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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.

Would a tax by any other name smell the same? Funding in the age of austerity

26 Aug 2013

As demands for municipal services increase, costs go up and tax revenues flatten or fall, what is a municipality to do?  In most places in Michigan, politicians have decided that even to suggest more taxes is the kiss of death.  For example, everyone agrees Michigan’s roads need work.  Governor  Snyder proposed increasing the gas tax and registration fees some 8 months ago and it has gone nowhere.  Some legislators are talking about asking the voters to approve an increase in the State sales tax to 7% – this might come before the voters next year.

So, when municipal governments try to fund environmental initiatives, like managing stormwater (required by federal law), what is a municipality to do?  Well, the cities of Lansing, Jackson and Detroit have all adopted stormwater “fees” which are based on the paved acreage of various properties within their jurisdiction.  Clearly, to the municipalities, this seems like a good idea – otherwise, why would they keep doing it? Reportedly, nine Michigan communities have created stormwater utilities to impose such charges (Adrian, Ann Arbor, Berkley, Chelsea, Harper Woods, Jackson, Marquette, New Baltimore, and St Clair Shores).

Unfortunately for them, the Michigan Courts keep striking them down as illegal taxes.  In the recent case of Jackson County v City of Jackson, Case No. 307685, the plaintiffs challenged a stormwater management charge imposed by the Jackson City Council. The Court of Appeals ruled that the charge was a tax imposed in violation of §31 of the Headlee Amendment to the Michigan Constitution. The court held that the charge: (1) did not serve a regulatory purpose because it shifted funding of certain activities from the general fund to the charge; (2) was disproportionate to the benefits conferred upon the payor as there were no payor-specific benefits; and (3) was not voluntary because there was no way to avoid the charge by doing, or not doing, something.   The Court of Appeals cited the 1998 case of Bolt v Lansing, 459 Mich 152 (1998), which invalidated a similar stormwater charge on similar bases. Ultimately, both courts held these “charges” to be taxes subject to, and failing to meet, Headlee Amendment requirements.

Interestingly, one City, Adrian, has reportedly voted to refund the fees it collected.

Will the Detroit “fee” fall to a similar challenge? Every case is different but the recent history would indicate yes – if the City wants to have a stormwater “charge” based on acreage, it will have to go to the voters and make the City’s case.  Otherwise, the City will have to fund these expenses out of general funds.

 

Top Green Stories of 2012

31 Dec 2012

As we race toward the end of the year, we thought we’d look back at what we thought were the big stories of 2012 on MichiganGreenLaw.com, in no particular order:

Wetland Rules – EPA and the Army Corps of Engineers submitted final guidance to clarify the scope of waters regulated under the Clean Water Act to the Office of Management and Budget for federal interagency review. The EPA and the Corps have been the subject of “inquiries” from Congress, industry organizations, environmental groups, states and the public for rulemaking to further clarify the requirements of the Clean Water Act consistent with decisions of the Supreme Court. We continue to wait.

Fracking– something that was little heard of before 2011, received a lot of notoriety as dueling reports were released and a flurry of rules and guidance including: an EPA rule to require well developers to institute “green completion” procedures which phases in over the next two years; EPA guidance when diesel fuel is included as a component of the fracking fluid used to free the trapped gas; and U.S. Department of the Interior draft rules for fracking on federal and Indian lands.  The comment period closed in September and the Department recently announced that the rules would not be finalized until sometime in 2013. Finally, the petition drive to amend the State Constitution to ban the use of horizontal hydraulic fracturing fell flat and did not make the ballot.  Given the voters’ response to Constitutional amendments and in particular, how Proposal 3 relating to the clean energy renewable portfolio standard failed, it seems likely that this would’ve failed too.

MDEQ reorganization – the Director shook up the staff at the MDEQ. There was a CSI process intended to streamline the cleanup program and, in the last month, the Department’s cleanup division got a new chief, Bob Wagner, and the Governor signed legislation that was developed in part through the CSI process.

