SB 820: SACRAMENTO EXTENDS CALIFORNIA’S BEST (REMAINING) TOOL FOR BROWNFIELD RENEWAL
By: Robert Doty & Preston Brooks
From timber country to the urban core, California is struggling to get its brownfield sites—land contaminated or believed to be contaminated by hazardous chemicals—back into productive use. The elimination of California’s redevelopment agencies in 2011-2012 set the process back dramatically, and the state’s next best tool was set to expire this year. A campaign spearheaded by the California Association for Local Economic Development and Senator Bob Hertzberg secured passage of SB 820, saving California’s Land Reuse and Revitalization Act (CLRRA) from extinction. Drawing on his experience in the group that originally drafted the statute, CCN partner Robert Doty served as the sponsors’ expert in SB 820’s legislative meetings and hearings.
CLRRA is Chapter 6.82 of the California Health and Safety Code. It was enacted in 2004 to help restore sites burdened by shoddy chemical handling and disposal practices. All too often these sites sit unused, or badly underutilized, because the legal and regulatory challenges associated with them drive development toward sites without such chemical problems—greenfields.
The “greenfields before brownfields” cycle often reinforces a downward socio-economic spiral in areas most needing economic renewal, and it broadly undermines land use and environmental policies tied to reducing sprawl. Brownfield stagnation also frustrates the state’s efforts to build more housing in urban core areas, because many sites well suited to that purpose were once occupied by business with lax chemical handling practices.
CLRRA addresses these brownfield challenges by clarifying and simplifying the liability and regulatory framework for these sites. The fear of liability for cleanup costs disproportionate to the anticipated redeveloped value of a site is typically the biggest hurdle for brownfield redevelopers, whether private or public sector.
CLRRA addresses this challenge in multiple ways, most notably by conferring on “bona fide purchasers” a statutory immunity for cleanup work beyond the “response plan” needed to make the site suitable for a proposed redevelopment. This allows brownfield redevelopers to understand what their cleanup obligations will be. Clarity on this point allows them to confirm that their cleanup costs fit within a financial pro forma that is viable to debt and equity capital sources, both. CLRRA also strengthens cost recovery leverage, another aspect of the liability framework that can be critical to the financial pro forma for complex brownfield sites.
Fear of a byzantine regulatory process that swallows resources and sanity itself is the second hurdle that must typically be overcome. CLRRA addresses this challenge by laying out a procedural path that balances interests with inherent tensions—development efficiency, scientific certainty, and public input.
In general, CLRRA starts with a Phase I Environmental Site Assessment and an agreement to pay a regulatory agency’s oversight costs. The statutory immunities trigger at this early juncture. The developer then works through four streamlined steps: site assessment, cleanup planning, public comment, and implementation/completion certification. The objective is to make the site safe for its intended use(s) as defined in local planning and zoning documents, not to evaluate and cure every conceivable issue associated with the contamination.
As with most statutes, CLRRA involved some awkward sausage making, so it has intricacies and exceptions that can be mystifying. Certain sites, for example, are simply ineligible for CLRRA treatment despite being no more and no less complex than sites that are eligible. Nonetheless, CLRRA and SB 820 represent huge steps in California’s ongoing efforts to revitalize brownfields.
Attorneys in CCN’s Environmental Practice Group routinely counsel clients on CLRRA matters throughout California. If you have any questions or need assistance, please contact Preston Brooks in Los Angeles, Robert Doty in San Francisco or any of the other experienced environmental attorneys at Cox, Castle & Nicholson LLP.
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