Brownfield Law “Opens” Troubled Sites

On January 6th of this year, Governor Whitman signed into law a comprehensive set of revisions to the State Site Remediation Law. Now commonly referred to as the “Brownfields Act”, this legislation potentially opens opportunities for redevelopment of hundreds of under utilized or abandoned sites that have been contaminated by hazardous substances. In simplest terms, the Legislature and Governor agreed that some of the regulatory barriers to appropriate redevelopment needed to come down. This economically important goal was accomplished while retaining a clear declaration that the health, safety and welfare of the public and the environment remained as fundamental focuses of the legislation.
Some of the important features of the Brownfields Act include:
Innocent Purchaser Protections. After the date of the Brownfields Amendments, a purchaser who is not responsible for site contamination but knowingly embarks upon acquisition and remediation will be insulated from liability from future regulatory enforcement. This is an important issue for enticing both potential redevelopers and prospective lenders to these contaminated sites. This assumes remediation is completed in accordance with an approved New Jersey Department of Environmental Protection (“NJDEP”) remedial action plan.

Covenant Not to Sue. This provision of the Brownfields Act releases the party responsible for remediation from civil liability to the State for any additional remediation. This again assumes completion of the initial approved remediation plan. It insulates the redeveloper from the consequence of subsequent discovery of additional hazardous substances on the site. Of course, this only addresses historic contamination, not newly created problems. This provision is significant in that it can also be applicable to successive title holders and/or lessees of property.

Funding Sources. The legislation also opens up opportunities
for redevelopers to “share” the financial burdens of remediation with the State. Specifically, grant monies for up to 25% of remediation costs can be secured in circumstances that utilize innovative technology. As a preliminary matter, caps and net worth requirements must be met, but this aspect of the legislation shows clearly the zeal with which the State now seeks redevelopment of such sites.

General Regulatory Flexibility. Continuing the business oriented trend in State agencies since the start of the Whitman administration, strict application of NJDEP regulations may be waived if alternative forms of remediation can be demonstrated to be both effective and protective of public health, safety and welfare.

It is hoped that the Brownfields legislation will result in the creation of more viable opportunities for redevelopment of long ignored facilities that affect in a negative manner so many New Jersey communities. It should also aid in facilitating the Governor’s stated desire to see development in those areas where infrastructure is already able to support the growth.

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