When the topic is brownfields cleanup and redevelopment, New Hampshire may not be a state that readily comes to mind. Most people think of New Hampshire as a rural state? not a place where contaminated industrial sites lead to urban sprawl and the economic decline of communities. And while New Hampshire enjoys a strong and growing economy, and an overall high quality of life, our towns and cities have not escaped the ill effects of brownfields.
Our state was one of the first states in the nation to feel the effects of the dawning industrial age. During the 19th and early 20th centuries, its cities and small towns grew up around textile and other manufacturing mills, which drew their power from New Hampshire's many rivers. For a time, the old mills were adapted to accommodate a changing industrial base. However, over the last few decades, as New Hampshire's economy evolved to rely more heavily on high-tech manufacturing, the mills were largely abandoned in favor of newly constructed facilities located outside of our town centers. Despite their prime downtown locations, redevelopment and reuse of these facilities has been hindered by concerns about the liability and costs associated with environmental contamination. As they fall into disrepair, many have become fire hazards and dangerous attractions. On an economic scale, they exact a heavy toll on our communities. Local jobs are lost; property taxes often go unpaid; and the mere presence of dilapidated, abandoned buildings depresses neighboring property values, and generally gives the appearance of a community in economic decline. In our larger cities, this can be a serious, and difficult problem to solve. In our smaller towns, it can mean local economic disaster. Nearly two-thirds of our brownfields sites are located in or near the centers of these small towns.
NEW HAMPSHIRE'S BROWNFIELDS PROGRAM
In order to meet the formidable challenge posed by our state's brownfields sites, New Hampshire has built an active, flourishing brownfields program. The program began in 1996 with the passage of state brownfields legislation. The legislation established the NH Brownfields Covenant Program, which provides incentives for brownfields cleanup and redevelopment in the form of liability protection. New Hampshire's brownfields initiatives include the covenant program and other state incentives, as well as initiatives funded at the federal level under CERCLA. Taken together, these programs form an integrated approach to brownfields redevelopment, which is to utilize resources available through local, state, and federal sources, as a means to leverage private investment in brownfields revitalization. This approach is implemented against a backdrop of sound brownfields cleanup policy and the need to make judicious use of public funds.
New Hampshire has received four EPA Brownfields Assessment Demonstration Pilot Grants over the last four years to perform site investigation, remedial action planning, and to generally promote brownfields redevelopment in the state. New Hampshire grant recipients include the Department of Environmental Services (DES), the Office of State Planning Coastal Program, the City of Concord, and the City of Nashua. In addition, nine municipalities have received EPA Targeted Brownfields Assessment Grants for site investigations at individual sites, four of which were administered by DES using state contractors. DES is currently working to establish a Brownfields Cleanup Revolving Loan Fund (BCRLF), under a $1.45 million EPA grant awarded to a coalition of five New Hampshire grant recipients. The recipients include DES (the lead agency), the Office of State Planning, the City of Concord and the towns of Durham and Londonderry.
Under these federally funded initiatives, more than 100 sites have had baseline environmental assessments performed. Seventeen sites have had full site investigations and associated cleanup planning performed. DES expects that an additional eight to ten site investigations will be performed during 2001. Of this universe of sites, approximately ten (10) sites have begun or completed cleanup and redevelopment.
The NH Brownfields Covenant Program mentioned above is an integral component of our brownfields redevelopment initiatives. It is designed to provide incentives for both environmental cleanup and redevelopment of brownfields sites by persons who did not cause the contamination. The program provides a process by which eligible persons can undertake site investigation and cleanup in accordance with DES requirements, and in return receive liability protections in the form of a "Covenant Not to Sue" from the N.H. Department of Justice. To date, twenty (20) sites have participated in our covenant program. Eleven (11) sites have achieved eligibility for a covenant, and the remaining sites are making progress toward that goal.
Taken together, sites that have received assistance under New Hampshire's brownfields initiatives have benefited from approximately $30,000,000 worth of redevelopment investments. In the most notable case, a 19-acre site located near downtown Concord, our capital city, has been cleaned up and redeveloped. This site was abandoned and vacant for over ten years due to concerns about environmental contamination. A local non-profit redevelopment corporation investigated and cleaned up the site under the NH Brownfields Covenant Program. The site now hosts a hotel/conference center, and two office buildings. When completely built out, redevelopment investments in the site will exceed $20 million. This project would not have gone forward without the liability protections afforded by the covenant program.
I should also note that New Hampshire law contains specific provisions addressing liability protections for lenders, municipalities taking properties by tax deed, contiguous property owners, and innocent landowners. While the adoption of these provisions preceded our formal brownfields legislation, they play a key role in our work to revitalize brownfields sites.
SUPPORT OF KEY PROVISIONS of S. 350
Title I - Brownfields Revitalization Funding
S. 350 provides significant resources to states, municipalities, and other eligible entities that may be used to provide direct grants for site cleanup. This represents a significant improvement over the existing brownfields grant programs, which provide money only for assessment and remedial planning. New Hampshire believes that these resources would facilitate revitalization of brownfields sites in our state that have languished under the existing framework. In addition, these funds will serve to augment the existing brownfields initiatives in place in New Hampshire and across the country.
