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Rebirth of low-level polluted properties blocked by old law

April 28, 2019 GMT

Hundreds of vacant properties, many in cities that were former manufacturing hubs, but also smaller suburban buildings that might have housed businesses as mundane as dry cleaners, languish on the market for years because of half-century-old environmental regulations.

For brokers like Frank Hird of Branford, the state law called the Transfer Act is a hindrance to business. But to the state, it’s an obstacle to desperately needed economic development for properties that generated only a small amount of, if any, hazardous material.

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Hird voiced the real estate industry’s frustrations recently, when he complained about the issue to Gov. Ned Lamont. During an event in the historic Shubert Theater, Garrett Sheehan, president of the Greater New Haven Chamber of Commerce, framed the issue for the governor, at the start of a question-and-answer session with over 100 chamber members.

Earlier, in the State Capitol, Sheehan had been among a dozen supporters of the need for big changes to a 1967 state law, to help ease the sale of properties. Sitting now on a raised platform with Lamont during a breakfast-time event, Sheehan framed the issue for the governor, then introduced Hird.

“The business community has long recognized that the Transfer Act as written has been an impediment to economic growth in this state,” Hird told Lamont. “We also believe that the end result will not only be an improved economy, but many of the polluted sites around the state that have been idle for years will be cleaned up and put back into productive use.”

Lamont noted that the state Department of Energy and Environmental Protection is discussing the issue with the various stakeholders.

“I don’t care necessarily about reducing a lot of environmental standards, but I want to make sure they pass a cost-benefit analysis and I want to make sure you get an answer on a timely basis,” Lamont told Hird. “I want to make sure that we can do both: Protect our small state for the future and make sure we’re growing, and these regulations do not slow us down.”

Under bipartisan legislation pending in the state Senate, the DEEP’s three-year deadlines for assessing environmental cleanups prior to sales, could be reduced to as little as a couple of months. And while Katy Dykes, DEEP commissioner, opposed the bill during a public hearing last month, state lawmakers are hoping for a compromise in an attempt to balance environmental needs with the real estate market and economic development.

Hird serves on the volunteer group of environmental consultants, brokers, lawyers and representatives of the DEEP that has been discussing the issue with hopes for change. During an interview, he said that a recent deal he had in place for the sale of an older building on lower Chapel Street in New Haven fell through because of the Transfer Act delays.

Dry cleaners, furniture strippers, auto body repair shops

Unlike classic brownfields, where decades, if not generations of industrial waste were generated on properties, causing major headaches for developers and municipalities hoping to reuse the sites and revitalize their local economies, Transfer Act properties have histories of much lower-level pollution. Sales of sites can be held up over as little as a couple dozen gallons of waste from dry cleaning, furniture stripping or even auto body repair shops during any one-month period over the last 30 years.

“We’re one of only two states that has the Transfer Act, and the regulations in it are so stringent that it’s actually having unintended consequences and a lot of these old industrial sites and properties are just sitting there, contaminated, because of how strict the regulations are,” said state Rep. Caroline Simmons, D-Stamford, co-chairman of the legislative Commerce Committee.

“We’ve heard from a number of business owners including some legislators who have tried to sell properties or even try to clean up properties during their transactions, and they haven’t been able to, due to how strict they are and how costly they are, particularly if you’re a small business like a local dry cleaner, or looking to buy a dry-cleaning business to clean it up and repurpose it for another business,” Simmons said. “The cost of the lawyers you have to hire to meet these requirements are so great.”

The bill was recently approved unanimously in the committee.

“We’re trying to work with DEEP and the environmental lawyers to make sure that we’re all working together toward the common goal, which is to protect our environment, to make sure that hazardous substances aren’t getting into our water and air resources, but at the same time allowing businesses to comply with it in an easier way so that more properties get cleaned up and that more real estate transactions are able to take place in this state,” Simmons said in an interview.

The act requires the DEEP to verify the findings of licensed environmental professionals that cleanup standards have been met. Currently, the DEEP has two staff members who verify about 78 properties a year. An analysis of the bill by the nonpartisan Office of Legislative Research indicates that the agency would need five new staff to support a faster verification process.

Simmons said that the current procedure is so arduous that banks often withdraw their interest in lending for particular proposals. “The process is taking so long, it’s essentially killing a lot these projects, and as a result a lot of these properties are just sitting, contaminated, and it’s sort of having the opposite effect, so what we’re trying to do is just update the statute and make it more workable for both businesses and our environment,” she said

Hird agreed with Simmons that there is a lot at stake as the General Assembly inches toward its June 5 adjournment deadline.

“We also believe that the end result will not only be an improved economy, but many of the polluted sites around the state that have been idle for years will be cleaned up and put back into productive use,” Hird said.

kdixon@ctpost.com Twitter: @KenDixonCT