Category: Development/Redevelopment

As noted in last week’s blog, the recently-passed Consolidated Omnibus Appropriations Act made a number of modifications to the federal brownfield program. That blog focused on the expansion of lessees’ ability to qualify for Bona Fide Prospective Purchaser (BFPP) status (and thereby obtain protection from Superfund liability). However, the Act made other changes that are of interest to brownfield site owners, developers, states, municipalities, and potential applicants for federal brownfield grant money. These modifications are found in Division N of the legislation, entitled “the Brownfields Utilization, Investment, and Local Development Act of 2018” (“BUILD Act”). They include the following: eliminating state and local government Superfund liability for sites acquired through seizure or otherwise in connection with law enforcement activity. State and local governments were previously protected only with respect to sites acquired “involuntarily”; eliminating the restriction for grants to petroleum sites that a site must be “relatively low risk” as compared with other petroleum-only sites in a state; allowing grants to be used for the cleanup of publicly-owned properties even if the public owner is not a BFPP; increasing the maximum federal brownfield grant per site from $200,000 to $500,000, which limit can be waived by EPA up to a maximum of $650,000 per site; authorizing multi-purpose brownfield grants of up to $1 million per...

The recently-enacted Consolidated Omnibus Appropriations Act made headlines in extending funding for federal government programs through September 30, 2018. Less widely noted were the myriad changes wrought by the Act to the administration of many federal programs. Among the programs affected was the federal brownfields program. The major substantive change in the Act was the expansion of the Bona Fide Potential Purchaser (BFPP) protection for lessees of properties. BFPP status exempts from Superfund liability parties who become owners or operators of facilities after the discharge of contaminants, so long as they are unrelated to parties responsible for the discharge, conduct “all appropriate inquiries” (e.g., a Phase I environmental site assessment) prior to closing, and observe certain other protocols post-closing. Until now, lessees were precluded from qualifying as a BFPP unless the property owner was also a BFPP. Now, if a lessee performs the required actions, it can obtain BFPP protection irrespective of whether its landlord is similarly exempted. This change will have a major impact on the liability exposure of lessees, particularly those who are developing and operating properties under long term ground leases. Most of the Act’s other brownfield-related provisions concern the funding of federal brownfield grants. Non-profit organizations are now eligible for such grants. The eligibility of grants for petroleum-related sites has been expanded. The...