How to Expedite Waterfront Remediation Projects: Polluters Should Pay Less and Beneficiaries Should Pay More
Any dredging contractor who has participated in tendering for a remediation project such as the Hudson River, Passaic River or Gowanus Canal is well aware of the convolutions and conflicts that arise. Many of the worst sites in the United States have been declared Superfund sites, that is, water or land that is contaminated by hazardous waste and therefore has been identified by the U.S. Environmental Protection Agency (EPA) as a candidate for cleanup because it presents a clear and present danger to human health and/or the environment.
The Superfund program, as designed in 1980, made it possible for the United States federal government to help fund the cleanup of highly contaminated sites by finding the responsible parties and following the principle of “the polluter pays.” At the present time, cleanup costs are typically being allocated using an alternative dispute resolution format consisting of both technical and legal elements. Unfortunately, as time has gone by, details about polluters are often far from known, sometimes the responsible parties have gone out of business, and at best they are difficult to hunt down.
Following this route means that often decades go by before a cleanup can be financed and then tendered for remediation dredging and disposal, and eventually development. Careful research can often help, but it never answers all of the questions and it is typical for a subset of the actual polluters to be required to pick up the whole cleanup cost.
According to Philip Spadaro, an international expert in contaminated sediment management and waterfront redevelopment, and Jason Dittman, a senior environmental scientist, both of TIG Environmental, “Gridlock is the most common characteristic of this system of funding the remediation of old contaminated industrial areas. It is simply outdated and new methods need to be explored.” Spadaro adds, “The situation in Europe is similar, though slightly different. Many national and transnational legislative frameworks have limited their authority to collect funds from the polluters by imposing ‘time bars’ on polluter liability. So while the technology and forensics for investigating and remediating contaminated sediment sites has advanced significantly over the past decade, the inventory of these contaminated sites in Europe has not significantly been reduced.” What is holding improvement back? “Both in Europe and the U.S., an outdated approach to the financial aspects of cleanup impedes progress.”
At two conference last year, Smart Rivers held in Pittsburgh, Pennsylvania, from September 18 to 21 and the SedNet Conference held from June 14 to 17 in Genoa, Italy, Spadaro and Dittman presented an alternative approach to funding large and complex projects.
The Urban Land Institute in its study, “Remaking the Urban Waterfront,” describes the history of waterfront development in this way: over decades, abandoned industrial waterfront facilities led to depressed land values, ripe for ambitious redevelopment schemes. Beginning in the 1970s and 1980s, new environmental regulations for clean water and land made waterfront property more attractive. As the historic preservation movement gained speed, preservationists looked toward protecting historic structures, many of which were located along these abandoned waterfronts. This led to citizen activism to reclaim “lost” waterfronts and a push by cities to redevelop historic regions. This, in turn, led to the revitalization of urban downtowns and the construction of residential developments with supporting services.
More and more, redeveloped waterfronts have become prime real estate, where the public can enjoy access to both water and land activities. They have become multi-purpose areas to work, live and play, places that contribute to the quality of life in all of its aspects – economic, social and cultural.
Spadaro observes, “In the next decade or so, various entities are expected to spend several billion dollars to clean up contaminated sediments in rivers throughout the United States. One commonly repeated question in the cleanup process has always been and continues to be: ‘who will pay the cost’? Answering this question is complex, primarily involving legal and technical issues but also social and economic aspects. The typical response has been ‘the polluter should pay!’
“Unfortunately, although this may be legally true, the premise has reached practical limits. The fact that most sediment contamination is derived from discharges associated with the industrial activity of the mid-20th century makes tracking down the polluter complicated.”
Cleanups of these so-called brownfield sites have typically been caught in a conundrum. While the forensic tools exist to identify sources, forcing the historic polluters to pay is not always possible. The “polluter pays” approach is hindered by legal limitations such as time bars, permitted discharges, trans-boundary pollution, as well as previously nationalized industries and so-called orphan areas where the polluters no longer exist, as well as non-participants – polluters who avoid responsibility. These obstacles can result in lengthy and costly disputes over the liability for, and allocation of, cleanup costs. In addition, sometimes stakeholders make unreasonable demands because it’s not their money.
TIG Environmental has proposed an alternative method of determining financial contributions to be used toward remediation. In practical terms this means not just looking backward to the identity of the polluter, but forward to who will be the beneficiaries of these cleanup operations.
Spadaro continues: “Too often a real estate developer will look at a site on a river that is locked in a battle for getting funds to be remediated. Since no one can get the project going, the developers can, and often do, buy adjacent real estate at depressed prices and profit enormously when the sediment cleanup takes place. This represents a benefit to third parties, the developers, who are not directly involved in the cleanup, and who should somehow be captured.”
For TIG Environmental, and for any forward-thinking port or municipality, this is an unfortunate exploitation where the local community is excluded from the full benefit of the cleanup. Dittman explains a possible alternative approach. “At several sites in the U.S. and in Europe, it might be possible to distribute some of cleanup cost to future developers of the waterfront area that will benefit from the cleanup. This approach would involve application of a concept, not unlike a typical public development authority: acquire the surrounding brownfield areas and offer them to developers at a price that reflects the value post-cleanup. The resulting proceeds from sale of the development rights and land could be used to offset the cost of cleanup.”
Dittman further notes, “This approach would of course require ports and municipalities, who are typically the managers of the waterfront in the long term, to be leaders in the waterway cleanup process. And the approach is predicated on the belief that distributing the cost of cleanup beyond the past polluters to a wider group of future stakeholders will result in better incentives to proceed with cleanups.”
Spadaro suggests that all stakeholders, including ports, industries, utilities, local and state governments and the public, should have a place at the table. That said, the formation of a “Public Development District” could provide a focal point for negotiation with regulatory authorities, as well as serve as a clearinghouse for the financing, contracting, scheduling and overall execution of the cleanup. Dredging contractors would benefit from the increased transparency and scheduling clarity, not to mention earlier work overall. Such a development authority could also ensure that the public trust values of the waterway – such as navigation, recreation, fishing and water-dependent use – would be appropriately protected and preserved. Most importantly, such a development authority could aggregate funds from both the historic polluters and future developers to pay for the cost of the cleanup. Once the remediation has taken place, redevelopment of the surrounding land can take place and the wider community can experience the benefits.
“In this way, the cost of cleanup can be allocated to a wider spectrum of interests including industry, commercial development, government and the public. It might also help bring parties together and break at least some of the gridlock currently typical at many of the large contaminated river sediment sites in the U.S.,” Spadaro said.
Each site, wherever its location, will have its own unique challenges and will require careful analysis of facts surrounding industrial and municipal discharge points and sediment deposits. Dittman points out that “cases can be developed to support the relationship between sources and deposits of pollution using modern physical and chemical investigative and forensic techniques. Careful economic analysis can reveal both profit and tax incentives that will appeal to developers and municipalities alike. Social benefits, such as better access to the waterfront and advancement of public trust values, will appeal to communities.”
The financial consequences for the dredging industry can be significant. Taking inventory of the waterfront sites that need remediation, of which there are many, dredging contractors can profit from expedited funding that move these projects forward more quickly. “By extension,” Spadaro reasons, “being able to plan dredging operations in a reliable way, knowing that funding is stable, helps with the deployment of equipment and crew and will give an added incentive to tender for such projects.”Edit Module