EPA Greenhouse Gas Rules vs. Congress. – a federal appellate panel approved EPA’s rules under the 1990 Clean Air Act  aimed at coal burning power plants.

• Coal Ash – Hazardous Materials – while EPA had proposed rules to more heavily regulate ash from the combustion of coal, it ran into a political buzz saw and the regulations went nowhere.  Luckily, the coal industry avoided the sorts of accidents that plagued them in 2011.

Keystone Pipeline.  As we predicted, President Obama and Congress started 2012 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, catching some election year heat, and will likely have to deal with it again in 2013.

Governor Snyder focuses on Environment/Energy – at year’s end, the Governor issued a policy statement on these two interrelated issues and we expect next year to see a focus on improvements in both.

Change at the EPA? Lisa Jackson announced on December 27, 2012, that she’d be stepping down as head of the EPA early next year.

 

Detroit – ground zero for discussion of cumulative effects?

24 Sep 2012

Recently, the Detroit chapter of the Sierra Club wrote to ask the EPA to require evaluations under the National Environmental Policy Act (NEPA) address cumulative effects of NEPA decisions for the State of Michigan.  Apparently, the request seeks to have EPA include both environmental and socioeconomic effect in such evaluations.  If EPA were to take up this gauntlet , it could be a paradigm shift that would reverberate across the country.

NEPA was one of the first laws written establishing a national framework for protecting the environment. NEPA’s basic goal is that all branches of the federal government consider the environment before undertaking any major federal action (people remember the spotted owl and snail darter but not why – they were species that were thought to be at risk from NEPA regulated projects).  NEPA requirements are invoked when airports, buildings, military complexes, highways, parkland purchases, and other federal activities are proposed.  Environmental Assessments (EAs) and Environmental Impact Statements (EISs) evaluate the likelihood of impacts from alternative courses of action and are (i) required from all Federal agencies and (ii) often the most visible NEPA requirements.

EPA has, for some time, recommended that agencies conducting a NEPA analysis consider cumulative impacts from a proposed action, take into account likely future actions as well. However, the focus of that evaluation was primarily on environmental impacts. The Sierra Club appears to ask for the quantum leap of requiring consideration of socioeconomic factors such as income, racial composition and health impacts. This would add an “environmental justice” aspect to the NEPA analysis that was not previously present. The request focuses on southwest Detroit, which is home to a number of heavy industrial operations due to its history and close proximity to shipping and rail lines.

Cumulative impact analysis, particularly focusing on future actions, tends to be more subjective and speculative than the rest of the NEPA evaluation and is harder, less accurate and more subject to challenge.  If EPA were to go in this direction, one can only imagine the number of economic developments that would come to a grinding halt while these even more subjective issues are hashed out.

Sand Dune Protection vs. Private Property Rights

12 Sep 2012

Last month Governor Rick Snyder signed legislation amending Part 353 of the Natural Resources and Environmental Protection Act, Michigan’s Sand Dunes Protection and Management Law.  Of Michigan’s 275,000 acres of sand dune formations, 70,000 acres of the most sensitive dunes along the shorelines of Lakes Michigan and Superior are designated as “critical dune” areas.  One-third of the critical dune areas are privately owned.

 The amendment broadens the rights of private property owners in critical dune areas to allow construction of driveways to access their homes and allows permitting structures on the lakeward face of a dune in limited circumstances.  The amendment requires owners within a critical dune area to obtain a permit from the local unit of government in which the critical dune area is located or the Department of Environmental Quality, depending on the situation, prior to construction.  Notice of a submitted permit application is required to be given to anyone that makes a written request for notification of pending applications. The local unit of government may hold a public hearing on pending applications.  A public hearing pertaining to the permit application is required if two or more persons who own real property within 2 miles of the proposed project make a written request for a hearing.

 Proponents of the amendment believe that it will resolve deficiencies in the current law that put Michigan at risk in lawsuits over private property rights but some believe the amendment could expose critical dune areas to irresponsible development.  In the end they may both be right. 

 What do you think?

For details of the amendment visit here.   For general information on Michigan’s coastal dunes here.