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Focus on Results at Virginia RCRA Sites by Carrie Deitzel, Maria Williams and Don Niehus The long-standing belief that Resource Conservation Recovery Act (RCRA) hazardous waste facilities are not viable brownfield redevelopment sites is being challenged. Two former production facilities located near Chesapeake, Virginia, are helping U.S. EPA’s Region 3 office and the Commonwealth of Virginia’s Department of Environmental Quality (VDEQ) demonstrate that faster, more efficient environmental cleanup and redevelopment can happen when regulatory agencies think creatively and focus on results instead of procedures. Recent state and federal brownfields initiatives and legislation have encouraged regulators to focus their attention on the positive role that redevelopment can play in cleanup programs. As abandoned properties continue to languish, urban sprawl threatens to overtake open spaces and regulatory budgets shrink, government regulators are realizing that flexibility and cooperation across and among programs and jurisdictions is essential to meeting many regulatory, economic and community goals. How It All Started An award-winning pilot program initiated by the VDEQ is one example of the new collaborative climate in government. In 2004, VDEQ’s RCRA corrective action program manager, Maria Williams, contacted Denis Zielinski, senior RCRA remedial project manager in Region 3. Williams had an idea she thought would expedite the cleanup of derelict facilities and make more sites available for beneficial reuse. “The legal and environmental uncertainties associated with these old industrial properties, and the difficulty in obtaining affordable financing for assessment and remediation, cause many to overlook the potential these sites have,” said Williams. “I thought that if we could simultaneously present attractive cleanup and funding options to property owners or prospective purchasers, we might convince them to perform the required cleanups without going through the often time- and resource-consuming process of issuing a RCRA permit or a cleanup order.” Zielinski, who also manages the facility lead program in Region 3, agreed that William’s plan had promise. Simple, non-binding “gentleman’s agreements,” such as EPA’s facility lead agreements, are tools that are attractive to property owners, lending institutions and regulatory authorities alike. Facility lead agreements require no permits or court orders, as long as the parties to the agreements progress, in good faith, toward pre-determined goals. Also, the work plans can be tailored to meet specific redevelopment and construction schedules. “Everybody wins with the facility lead program,” notes Zielinski. “Industry wins by cleaning up sites faster and cheaper. EPA and its partners win by meeting RCRA requirements expeditiously and freeing staff for other projects. The communities win because derelict properties get cleaned up and made productive again. That stimulates the economy and improves quality of life.” Pilot Sites Identified Williams formed a multidisciplinary RCRA brownfield intervention team to implement her idea. The team included Dennis Lund, RCRA permitting technical expert from VDEQ; Kelly Ward, brownfield liaison from VDEQ’s construction assistance program (which administers the Virginia Clean Water Revolving Loan Fund); and Denis Zielinski. The team identified three sites with redevelopment potential in the Chesapeake, Virginia area and scheduled meetings with the facility owners. Although one facility did not end up qualifying for the pilot, the other facilities proved to be good candidates. Both sites were abandoned industrial sites that had no viable owners or operators until they were recently purchased. Truxton Development, LLC, now owns J.G. Wilson, a 25-acre former manufacturing facility. Sembilan Enterprises, LLC, currently owns the Hampton Plating property, a small former metal plating facility. Because providing comprehensive information about regulatory requirements and options was vital to the pilot success, the team invited local authorities to participate in the August 2004 initial meetings with the facilities’ stakeholders. In addition to finding out about cleanup requirements, the new owners learned about facility lead agreements and the availability of affordable cleanup funding. Local officials provided information about local requirements and incentives. Sources of Funding The affordable funding source the team presented to property owners at the initial meetings was brownfields remediation loan funding available under the Virginia Clean Water Revolving Loan Fund. Nationally, clean water state revolving loan fund (CWSRLF) programs are capitalized with state and federal contributions and the funds are distributed according to program parameters determined by the states consistent with federal CWSRLF rules. Loans are made available on a project-by-project basis at the states’ discretion. States may only make CWSRLF loans to projects which appear on their intended use plans and will help them to meet their established water quality management plan goals - protection of state waters. In Virginia, brownfield projects potentially eligible for these state loans include:
As of June 30, 2004, states nationwide had made 15,286 CWSRF loans totaling $47.9 billion to communities, businesses, non-profits, farmers and homeowners. Of these, 25 loans totaling $18.2 million were made by four states (principally Ohio) to brownfield projects. Because VDEQ initiated its brownfields CWSRF loan program in state fiscal year 2005, its loans are not yet reflected in the national numbers. For brownfield projects, VDEQ has set the interest rate for short-term loans of 10 years or less at three hundred basis points below the prime rate. A flat fee of just three percent is set for longer-term loans of up to 20 years. “These are very attractive loans for projects that private lending institutions would be hesitant to get involved in. The most recent loan we closed had an interest rate of 1.5 percent for a 10 year note,” reports Kelly Ward. Rapid Results As Williams and Zielinski anticipated, the comprehensive team approach produced rapid results. After learning all the regulatory and funding options applicable to their specific properties, Truxton and Sembilan each entered into an agreement within just 30 days of the team meetings. To date, each property owner has applied for and received approval for a state brownfields remediation loan. Sembilan will receive funding to complete a hazardous waste closure, groundwater quality assessment; excavation and disposal of contaminated soil, and decontamination and disposal of abandoned equipment. The loan is secured by a deed of trust on the property and an assignment of a lease between Sembilan and Ray Visions, the future tenant. Ray Visions will operate a clean, high-tech manufacturing plant on the former Hampton Plating property. Truxton’s much larger property includes contaminated soil and groundwater, which is being investigated. Truxton has been approved for a state brownfield remediation loan but the terms have not yet been established. This property is slated for multiple future uses (commercial, residential and open space) which fit with the city of Chesapeake’s long-term plan for the area. Based on these successes, VDEQ is planning to expand its pilot program to fifteen additional facilities. By using an open-minded approach and keeping desired results in sight, the Chesapeake pilot demonstrated that federal and state regulators, together with local stakeholders and industry, can, indeed, protect human health and the environment and preserve open spaces while redeveloping underutilized properties. BFN
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