Our brownfields revitalization efforts have benefited tremendously from the federal assistance that New Hampshire has received, for which we are very grateful. However, to date, resources for actual cleanup of brownfields sites have been limited to the BCRLF programs, which initially provided money to be used only for making loans. For many brownfields sites, the cleanup costs are of such magnitude that redevelopment of the site solely by the private sector is not financially feasible, regardless of whether the cleanup is financed using a low interest BCRLF loan or a conventional commercial loan. Accordingly, assistance beyond the traditional brownfields assessment and BCRLF funding is needed in order to leverage private redevelopment investment at many sites.
New Hampshire is particularly pleased with the provisions of Title I that place a priority on making grants for sites that will be developed as parks, greenways, or used for other nonprofit purposes. We have at least six sites participating in our brownfields program where the communities envision creation of public parks and greenspaces, and many others where nonprofit uses are being contemplated. One site in particular, in the small town of Bradford, is an 18-acre parcel that is located virtually in the center of town, near the main street. In their master planning process, the citizens of Bradford have identified redevelopment of the site as a park, which the town currently lacks, as the #1 priority. The Town took the bold step of acquiring the property, which has a long history of environmental abuse by the previous owner. However, given the formidable environmental problems posed by the site and modest resources of the town, financing the remediation will be a very difficult task. Greenspace development typically provides no future income with which to service debt. Accordingly, the use of loans to finance the remediation becomes impractical. The ability to provide direct grants to facilitate projects like this will provide New Hampshire with a powerful and effective tool for preserving and enhancing the quality of life in our state.
The Success of Current Federal Assistance for Cleanup
I would like to take this opportunity to comment on the great success that New Hampshire has had in integrating its brownfields initiatives with the efforts of the EPA Emergency Removals Program to address some of our worst sites. Currently, the Removals Program represents the only available direct EPA grant assistance for cleanup of non-NPL sites. The resources and expertise of this important CERCLA program are sometimes needed, in combination with traditional brownfields assistance, to protect the public and revitalize brownfields sites. In our experience, the Removals Program, when properly utilized, is the most effective and efficient tool available under CERCLA for achieving timely and protective site cleanup. While it may be beyond the direct scope of this legislation, I would offer that additional funding support, and expansion of the Removals Program's mission would be an efficient and cost effective way to substantially improve the performance and success of the Superfund program.
For some of our brownfields projects, use of the Removals Program has been the indispensable first step toward successful cleanup and redevelopment. In some cases, sites have significant environmental problems that pose imminent threats to human health and the environment. Immediate action must be taken to abate those threats. In many instances, we have called upon the expert assistance of the Removals Program to address such hazards. Subsequent to an appropriate removal action, significant environmental problems may still remain, leaving a traditional brownfields site. New Hampshire then uses its brownfields program, including federal brownfields assessment monies and our state Brownfields Covenant program to work with municipalities and private developers to successfully cleanup and redevelop these sites.
Two examples of sites where the Removals Program was needed are described below. They illustrate how direct assistance with cleanup can leverage redevelopment of sites with very significant environmental problems.
Lamont Laboratories Site, Londonderry, New Hampshire
This 5-acre site is located in the Manchester/Grenier Industrial Air Park and was most recently used by a chemical distributor for blending, packaging and storage of finished chemical products. In 1992, the business ceased operations and later filed for bankruptcy. Left behind was a plethora of environmental problems, including numerous containers of hazardous materials that posed an imminent threat to public health and the environment. In 1994, at the request of the Town and DES, the U.S. EPA Region 1 conducted an Emergency Removal Action to remove and properly dispose of abandoned chemicals from the facility, expending nearly $700,000. That same year, the Town of Londonderry acquired the property by tax foreclosure.
With soil and groundwater problems remaining, DES and EPA teamed up to perform site investigation and remedial action planning using the Targeted Brownfields Assessment program and DES's Brownfields Assessment Pilot Grant. Armed with this information, the Town of Londonderry paid for and performed the soil and groundwater cleanup and sold the property to the Londonderry Housing and Redevelopment Authority (LHRA). LHRA has invested more than $1 million to construct a facility for a long-term lessee (a nationwide car rental company). This tenant will provide local jobs and significant revenues to the Town for car registration fees for its fleet. This success would not have been possible without the assistance of the New Hampshire and EPA brownfields programs, and the significant financial assistance for actual cleanup provided by the EPA Removals Program.
Surrette America Battery Site, Northfield, New Hampshire
This 7-acre parcel is the site of a 19th century textile mill that was more recently used to manufacture lead-acid batteries. The site abuts the Winnipesaukee River and local residences. It is located in close proximity to an elementary school, a private secondary school, and downtown Tilton, New Hampshire. The activities of the battery company, which ceased operations at the site in 1994, resulted in extensive contamination of the building, manufacturing equipment, and soil on the site with lead oxide. In 1994, after the closure and virtual abandonment of the facility by its owners, DES and EPA began working to cleanup the site and abate the threats posed by the contamination.
