Notes from the meeting held on Wednesday, March 20, 2002

5^th Floor Planning Department Conference Room

Edwin L. Crawford County Office Building

Present: Stacy Merola, Joanna Corey, Kenneth Kamlet, Chip McElwee, Ron Brink, Cindy Westerman, Doug Garner, ________. Guest Experts: Frank Evangelisti, Mary Brophy (NYS DOT), Bob Murphy, Tom Suozzo (NYS DEC), Susan Cummins, Bernadette Blaisure (NYSEG), Joe Moody (Town of Union), Bob Sweet (ESD), Joel Boyd (Binghamton), Dee Golazeski (Johnson City), ______. AWE: ______

1. The meeting convened at 4:35 p.m. On a motion from Ron Brink, seconded by Cindy Westerman [?], the minutes from the last meeting (February 20, 2002) were approved with a typographical correction requested by Ken.

2. Announcements/Member Items of Interest:

(a) Ken distributed copies of his just-published article (which appeared in the Winter 2002 issue of the New York State Bar Association’s The Environmental Lawyer), “Brownfields Regulation in New York State: A Disappointing Report Card.” He also announced the availability of a new website on New York brownfields issues: http://www.ny-brownfields.com. This site includes a section on the activities of the Brownfields Subcommittee which is password-protected to limit disclosure of sensitive deliberations relating to preliminary or incomplete data. (The password will be made available to Subcommittee members after Stacy has had an opportunity to review the BFSC section.)

(b) Ken also passed around copies of a recent Press & Sun-Bulletin editorial criticizing the City of Binghamton for not foreclosing on several West Side properties belonging to the McMahon estate and presumed to be contaminated. Included was a letter to the editor, defending the City, submitted by Ken [the letter was published on March 28, 2002].

(c) Ken mentioned that he had spoken earlier in the day to the DEC Administrative Law Judge researching the issues in his Freedom of Information Law Appeal seeking the release of Voluntary Cleanup Program Internal Procedures. The ALJ indicated that his recommendations had gone up to the Assistant Commissioner who will be making the decision on March 14^th. He said that he had found arguments for public disclosure of the document “compelling,” but that the Assistant Commissioner was not bound to adopt his recommendation.

3. Guest Speaker: David Stoner of S&W Redevelopment, Syracuse, NY:

The group welcomed David Stoner, CPG, President of S&W Redevelopment LLC (“S&W”), with headquarters in Cazenovia, New York. Mr. Stoner is a former Chair of the Onondaga EMC. S&W Redevelopment is a member of the Stearns & Wheler Companies (with offices in several New York locations, Connecticut, Massachusetts, Maryland, and North Carolina).

Mr. Stoner came to speak about S&W’s program of entering into “partnerships” with the City of Syracuse and other local governments to characterize and remediate “brownfield” sites (broadly defined to include petroleum-contamination properties) in return for a share in the “profits” associated with reselling the cleaned-up brownfield site for redevelopment.

S&W has also assisted the City of Syracuse in its (successful) efforts to obtain an EPA Brownfields Assessment Demonstration Pilot pilot program grant.

Mr. Stoner described four projects in detail. A project typically begins with S&W’s negotiation of an “agreement in principle” with the municipality (or private entity). To be a viable candidate site, S&W must be able to identify a plausible “end user” of the site (i.e., who will be willing to purchase the cleaned-up property). The site (and the nature of the contamination) must also be suitable for negotiation of a Voluntary Cleanup Agreement with DEC (and eventual receipt of a formal Liability Release from DEC).

The key elements of the four projects discussed can be summarized as follows:

a) Liberty Street Project: ~0.25-acre gas station which was $258K delinquent in City taxes. S&W conducted a Phase II Environmental Site Assessment, developed cleanup cost estimates, and negotiated a “transfer value” estimate with the City. (The “transfer value” of the property is essentially an estimate of the net resale value of the property after subtracting assessment and cleanup costs.) The City appraised the property. In this case, the estimated cleanup cost exceeded the property’s assessed value. The City Council approved the transfer of the property from the City to S&W. S&W remediated the contamination and obtained Liability Release letters (covering both S&W and the City) from DEC. The City was able to get a contaminated property cleaned up with no financial investment and without interposing itself in the chain of legal liability.

b) American Bag & Metal (1999-Spring 2001): S&W was initially brought in by the City to prepare a preliminary estimate of the cost to cleanup the “west parcel” (~0.5-acre) of this ~2.5-acre property. This parcel was discovered by NYS DOT to have a PCB problem. It is a “subsite” to the Onondaga Lake federal Superfund site. It has been classified as a “Class 2a” Registry site by NYS DEC. The Syracuse Industrial Development Agency (“SIDA”) agreed to repurchase the site after cleanup—presumably, once S&W agreed to put itself in the chain of title (for purposes of cleanup liability). Contamination issues (buried paint wastes) were also found on the 2-acre “east parcel.” S&W performed a preliminary cleanup cost estimate for this parcel as well and ultimately prevailed on the current site owners to fund the conduct of an expanded Phase II environmental site assessment covering the east parcel. (The economics would not have worked without such outside funding.) A voluntary cleanup agreement has been negotiated with DEC for the west parcel, based on a work plan for investigation and remediation. The east parcel will be cleaned up by S&W outside of the Voluntary Cleanup Program. S&W has negotiated an option agreement to acquire the property from the current owners. It will step into the chain of title by June 2002. (S&W is able to provide the necessary financial assurances to the City and current owner by virtue of (i) the cash flow generated by the Site Investigation arm of the company, which is part of S&W; and (ii) the purchase by S&W of a standby letter of credit covering the cost of necessary remediation.)

