Jesse Hiney is versed in all transactional and regulatory facets of environmental law. He provides advice on transactional and compliance matters for a broad spectrum of developers, lenders and other businesses. At the moment, his practice centers on environmental due diligence for complex transactions, compliance advice on permit and enforcement proceedings and the cleanup and redevelopment of brownfield and other contaminated properties.
You’ve located the perfect spot for your new or expanded brew and tasting location. You’ve identified and contracted with a suitable consultant and requested that they perform a Phase I Environmental Site Assessment. The Phase I report is issued and you learn that your ideal location is impacted by prior uses at the site. Deep breath—your deal is not dead.
There are a number of available options to address a contaminated site, and the best option for a particular site is dependent on a variety of factors. For purposes of today’s blog I’d like to set the table for the new New York State Brownfield Cleanup Program—BCP-EZ program. The Brownfield Cleanup Program (“BCP”) is a comprehensive investigation, cleanup and redevelopment/reuse program that provides incentives in the form of technical oversight, tax credits and liability relief for eligible developers to complete cleanup projects. Unfortunately, the process of completing a cleanup to the point where the tax credits and liability relief are available was often costly and always time-consuming. A revamp of the 10-year-old Brownfield Cleanup Program occurred this summer in an effort to address a number of concerns. The amendments were established in law on July 1, 2015; one off-shoot was the BCP-EZ program.
Specific details on the BCP-EZ program are not yet available. Regulations are anticipated in early 2016 with implementation of the program in the summer of 2016. However, the BCP-EZ program is expected to essentially trade the tax credit incentive offered under the full BCP for the numerous public comment periods to allow for a streamlined cleanup process with little time lost in administrative or bureaucratic delays. Upon completion of a cleanup, liability relief in the form of a Certificate of Completion and a Covenant Not to Sue would be issued by the state. For those familiar with the former New York Voluntary Cleanup Program, which was ultimately replaced by the BCP, the BCP-EZ program is predicted to more closely resemble that process.
The value of the proposed BCP-EZ program lies both in the project speed of the process and the ability to obtain liability relief. The liability relief offered under the BCP-EZ program is critical for more than just peace of mind. For any contaminated property seeking funding, a sign-off and covenant not to sue issued by the state would likely be a requirement for any savvy investor and necessary to receive financing from any lending institution.
Please keep the BCP-EZ and other aspects of the BCP in mind as you shop for your ideal location. This blog will be updated as the details of the BCP-EZ pare fleshed out by the development and promulgation of new regulations. Until next time . . .
