Environmental liability, policy and technology in real estate development
Massachusetts Institute of Technology. Dept. of Civil and Environmental Engineering.
Nicholas A. Ashford and Oral Buyukozturk.
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Under the Federal Comprehensive Environmental Response, Compensation, and Liability Act ("CERCLA"), 42 U.S.C. [paragraph]9601 et seq., "owner/operators" of contaminated real property may face cleanup costs that greatly exceed the value of the property. CERCLA liability is retroactive, is imposed without regard to fault, and - unless the defendant can prove divisibility - is joint and several. Moreover, owner/operators may also face liability under state cleanup statutes, under state tort law, and under the Federal Resource Conservation and Recovery Act, 42 U.S.C. [paragraph][paragraph]6901 et seq. Historically, this potential liability has had a dampening effect on the willingness of investors to acquire and develop property that is or may be contaminated with hazardous materials. As a result, the value of these so-called "Brownfields" properties has been diminished. This thesis explores two propositions regarding this form of environmental liability: 1) that the legislation is moving toward favoring and encouraging the developer of "Brownfields" real estate, and 2) that the most effective means for minimizing liability is a clear understanding of the laws, and an intelligent application of this understanding through the use of due diligence and transactional protections. This thesis attempts to provide information and analysis that would be especially useful to potential developers. Legislative activity was investigated and the relationship between public concern for health hazards and Congressional activity was studied and quantified to determine the nature of the correlation between these factors. The results indicate a correlation between public concern and Congressional hearings. This thesis also explores legislative concern with the interests of business and local government, as demonstrated by the increase in Congressional hearings leading to a modification of Federal environmental legislation to encourage development and remediation, and by the rapid growth of Brownfields development incentives in the individual States. As long as public concern does not return to the levels of the mid-1980's, it is likely that future legislation - at both the state and Federal level - will include additional incentives for the development of Brownfields and other contaminated property. The developments in environmental legislation indicate that environmental liability risks will continue to lessen, making such development more profitable and attractive to an increasing number of developers and other real property investors. Nonetheless, environmental liability does and should remain a legitimate concern in real estate development. There are key items - which could be considered a "checklist" - that a real estate developer needs to consider in the planning of transactions to undertake any development, especially any Brownfields development or rehabilitation project, to minimize his/her potential environmental liability.
Thesis (S.M.)--Massachusetts Institute of Technology, Dept. of Urban Studies and Planning; and, (S.M.)--Massachusetts Institute of Technology, Dept. of Civil and Environmental Engineering, 2002.Includes bibliographical references (p. 139-142).
DepartmentMassachusetts Institute of Technology. Dept. of Urban Studies and Planning.; Massachusetts Institute of Technology. Dept. of Civil and Environmental Engineering.
Massachusetts Institute of Technology
Urban Studies and Planning., Civil and Environmental Engineering.