Commentary: Overcoming Impediments to Public Agency Acquisition of Brownfield Sites

Abstract

As Congress begins to entertain proposals to reauthorize the Environmental Protection Agency Brownfields Program, local governments will be paying particular attention to one issue: a proposed amendment to grant public agencies greater liability protection when they acquire contaminated property. Supporters contend that cities play a unique role in brownfield redevelopment—acquiring, cleaning up, and repositioning properties that are unlikely to attract private investment either because of depressed neighborhood conditions or because the properties are being held off the market by corporate mothballing practices. Current federal law offers minimal and confusing liability protection for these activities, and the result is that many cities pass over brownfield acquisitions for fear of engendering environmental liability. Those cities that proceed with brownfield acquisitions are rolling the dice in favor of community revitalization but also argue that federal law should be more protective. To rectify these issues, several states have adopted liability reforms that establish a more “causation based” liability scheme for local government acquisitions. A number of groups are advocating for similar reforms at the federal level. Acquisition of contaminated land by public entities is also often complicated by the complexities involved in eminent domain. First, if the acquiring agency lacks the authority to gain access to the site and cannot perform a site assessment prior to taking possession, fiscal concerns are heightened because cleanup costs will not be taken into account in determining fair market value. Secondly, the acquiring agency may not be allowed to deduct cleanup costs from fair market value, so the locality will, in effect, pay twice for cleanup costs. This article explores the statutory issues related to public agency acquisitions, focusing particularly on state reforms and exploring whether particular state liability reforms might serve as a model for a federal liability reform.Environmental Practice 11:311–319 (2009)