Mr. Stoner indicated that sites that require “real exotic engineering solutions” are not suitable Brownfields sites for purposes of their program. “You want to implement solutions quickly.” Otherwise it is not financially viable.

c) 1915 Erie Boulevard East: An ~2-acre gas station/restaurant with a “repair guy” as lessee. Owes $200K in back taxes. The property’s fair market value is greater than $200K. The site is also large enough to cover worst-case estimated cleanup costs. S&W entered into a Memorandum of Understanding with the City, signed a Voluntary Cleanup Agreement with DEC (S&W got a VCA work plan approved after 8 iterations), and it negotiated a “transfer value” with the City. It is now submitting a Remediation Work Plan.

Mr. Stoner indicated that S&W doesn’t want to invest more than $100K to $200K in a site, but he indicated that “you can afford a lot, if you have an exit strategy.” He said S&W is currently trying to develop projects in Connecticut and Massachusetts.

d) West Street Project: S&W acquired several properties from pharmaceutical companies that didn’t want to be in the chain of title until the sites are remediated. The properties are subject to a payment in lieu of taxes (PILOT) arrangement under which all cleanup-related expenditures are deductible from applicable property taxes. Up to 12 properties are being jointly addressed under a “campus” Voluntary Cleanup Agreement.

S&W limits its liability by setting up project-specific limited liability companies (LLCs). It used to have an in-house legal counsel, but since his departure they work with an outside law firm.

S&W is interested in pursuing similar projects in the Binghamton area. It appears that the ideal candidates would be sites with the following characteristics: relatively small (0.25-2.5 acres); owes substantial back taxes; site is contaminated by petroleum or other “non-exotic” contaminants, with relatively straightforward, expeditious cleanup options (costing no more than $100K-$200K); and the site has a post-cleanup real estate value in excess of cleanup and assessment costs.

4. Risk assessment methodology: Mary Brophy reported on a Risk Assessment Methodology she developed and wrote up in conjunction with Ron Brink and Tom Suozzo, to provide a documented rationale for ranking candidate sites based on their public health significance. The methodology can be briefly summarized as follows:

a. Three factors determine the risk of adverse health effects: (i) the toxicity of the contaminant(s), (ii) exposure of individuals (receptors) to that substance, and (iii) a route or pathway by which the individual is exposed to the substance. Since we are dealing with brownfield sites that (hopefully) will be developed and occupied by people, the presence of receptors is assumed. So, the methodology focuses on toxicity and route of exposure.

b. Toxicity can be confirmed or suspected. “Banding levels” (from A to D, with A least likely to result in adverse health effects) can be assigned in each instance:

Sites with suspected toxicity: A = solid waste + non-toxic, B = low levels + low toxicity, C = high levels + low toxicity or low levels + high toxicity.

Sites with confirmed toxicity: A = solid waste + non-toxic, B = low levels + low toxicity, C = high levels + low toxicity or low levels + high toxicity, and D = high levels + high toxicity.

c. The exposure route is based on where the contaminants are located: W = ground water, X = soil surface, Y = subsurface soils, and Z = soil gas. Because cleanup levels may not achieve specified health standards, the appropriate barriers must be provided to prevent possible exposure to the occupants of a redeveloped brownfield site (e.g., for contaminants in the soil surface, where exposure is by direct contact, ingestion, or wind-borne dust, paving over the surface creates an effective barrier to exposure).

Mary proposed that, following any listing of ranked brownfield sites, there be included a short summary table outlining the adverse health effects associated with each class of contaminants based on data from nationally recognized sources, such as EPA. There ensued some lively discussion of the potentially inflammatory impact of labeling particular brownfield-associated contaminants with serious adverse health consequences (cancer, birth defects, etc.) without regard to site-specific circumstances (low levels, no exposure pathways, or barriers to such pathways). Tom Suozzo suggested that this could perhaps be mitigated by breaking chemicals up into broad categories, such as “heavy metals.”

In response to a question from Ken about the willingness of the “group of 3” to apply these ranking criteria to the list of candidate sites, Ron Brink indicated his willingness to undertake this task prior to the next meeting. For comparison purposes, Ken provided to Mary, Ron, and Tom the rank-ordered listings of sites based on the environmental and public health considerations addressed at the previous two meetings (based on “threat potential”, “extent of missing data”, and “regulatory focus”).

Hopefully, at the next meeting we can see how the results of the two ranking approaches compare. (In essence, the approach of the “Group of 3” provides a more systematic and precise methodology for assessing what was referred to as “threat potential” in the previous approach. “Extent of missing data,” while not specifically addressed, is subsumed to some extent in the separate consideration of “suspected” versus “known” toxicity. The new methodology does not deal with the “regulatory focus” issue, which can have a major impact on the level of time, effort, and expense which must be directed at getting a brownfield site into developable condition. This issue will have real practical significance (a) until and unless the law is amended to give DEC jurisdiction over “hazardous substance” sites [currently, it only regulates “hazardous waste” and oil spill sites], and (b) program resource constraints at DEC limit the department’s ability to investigate ALL potentially contaminated sites.)

Also at the next meeting, we will attempt to apply to our candidate sites the first group of non-environmental screening criteria—i.e., what we have called “Land Use, Planning, and Development” considerations. (The final group of screening criteria we will subsequently apply are “Legal and Financial” considerations.)

Ken mentioned that, at a subsequent meeting (perhaps at our meeting of May 15^th), we’d like to engage Joel Boyd in a discussion of how we might facilitate the ongoing incorporation of City of Binghamton tax parcel and related real estate data on potential brownfield sites in the City into the county-wide database of such information.

5. Next meeting: The next meeting will be held on April 17, 2002 at 4:30 p.m.

6. The meeting adjourned at 6:10 p.m.

Recorder, Ken Kamlet

3/29/02. Editor, Joanna Corey