Real Estate Quarterly — Can Government Really Get Results Sitting on Sideline?

0

When it comes to cleaning up highly polluted sites, the common perception is that the government comes in, knocks heads together and forces the property owners to clean up, or cleans up the property itself.

But with so many thousands of contaminated sites dotting the L.A. landscape, it has largely been up to private property owners and developers to come up with the money and technological know-how to clean up the sites and put them back into productive use, with relatively minimal help from government.

The government typically only takes over when the property owners who caused the pollution can’t be found, or when the pollution is so bad or the progress so slow that public health is threatened. In those cases, the pollution is so severe and circumstances so complex that it typically takes years even decades to get the sites cleaned up.

As a result, environmental experts say, the government has largely missed the boat when it comes to speeding the turnaround of contaminated sites, also known as brownfields. This is especially true in the inner cities, where large tracts of land often lie vacant for years because no one can find the will or the means to clean them up.

“In general terms, the government has been very slow to date in trying to turn brownfields into productive sites,” said Chris McNevin, a partner in the environmental practice at the L.A. office of Pillsbury, Madison & Sutro.

To some extent, this has been by design. Government policy, especially at the state and federal levels, has been primarily driven by the notion that the polluter should pay for the cleanup.

“As the laws have been enforced over the years, the private sector has picked up more of the responsibility for site cleanup, especially with brownfields,” said Grant Ferrier, president of Environmental Business International, a San Diego-based firm that consults to the environmental industry.

Private-sector worries

However, until very recently, the private sector has been somewhat skittish about getting involved with brownfield sites, primarily out of fear of liability and the sheer difficulties involved in cleaning up often long-abandoned sites. Only in the last couple of years, as land values have risen and anti-growth sentiment has again surfaced in outlying communities, have private investors begun eyeing opportunities in these brownfield sites, Ferrier said.

This trend has been facilitated somewhat by new voluntary cleanup programs at the local and state levels, where government agencies offer their seal of approval on privately funded and operated cleanup plans.

Meanwhile, many sites have languished in limbo when there should have been a more concerted effort to clean them up, environmental experts say. The primary reason: a lack of money.

“There are simply so many sites, thousands of them in L.A. County, where businesses operated lawfully at the time they created the contamination that no one can pay for now,” said Judith Praitis, head of the environmental practice group at the L.A. law office of Sidley & Austin. “These are big problems that were created during the boom years of the 1940s, ’50s and ’60s that we are paying for now.”

In fact, there are so many sites that the private sector can’t or won’t clean up that the government has a longstanding policy of prioritizing them: Only those with extreme levels of contamination or that pose substantial health threats to the public get full government attention.

That’s how the federal Superfund program got started in 1980, in response to the environmental catastrophe that unfolded at Love Canal in New York in the late 1970s. To date, more than 1,800 sites have been designated under the Superfund program, with 100 of those in California. In L.A. County, there are about a dozen Superfund sites, including huge groundwater basins in the San Fernando and San Gabriel valleys.

“We get involved in the largest, most hazardous sites, because of the magnitude of the danger or because of a lack of progress at sites we deem most hazardous,” said Randy Wittorp, spokesman for the U.S. Environmental Protection Agency’s Region IX office in San Francisco.

Trouble for the EPA

But the Superfund program got bogged down in the late 1980s as the government tried to hunt down polluters to pick up the cleanup costs, using a “joint and several liability” approach. Companies that thought they had been targeted for more than their fair share of cleanup costs fought back in the courts, often tying up cleanups for years.

“The federal Superfund program has unfortunately run into the legal profession head on, with more than one-third of the money going directly into the hands of attorneys,” said Sheldon Kamieniecki, chair of the political science department and director of the environmental studies program at USC.

The state has its own Superfund program, which has a somewhat lower pollution threshold to qualify. It has not been tied down as much by legal issues as by a general lack of funding. With hundreds of sites throughout the state (48 in L.A. County alone), there simply isn’t enough money for the state to rapidly clean up each one.

Neither the state nor federal Superfund program tackles head-on another major problem: the sheer number of so-called “orphan sites” which have long ago been abandoned by the owners that caused the pollution. It is these sites that environmental experts say should receive public funds. Often it’s the current owners of the sites that end up footing the bill, even though they didn’t cause the pollution.

Meanwhile, at the local level, the city of Los Angeles has tried to address its brownfields problem, obtaining several million dollars in federal grant monies and setting up its Genesis L.A. inner-city development fund in part to address brownfields.

Several of the 21 Genesis L.A. sites are being cleaned up with government dollars, including the Crown Coach site in East L.A. The former railway site, which was once the proposed location for a state prison, received federal funds for the site cleanup. It is now slated to become part of an expanded produce mart.

No posts to display