This month is the anniversary of a first-of-its-kind comprehensive brownfield liability relief program in Connecticut.

And, on May 9, the Connecticut General Assembly passed revisions to the act, making this unique program even more attractive to purchasers, developers and municipalities looking to return environmentally challenged properties to productive reuse. 

While government loans, grants and favorable tax treatment can be, and still are, enticements to own and redevelop these impaired properties, the nationally unprecedented benefits of Connecticut’s Brownfields Revitalization and Remediation Program are likely even more significant, particularly in the longer term. Broad and immediate liability relief as well as an opportunity to avoid significant bureaucratic red tape can make an otherwise unworkable deal workable.

In Connecticut, a brownfield is defined as an abandoned or underutilized property where the presence or potential for environmental contamination is hampering “redevelopment, reuse or expansion” at that property. The Connecticut Department of Economic and Community Development (DECD), with the assistance of the Connecticut Department of Energy and Environmental Protection (DEEP), oversees the program’s implementation. To be eligible for the program, the property must meet Connecticut’s definition of a brownfield and not be the subject of an enforcement action. An applicant must demonstrate no prior responsibility for the environmental conditions at the property. 

Currently, the program is limited to 32 properties per year. DECD accepts eligible properties following a review of a streamlined application and the consideration of portfolio factors identified in the statute. The portfolio factors are intended to assure the program accepts large and small projects and that those accepted reflect geographical diversity. 

The 2012 revisions to the program will clarify the process whereby a municipality may nominate a property for inclusion in the program, thus making that property more attractive to prospective purchasers and developers. To date, DECD has held two application rounds and issued acceptance letters; developments are moving forward.

Incentives For Developers 

In exchange for a commitment to address contamination on the property because of past releases and to pay a fee over a four-year period, the transfer of the property to the applicant is exempt from compliance with the Connecticut Transfer Act. 

Upon acceptance into the program, an eligible party immediately receives liability relief from third-party claims under Connecticut law, including claims or potential claims by adjacent and downgradient property owners. The eligible party is also relieved of any obligation to investigate and remediate any off-site impacts that are a consequence of the environmental conditions on the property being acquired. Off-site impacts, or even just the potential for same, and the prospect of the typically lengthy and unpredictable requirements of the Transfer Act frequently contribute to the demise of a promising transaction.

Among the additional benefits under the program is access to a permit ombudsman within DECD to facilitate the progress of the development. There are time frames for achieving specified milestones under the program. These milestones include the submittal of a brownfield investigation and remediation schedule, which is prepared by a licensed environmental professional retained by the eligible party. 

With the 2012 amendment, the majority of the time frames in the existing statute, including those pertaining to the payment of the program fee, commence upon the later of the date of acceptance into the program and the date of the eligible party’s acquisition of the property. This change provides the eligible party with important flexibility when structuring the transaction. 

The program fee, which is paid in two equal installments, is 5 percent of the assessed value of the land on the last-completed grand list. But there are a number of opportunities to reduce the amount of this fee, including a provision for the elimination of the second installment in its entirety, where the applicant completes the investigation and remediation of on-site environmental conditions within four years of payment of the first half of the fee.

Win-Win

The passage of the Connecticut Brownfields Revitalization and Remediation Program in 2011 is historic. The program is a win-win. There are inherent benefits for the economy, the environment and our communities. Having emerged as a result of a persuasive frustration with existing impediments to addressing brownfields, the program reflects the value of predictability, clarity and expediency to those pursuing and looking to encourage redevelopment projects. 

Public and private sectors, including notably those outside Connecticut, are paying attention. It has put Connecticut at the head of the class when it comes to innovative incentives to encourage brownfields redevelopment.

Elizabeth C. Barton is a partner with Day Pitney LLP in Hartford. Email: ecbarton@daypitney.com