Environmental Law

UECA's Impact on Site Specific Cleanups

By M. Joel Bolstein

Does the Uniform Environmental Covenants Act (UECA) recently signed into law by Governor Rendell require that environmental covenants be recorded on adjacent properties when the remediator seeks to attain the Site Specific Standard on a property where groundwater contamination is migrating off-site?  That, my friends, is a very real issue that is being hotly debated.  You can read all of the information posted on PADEP's website regarding the UECA and not find the answer to that question.  Yet, it may be the most significant issue arising under the UECA and how the Department answers that question may very well determine the continued use and viability of the Site Specific Standard at sites involving off-site migration.  

The way it works now, and has worked for the last eleven years, a remediator can demonstrate attainment of the Site Specific Standard at a site with groundwater contamination migrating off-site by doing a fate and transport analysis and showing that there is no impact on drinking water or surface water and demonstrating that vapor intrusion is not an issue.  The remediator in that case would, after completion of the attainment sampling, publish a notice of the remediation in the local newspaper and submit the Final Report for review and approval to PADEP.  In addition, under Act 2, the remediator would record a deed restriction stating that the groundwater on his or her property should not be used for drinking water purposes.  Such notice would be recorded only on the property being remediated. 

Here is a hypothetical showing how this issue may arise.  Let's say you are a developer looking to purchase a shopping center that has, among other things, a dry cleaner.  You decide you want to do some soil and groundwater sampling to determine if there is any contamination.  You find that there is PCE in the groundwater at the property.  You determine that the shopping center and all properties surrounding it are on public water and there are no drinking water wells.  You also determine that there is a local ordinance prohibiting the installation of any new drinking water wells.  Your consultant takes two rounds of samples and does a fate and transport analysis and determines that while PCE in the groundwater is migrating off-site, it isn't impacting any drinking water wells or surface water.  Your consultant also determines that the PCE levels are below the threshold of the vapor screen so there is no vapor intrusion issue.  Now your due diligence period is about to expire, and you, as a buyer, need to decide whether or not you want to proceed with the transaction.  You ask your consultant to give you a scope of work and cost estimate to complete the Act 2 process and get a release of liability.  Your consultant says that you will need to do 8 quarters of groundwater samples and then file a Final Report under the Site Specific Standard.  Now you remember that one of your lawyers mentioned that Pennsylvania recently adopted the Uniform Environmental Covenants Act and that you heard that in order to get an Act 2 release in this situation you might have to get the owners of the adjacent properties to agree to place environmental covenants on their properties because the plume has moved off-site.  You worry if that is true you could get to the end of the process and any one of those adjacent property owners could say no and prevent you from getting your Act 2 Final report approved using the Site Specific Standard.  Is that a real concern?

From what I have been hearing, it sounds like it is.  The alternatives to using the Site Specific Standard in that hypothetical are not very good.  You could install a treatment system or use some treatment technology to try to get to the statewide health standard for PCE, which would probably be so expensive it would kill the deal. (It also would be unnecessary given that there is no risk to public health or the environment).  You could also go ahead and try to buy the property without getting an Act 2 release, but your lender may require that you agree to get the Act 2 release as a condition to obtaining financing.  You had big plans for upgrading and expanding that aging shopping center, but maybe it just isn't a good deal anymore.

How the Department interprets the UECA will effect not just future deals, but past deals as well that involved using the Site Specific Standard.  What about the developer that bought that shopping center a few years ago and now is being told that he or she needs to convert the deed restriction that was imposed on the shopping center property into an environmental covenant?  Will that person have to go to those adjacent property owners whose properties sit above the plume and ask for permission to put environmental covenants in the deeds for those properties?   If those adjacent property owners refuse, would the Department require the shopping center owner to remediate to the statewide health standard or lose the Act 2 protection to a reopener?  It's hard to believe that the drafters of the UECA would have intended a result that could have such a chilling effect on brownfield transactions and the use of the Site Specific Standard under Act 2. 

One of my fears is that the wrong interpretation of the UECA may lead people away from brownfield properties, especially those in highly urbanized areas.  How would anyone be able to gather environmental covenants on all the adjacent properties effected by groundwater contamination at a property in the middle of Philadelphia or Pittsburgh?  Why would anyone even want to get involved with such a project with that level of uncertainty? Some of those sites may qualify as non-use aquifers, but many others will need the flexibility afforded by the Site Specific Standard.  If you remove that flexibility, developers of properties in those urban areas will look elsewhere, most likely to greenfield sites in suburban areas, leaving those brownfield sites blighted and unreclaimed, and for no good reason.      

PADEP has not yet released any written guidance on how it will enforce the UECA beyond a short summary and a model covenant on its website.  Nevertheless, I have heard from several consultants that Department staff in the tanks program has told people that in order to demonstrate attainment of the Site Specific Standard on a site with groundwater contamination migrating off site, you will need to obtain environmental covenants from each and every property owner whose property is above the plume of contamination.  Because such an interpretation would result in a significant and material change to how Act 2 cleanups have been conducted in the Commonwealth since the Act 2 regulations were first adopted in 1997, I would hope that the Department would handle this like any other new policy and seek public comment before moving in that direction.  This is a matter of great significance for the Act 2 program.  Accordingly, the Department should follow its policy on policy development and prepare a draft policy for public review and comment, obtain public comment from all affected parties and stakeholders, and then release final guidance after due deliberation. 

The Act 2 program is one of the most successful environmental programs in the history of the Commonwealth.  For many years, the redevelopment of brownfield sites has been the engine driving economic development in the Commonwealth.  At this point, it is unclear where PADEP ultimately will come out on this.  The annual Environmental Law Forum is next week in Harrisburg and I am sure this issue will be discussed.  If the Department's representatives provide any further guidance on the subject at the Forum, I will let you know. 

Full post as published by PA Brownfields Environmental Law on April 01, 2008 (boomark / email).