One of the more daunting tasks of environmental consultants and lawyers is to explain the environmental investigation and remediation process to clients and the public. Part of the problem is that many business people do not have a strong science foundation and may not understand some of the issues associated with environmental contamination. In addition, the investigation and remediation contamination process often does not proceed in a logical or linear manner. Clients often become frustrated because it seems that they are spending lots of money and do not seem to be making process.

The New York City Office of Environmental Remediation has completed a wonderful 8-minute video that explains the site investigation process. Every environmental consultant should have the link to this video readily handy to share with clients. The video is available at: http://www.nyc.gov/html/oer/html/Videos/investigations.shtml

The landmark NYC brownfield program demonstrates the economic benefits of brownfield programs.  The Office of Environmental Remediation (OER) which is responsible for administering the program has calculated the benefits of the first 47 projects that enrolled in the program.

The OER analysis indicates that these projects generated city revenue of $369 MM  on a 30- year net present value (NPV) while state revenue is estimated at $310 MM 30 Year NPV. The revenue generated to the City includes Income Tax, Property Tax, Sales Tax, and One-Time Revenue (Remediation and Construction, Sales Tax on Materials, and Mortgage Recording Tax). Revenue to the State includes the same set excluding Property Taxes because they are collected on a local level.

To further improve the value of the program to applicants, OER  is working with the state legislature to obtain a state liability release for sites remediated in the city program (currently OER has an MOU with the DEC) and elimination of state hazardous waste fees for material removed from city voluntary sites. Both are available for state program.
 

In Queens W. Dev. Corp. v. Honeywell Int’l, 2011 U.S. Dist. LEXIS 91795 (D.N.J. 2011), the plaintiff developers commenced remedial activities at two parcels that were accepted into the New York State Department of Environmental Conservation (NYSDEC) Brownfield Cleanup Program (BCP) and Voluntary Cleanup Program (VCP). Plaintiffs filed a lawsuit against the defendants as successors to the responsible parties to recover response costs that plaintiffs estimated to meet or exceed $20 million

Defendants filed motion to dismiss the CERCLA § 113(f)(3)(B) contribution claim, private nuisance and restitution claim. The court granted the defendants motion to dismiss the contribution claim because the state BCP and VCP agreements were not administrative or judicially approved settlements under  section 113(f)(3)(B) because the agreements did not resolve CERCLA liability. Instead, the plaintiffs alleged that they “have resolved, or will resolve, their liability to the State of New York.”.

The court also dismissed the private nuisance action. While the parties disputed whether New York or New Jersey law applied, the court said it did not have to resolve that issue because both states confined  private nuisance to situations where one’s property use interferes with another’s use of neighboring or adjoining property but that successor landowners could not maintain private nuisance actions against prior landowners of the same property.

The court declined to rule on the restitution claim depending on the outcome of the CERCLA private cost recovery claim under section 107(a)(4)(B).

Section 198(a) of the Internal Revenue Code allows owners of qualified brownfield sites to deduct their cleanup costs in the year they are incurred. To qualify for this deduction, the owner must obtain a certification from the state where the site is located that the site qualifies as a brownfield.

The NYC Office of Environmental Remediation announced today that all sites that are remediated under the NYC brownfield program will be eligible for the IRS 198(a) deduction. Under an agreement with the NYS Department of Environmental Conservation, an owner who remediates a site under the NYC Brownfield program will receive the certification that it would have received if the cleanup had been done under state oversight. 

Owners of NYC brownfield properties will be able to take the 198(a) deduction even if they receive a brownfield grant from NYC. The grant will be considered income for federal tax purposes and basically can be added to the cleanup costs for purposes of the deduction. More information is available from the NYC brownfield site on our Helpful Links page.