Brownfields Revitalization — A Misnomer

By Kalyn J. Johnson and Kristin L. Parker

On January 11, 2002, President George W. Bush signed the Small Business Liability Relief and Brownfields Revitalization Act (the "Act") into law. The Act amends the Comprehensive Environmental Response, Compensation and Liability Act of 1980 ("CERCLA") by purporting to provide CERCLA liability protection for prospective purchasers of brownfields, contiguous property owners, innocent landowners, and small business owners. While the Act is aimed at encouraging the cleanup and redevelopment of an estimated 500,000 to 1,000,000 brownfields across the United States in an attempt to minimize urban sprawl, the Act is of virtually no use to private purchasers of industrial properties due to: (i) the limited number of industrial sites that qualify as "brownfields" under the Act; (ii) the Act's requirement that a prospective purchaser believe, after "all appropriate inquiry," that the property is contamination-free; and (iii) the fact that the Act's protections are applicable only if specified cleanup requirements are met.

The Act turns on its head what brownfields redevelopment was commonly believed to encompass by narrowly redefining what qualifies as a brownfield. Moreover, the Act puts federal and many state laws at odds with the basic premise behind urban revitalization. North Carolina's Brownfields Property Reuse Act of 1997, for example, provides protection for either a seller or buyer who did not cause or contribute to the contamination at the property if that individual agrees to remediate the property for the proposed reuse. Under the Act, however, a prospective purchaser who wishes to limit his liability for environmental contamination under CERCLA must not have been aware, after all appropriate inquiry, of any contamination at the property.

Although the dichotomy that the Act creates may do nothing more than affect how the cleanup of a particular brownfield is financed, it almost certainly ensures that most such cleanups will continue to be financed through privately funded initiatives between willing buyers and sellers. Even though the Act increases funding for state and local programs that assess and clean up brownfields, it precludes private purchasers from receiving the benefits of such programs as those eligible to receive the funding under the Act are limited to: (a) a general purpose unit of local government; (b) a land clearance authority or other quasi-governmental entity that operates under the supervision and control of local government; (c) a government entity created by a state legislature; (d) a state-sanctioned redevelopment agency; (e) a state; or (f) an Indian tribe. Even for these eligible entities, the Act caps the amount of federal funds available to a single brownfields...