Thinking of expanding your operations? Need land for plant or office space?
If so, ask your commercial real estate broker about "brownfield" real estate--and schedule some time with your insurance broker to discuss brownfield insurance so you can sleep at night.
Brownfield real estate is land once used for industrial or military purposes and thought to harbor, at worst, moderate pollution. There may be as many as 100,000 brownfield parcels in California, according to the state Department of Toxic Substances Control, including many in Los Angeles and surrounding cities.
Until recently, the strictures of environmental law made it practically impossible to redevelop even lightly contaminated land. Environmental law makes anyone with an interest in such land liable for the cleanup costs for all pollution discovered on the land--even pollution caused by others in the past and perfectly legal at the time.
This means that the law holds you responsible for your own messes and, in addition, for those of people long gone from the scene.
The result: Across the country, brownfield real estate lies abandoned and unused, for all practical purposes off-limits to developers who can't risk finding unexpected pollution.
If you suspect the law of unanticipated consequences at work here, you're right. Zealous to punish polluters, the law seeks to stick them with the job of cleaning up after themselves--to which many a polluter responds by disappearing. No one else wants the job either, of course, so contaminated land blights the landscape of many cities.
Beginning nearly 20 years ago, the state of California sought to free brownfield real estate for redevelopment through a program involving what the Department of Toxic Substances Control calls "certificates of completion" or "no-further-action" letters.
The thinking behind the program was simple: If you were a developer, the state wanted you to build residential housing only on squeaky-clean land, but it applied a looser standard to land on which you might put up, say, a shopping mall. A certificate of completion testified that you had cleaned up the land to acceptable standards for a mall, and a no-further-action letter showed that the state believed that, barring the discovery of additional pollution, it would require no additional cleanup work.
