliance with its permits and various legal requirements.  If it needs a reported $2-$4 Billion in upgrades, it’s no longer an asset and is going to need every penny it collects just to operate. It will not be a cash source for the City and I am not certain that it should be.  The City’s initial investments are long sunk and its failure to keep the system up for the last 40+ years means that its value as an asset is minimal.

Oakland and Macomb want more information and I can’t blame them; but, given what we know about the recent history of Detroit, I wonder if that information exists.  If the City isn’t providing it, I suspect the Bankruptcy Court would be willing to help shake that information loose if it exists.

As for the legacy employee costs, I wonder if the City can pursue the same strategy that GM used and create a voluntary employees’ beneficiary association (VEBA) of some sort to fund employee benefits.

The time to establish a regional water authority is now. Will it happen?  As I have said before, both the economic and environmental health of this region depend on clean water and our water-rich position (unique to Detroit except for Chicago, Milwaukee and Toronto) make it imperative that we get this right and soon.