The 1980 Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA or "Superfund") law attempted to handle the complicated problem of determining who had caused contamination by making any owner of a site liable for clean-up costs of "any release or threat of release of hazardous substances." While this law encouraged industry to handle hazardous materials more carefully, reduce waste generation overall, and pursue pollution prevention technologies at their facilities, it also made developers and lenders extremely unwilling to work with potentially contaminated sites, for fear of being saddled with a huge clean-up bill for someone else's pollution.

CERCLA liability is applied:

"Strictly": Liability without fault or negligence. Thus a recent owner of a property can be held liable for CERCLA clean-up costs even though he or she was in no way involved with the contamination.
"Jointly" or "Severally": When there is more than one responsible party, the government can hold one or all of the parties liable for the entire cost of the clean-up.
"Retroactively": Parties can be held responsible for contaminations that occurred before CERCLA in 1980, even though the activity was legal at the time.

Many observers say strict interpretation of CERCLA contributed to the abandonment of many mildly contaminated sites. Fearing liability, high costs, and potential risks associated with the sale of property, many owners prefer to leave the facility as it is rather than place on the market. This practice, called "mothballing," makes it difficult for even a willing developer to acquire some brownfields sites.
In an effort to alleviate some of these problems, regulatory agencies have adopted measures that provide liability relief for certain interested parties. These include:

The "innocent landowners defense." This 1986 amendment to CERCLA frees those individuals or organizations that "did not know and had no reason to know" of any contamination at the site from liability. To qualify, the new owner of a property must have undertaken "all appropriate inquiry" into the previous ownership and uses of the property at the time of acquisition, "consistent with good commercial and customary practice."
Lender liability relief. Also called the "secured creditor exemption," provides that as long as a lending institution does not participate in managing of a facility, it cannot be liable under CERCLA for contamination simply because it holds an ownership interest to secure the loan.

United States v Fleet Factors Corp.

This case was often used as an explanation for why lending institutions are so apprehensive about loaning money or owning brownfields sites. In the United States v Feet Factors Corp., a judge ruled that a lender could be liable under CERCLA if its involvement with a facility's management is "sufficiently broad to support the inference that it could affect hazardous waste disposal decisions if it so chose." The bank was liable for clean-up costs because it owned and operated contaminated collateral after foreclosure.

Source: Northeas Midwest Institute

Voluntary Clean-up Programs (VCP). Many states have instituted VCPs, whereby owners of a contaminated site agree to pay for the site investigation and remedial actions necessary for future use, granted they receive technical aid or protection from liability.
Comfort Letters. These give prospective purchasers the comfort that no further enforcement action will be required once the appropriate clean-up is conducted.

Giving Comfort

In southern Vermont, the redevelopment of the Holder-Leonard Mill was in limbo for several years while the EPA debated whether the site should be listed on the National Priorities List (NPL)--a register of the country's most serious hazardous waste sites. Mase Securities International (MSI), a tenant in hte Holden-Leonard Mill, was eager to purchase teh site but would not proceed until all environmental and liability issues were resolved. Since April 1996, after EPA Region 1 indicated that no further steps would be taken to list the site on the NPL, MSI moved forward to make significant renovations to the historic building and created over 200 new jobs in Bennington.

Source: Northeast Midwest Institute

Liability relief can be a powerful tool in jumpstarting long-stalled redevelopment projects. It is not without its dangers, however. Environmental health and justice advocates have pointed out that each step, especially voluntary clean-up programs, reduces the ability of residents to hold companies accountable for past or future contamination or shoddy remediation jobs.

Difficulty Obtaining Financing

The financing section discusses some of the challenges that communities face regarding financing brownfields. Because of the real or perceived threat of contamination, coupled with liability concerns, many lenders have had a hands-off approach to brownfields.

"Brownlining"

A term given to lending practices of institutions that avoid doing business with properties that they perceive to carry an environmental risk. Also known as "environmental redlining."

Redeveloping brownfields can become more expensive than unused "greenfields." Banks are often reluctant to lend money for a site that can be greatly devalued and potentially very expensive to remediate. If a practice like capping-covering the contamination with layers of concrete-is to be used, it may also be costly to maintain the site in a safe state. As a result of these fears, lending institutions often engage in "brownlining"- avoiding lending transactions based on a fear that the land is contaminated.

Though it is difficult, in many cases a creative mix of public and private funding sources, liability protection measures, and options such as seeking land donations, have allowed brownfields redevelopment to go forward.

Confusing Regulatory Process

Some states have multiple agencies that oversee brownfields clean-up at the local, state, and federal level. The assortment of agencies often causes confusion and delays, as stakeholders grapple with which agency handles what. Additionally, many of the state and local agencies are overworked and lack financial resources to oversee the clean-up of smaller brownfields sites, further frustrating the process.
Identifying the various regulators who have jurisdiction, involving them early on in the process, and understanding as much as possible about the regulations so the regulators' work is easier can help to smooth this process.

Ambiguous Clean-up Standards

The degree of clean-up is tailored according to proposed use, whether industrial, commercial, or residential. For example, for a commercially zoned property risk factors must be reduced to one in 10,000, leaving some potential contaminants. On the other hand, for residential use the number is one in 1,000,000. A site designated for mixed-used development can be especially confusing and the developer will need clearance from state regulators on the differing levels of clean-up for a site.

Official standards are also not always in line with what residents or potential users of the site consider acceptable risk. For those sites that are truly contaminated, balancing the values of health, safety, and redevelopment is a major brownfields challenge.