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Early success of site cleanup effort gives life to polluted property Builders: Success of LSRP program is a reason to develop in contaminated areas

By , - Last modified: August 13, 2012 at 2:31 PM

River Drive Construction President Joe Langan has spent years turning away projects that sit on polluted sites, which often were destined for lengthy and unwieldy cleanups overseen by state regulators. But a program that puts those cleanups in the hands of private-sector consultants has caused him to change his approach in recent times.

The state's initiative, known as the Licensed Site Remediation Professional program, in 2010 prompted Langan and a partner to acquire a Montvale office property that had been contaminated by pesticides. Within four months, Langan and a remediation firm cleaned the site, allowing the team to sell it to an adjacent property owner early this year.

"If it wasn't for this program, the property would still be sitting there with contamination — and vacant," said Langan, who partnered with First Evergreen Properties on the project. "So it's a good thing, for sure."

The program has allowed private-sector cleanup experts, commonly known as LSRPs, to take control of nearly 9,000 polluted sites. And three months after a key milestone, stakeholders and regulators say the program is up and running, with both groups focused on tasks they hope will help bring the effort to its full potential.

The LSRP program was created as part of a 2009 reform to clear the Department of Environmental Protection's backlogged caseload. Under the law, which phased in the program over nearly three years, thousands of site owners and parties responsible for contaminated sites were required to hire cleanup consultants by May 7.

Since then, DEP officials and stakeholders say the pool of permanent LSRPs has started to take shape. In May, about 220 consultants who had been working with temporary credentials passed the state's first licensing exam, giving the test a 78 percent pass rate.

Anyone who failed will be able to take the exam in the fall, as will the 300 consultants who still have temporary licenses, said David Sweeney, the DEP's assistant commissioner for site remediation. That could leave New Jersey with between 500 and 600 permanent LSRPs — below expectations from when the program started, according to Ken Goldstein, president of the New Jersey Licensed Site Remediation Professionals Association. But while there are thousands of polluted sites, he said the program's three-year phase-in period has helped quell concerns that the LSRPs in the program would be overwhelmed by multiple cases.

"The LSRP is supposed to review and be familiar with the project, but they don't have to collect every sample and oversee every field exercise," said Goldstein, also a director at Ransom Environmental. "They design work plans and they have staff implementing them, which is not really any different than it was before, in terms of a management hierarchy."

The DEP, meanwhile, is turning its focus from compliance assistance to enforcement, Sweeney said. Up until the May 7 deadline, the agency had sent out thousands of letters, called site owners and appeared at industry events to help push enrollment. The efforts were especially fruitful in the final days — by the end of May, more than 8,800 sites had retained an LSRP, Sweeney said, up from 5,200 at the beginning the month.

But about 2,240 sites are still without a consultant, leaving their owners or responsible parties in the DEP's crosshairs for enforcement action, he said. To help determine which sites to focus on first, the agency has developed a remedial priority scoring system, or RPS, which rates and ranks the cases based on their level of risk. Sweeney said enforcement action can include litigation.

"In reality, as we apply things like the RPS, if I see there's a high-risk site that's out of compliance, I don't have a lot of options," he said. "I'm pushing that site."

Sweeney also said the DEP expects to find some sites that have no viable responsible party. The department will refer those cases to federal regulators, or use funds from a set of state programs to remediate them, starting with sites that have higher RPS scores.

Despite the positive and impactful early returns, stakeholders say the LSRP program remains a work in progress. Goldstein, the head of the LSRP association, said environmental consultants require more guidance on technical issues. For the time being, there's still plenty of debate among LSRPs about how to complete their cleanups.

"That will eventually work itself out, but admittedly, that's going to take a little bit of time," said Goldstein, the LSRP for about 25 cases, ranging from underground storage tanks to hazardous chemical spills at dry cleaning businesses.

He noted the DEP has been responsive to individual queries on technical issues. And now that the program is up and running, Sweeney said the agency will be refining and clarifying its remediation standards over the next year or so.

A few gray areas still exist for the development community, said Richard Ericsson, who chairs the environmental department of the law firm Cole, Schotz, Meisel, Forman & Leonard P.A. An LSRP's review not only needs to pass muster with the DEP, he said, but also with future buyers of the property and their own environmental consultants.

Buyers and sellers also must account for a three-year period that the DEP has to audit an LSRP's work, which looms especially large as the agency refines its cleanup standards.

"If you have a transaction or a contract, you have to draft around an audit period," said Ericsson, who also co-chairs the Regulatory Affairs Committee for NAIOP New Jersey, the commercial real estate trade group. "That statute says three years, so who's going to be responsible for what if this gets overturned?"

But despite the remaining kinks in the program, Ericsson said the new framework has "been a sea change" for the real estate industry. He credited the DEP for the "herculean task" of implementing the program, which can shave months and even years off of development projects.

"The speed with which this can get done now is a big improvement for business development in New Jersey," he said. "I don't think anyone can argue anything to the contrary."

E-mail to: joshb@njbiz.com
On Twitter: @JoshBurdNJ

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