EPA performed an Emergency Removal Action at the facility in 1995, to address abandoned chemicals and lead-contaminated soil at the facility. Following a catastrophic fire in 1998, EPA performed a second Emergency Removal Action to address heavily contaminated fire debris and additional lead-contaminated soils. Total EPA contractor cleanup costs were approximately $2.6 million. Upon completion of the removal action last fall, DES began site investigation activities under its Brownfields Assessment Pilot Grant to evaluate groundwater quality at the site, and prepare a comprehensive remedial action plan, pursuant to New Hampshire's site remediation program requirements.
The Town of Northfield has acquired the property by tax deed, and is working to sell the property for redevelopment by private developers. The Town envisions the construction of privately owned and operated elderly housing/assisted living facility, and is currently performing a reuse study using a small HUD CDBG grant. Northfield is also participating in the Brownfields Covenant program, and when the final remedy is implemented, the purchaser will also enjoy the protections of the covenant.
Given the significant environmental problems that existed at this property, the cost of cleanup far outweighed the property's value when clean. It is clear that site cleanup and redevelopment could not have been achieved without the direct assistance provided by the EPA Emergency Removal Program.
The examples described above illustrate how effective direct assistance for cleanup costs can be in leveraging private investment in site cleanup and reuse. We extend our full support for the provisions of Title I, and encourage the committee to consider our recommendation to expand the role of the EPA Emergency Removals Program in facilitating brownfields redevelopment.
Title II - Brownfields Liability Clarifications
New Hampshire strongly supports the liability clarifications provided in the bill. These reliefs in many ways mirror liability provisions that already exist in New Hampshire law. Accordingly, the clarifications will make it simpler and clearer for site owners and prospective purchasers to determine their liability exposure for a site under both state and federal law. In our experience, federal liability concerns are an important issue for prospective purchasers and developers of brownfields sites. Similarly, they are an important issue for owners and prospective purchasers of neighboring properties. We applaud these new provisions, and believe that they will help to remove a significant barrier to brownfields redevelopment in our state and across the nation.
Title III - State Response Programs
Sec. 301. State Response Programs
New Hampshire strongly supports the provisions of S. 350 that provide for assistance to states to establish or enhance their response programs. New Hampshire has a mature, risk-based site remediation program, which integrates the skills of qualified engineers, geologists, and health risk assessors to ensure that site remedies are effective, durable, and protective of human health and the environment. Further, our statutory framework, administrative rules, and legal support from the NH Department of Justice ensure that the provisions of our program are enforceable. Nonetheless, the very success of our brownfields initiatives can tax our ability to respond in a timely and effective fashion to the needs of our stakeholders. The ability to apply for additional funding to support our efforts will be extremely valuable.
New Hampshire also supports the provisions that make additional uses of this money available, including capitalization of revolving loan funds, and development of alternative mechanisms to finance response actions. We have not yet investigated the use of a risk sharing pool, indemnity pool, or insurance mechanism to finance site cleanups, but will evaluate these options to see if they would be effective in our state.
New Hampshire believes that the elements of a state response program that are outlined in Sec. 301 are reasonable and do not pose an undue hardship on the states. We strongly support the provisions that would prevent a federal enforcement action in cases where the state is appropriately exercising oversight authority. Federal liability concerns are an important issue for prospective purchasers and developers of brownfields sites. Concerns that site closure by the state alone is not enough, and that the site will be reopened by EPA, remain at the forefront of many developers' minds. While we have often been able to address such concerns using the CERCLA archive process, comfort letters, or prospective purchaser agreements, there have been many projects that have faltered due to residual uncertainty associated with liability under Superfund and the lack of finality. Replacement of these administrative approaches to the problem with definitive changes to the law should go a long way toward resolving these concerns.
Sec. 302. Additions to National Priorities List
New Hampshire supports the provision for deferral of final listing on the National Priorities List for sites that states wish to address using their voluntary cleanup programs. We recently attempted to defer such a listing in our state when we were approached by a private developer interested in performing the cleanup. After several months of negotiations with both EPA and the developer, it became clear that the project would not work financially, and we requested that EPA proceed with listing. Nonetheless, the lack of a clear process for deferral made our discussions with EPA difficult and the path unclear. While EPA Region 1 worked diligently and cooperatively with DES to address the issue, the proposed legislation would have made clear New Hampshire's right to request the deferral, and the criteria that would need to be met to sustain a deferral. Accordingly, we fully support the provisions of Sec. 302.
In closing, I would like to commend Sen. Smith and the committee members for crafting an excellent Brownfields bill. Thank you again for the opportunity to provide New Hampshire's perspective. We will follow the progress of this legislation with great interest and will be happy to respond to further questions or to provide clarification of the comments contained in this testimony. Testimony of Philip J. O'Brien, Ph.D. N.H. Department of Environmental Services Hearing on S. 350 February 27, 2001 Page 8