The Nickel Report

Nobody wants to live near a designated “Superfund” site. Aside from potential exposure to hazardous chemicals, the stigma associated with proximity to a Superfund site leads to loss of property value. In addition, the Superfund process is notorious for its record of protracted and expensive cleanups. In view of these well-founded concerns, a number of states have adopted voluntary cleanup programs (VCPs) as alternatives to the federal Superfund program. A well-structured and well-run VCP can keep a contaminated property out of the Superfund program while at the same time providing a mechanism for investigation and cleanup. VCPs often work particularly well to facilitate the cleanup and re-use of “Brownfields,” former industrial or commercial sites where future use is affected by real or perceived environmental contamination.

While some states run their VCPs well, others state programs flounder. A recent bad experience with a Midwestern state’s VCP caused the author to catalogue some reasons for this phenomenon. While any number of factors can be at play in a particular state, three factors stand out.

First, variations in underlying statutes can lay the foundation for success or failure. A law offering a menu of alternatives for achieving an acceptable remedy is more likely to work well than a law mandating a single set of cleanup standards. Requirements for frequent check-ins with regulators with authority to approve or disapprove submittals on no particular schedule are a bad sign for a program. In contrast, deputizing trained experts (private firm engineers, geologists and other professionals) to manage a project and certify cleanup results is often a sign of program health.

A second predictor of success is the demand for (re-)developable real estate. For example, developers in certain areas of Virginia crave properties on or near urban waterbodies. Virginia has a reputation not only as a business-friendly state but also for creating incentives for business to undertake projects. The prospects for redeveloping a Brownfield located on an urban river are enhanced substantially by the (comparatively) well-run, flexible and mature voluntary remediation program overseen by the Virginia Department of Environmental Quality. In places where there is little demand to re-use a state’s Brownfields, however, the incentives for having an efficient and cost-effective VCP are reduced.

A third factor that differentiates VCPs concerns the regulators. Their experience with the state’s VCP, their orientation either to serve or to govern, the level of their (mis-)trust toward private developers and their consultants, the attitude of their supervisors about the value of the state’s VCP, and other considerations can make or break a program. VCP staff who want their program to succeed, who may have performance or financial incentives to take sites to successful conclusions, who consider program success to be a benefit to the state or a locality can be the critical driver for a VCP.

Any number of features can make or break a regulatory program. Some are common to any administrative agency. Others are state- or VCP-specific. Above all, if the agency head does not prioritize the VCP, does not see how a good VCP improves both the environment and the economy, and does not empower staff to engage positively with project proponents, the program will have little chance of achieving the goal of streamlining the cleanup and re-development of contaminated sites.