Lighthouse appealed a decision of the NYS Department of Environmental Conservation and the Appellate Division which denied a request that their real property be accepted to the Brownfield Cleanup Program (BCP). The Court of Appeals reversed.
The BCP program grants tax credits to developers in order to develop “brownfield sites.” A brownfield site is defined as “any real property, the redevelopment or reuse of which may be complicated by the presence or potential presence of a contaminant. Contaminants are defined as “hazardous waster and/or petroleum as such terms are defined in [ECL].”
The Lighthouse is a proposed $250 million waterfront walkable community to be located on the Genesee River. It will include condominiums, townhouses, a marina, restaurants, stores and a hotel. The proposal for the community includes 22 acre Riverfront site and a 25 acre Inland side. The majority of the Inland site was used as a landfill until the 1970s. It was listed on the DEC landfill registry until 1994 and in 1998 included on the DEC’s database of hazardous substance waste disposal sites. The Riverfront site contains “industrial waste, construction debris, sewage sludge and residential refuse.”
Lighthouse applied for both sites to be accepted into the BCP in 2006. The applications included an investigation by Lighthouse’s environmental consultant, claiming that there were elevated volatile organic compounds and methane in the soil, which needed to be addressed before residential development could be started. The Lighthouse’s consultant recommended remedial measures, which were estimated to cost somewhere between $4 – $8 million. (The estimated total cost of both sites was $2.5 million.) It wasn’t until June 2007, that the DEC issued its decision denying acceptance to BCP, stating that while there was some existence of samples that exceeded contaminant levels, most were within the proper levels, and that there was no reason to think there would be complicating factors to development. Lighthouse appealed the decision with support of the local municipalities in the area. The trial reversed the DEC’s decision, however on appeal the Appellate Division reversed the trial court, affirming the DEC’s decision.
Courts will usually defer to a governmental agency’s findings, however, the Court of Appeals in this case reversed based on the legislative intent of the BCP, the findings of the Lighthouse’s environmental consultant and the past history of the land. The court found that the DEC in the past had objected to the development of the Inland site and that the Monroe County of Department of Health suggested that the land be placed in the BCP and should have never been removed from the DEC’s hazardous waste disposal sites.
The Court also found that the legislative intent supported acceptance into the BCP. The purpose of the BCP is to “restore contaminated real property to productive use. It was shown that developers are unlikely to develop this type of land and lenders are reluctant to lend money to developers because of the financial risks that are involved. The BCP was passed in response to this problem and to encourage lending and development by increasing financial incentives and releasing liability. The court concluded that because of the legislative history, it was clear that a broad interpretation of the definition of “brownfield sites” was required and the DEC’s interpretation was too narrow.
Lighthouse Pointe Property Associates LLC v. New York State Department of Environmental Conservation, 14 N.Y.3d 161 (2/18/2010).
The opinion can be accessed at: http://www.courts.state.ny.us/CTAPPS/decisions/2010/feb10/3opn10.pdf
Thanks to Albany Law School student Kerry Costello for this post.