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Effective Public and Private Partnership Speeds Former Defense Site Cleanup and Redevelopment

A Midwestern city sought to quickly redevelop a 3,000-acre site with a new urbanism concept of mixed residential, commercial, civic, and educational uses. In the 1940’s, however, the United States Army had operated one of the nation’s largest ammunition facilities there. Portions of the site showed low-level contamination from historic disposal activities, and a fifty-acre parcel owned by the City was perceived to be more heavily contaminated. EPA assumed oversight responsibility for this parcel and notified the City, the Army, and Spencer Fane’s client (a large manufacturer) that all of them were liable. The City indicated that without cleaning up this fifty-acre parcel, redeveloping the remaining property could not proceed. The manufacturer called in Spencer Fane’s environmental lawyers to help solve this complex and potentially expensive situation.

It became clear early that cleaning up the fifty-acre parcel would present challenges. Environmental regulators said the project would require off-site disposal of large quantities of contaminated soils at costs of more than $20 million. Some community members did not trust the site clean-up process. The Army was willing to contribute only minimally and would not sign an administrative agreement with EPA to participate in site cleanup, asserting that EPA did not even have authority to enter such an agreement. Further, the Army said that it only had very minimal liability for the site cleanup in any event.

Spencer Fane analyzed the situation and used our knowledge of the applicable regulations and policies to find a solution. Working with our client, the team determined that the best opportunity would be to work with the City, develop a strategy to clean up and redevelop the site on a timetable desired by the City, seek to lower costs, and obtain additional contributions. To support the City’s aggressive redevelopment schedule, Spencer Fane’s legal team created a productive partnership with the City, pushed to expedite the cleanup, and negotiated an early cost allocation agreement between the manufacturer and the City. We then negotiated an agreement with the City for a cost-effective and protective site cleanup and to reuse the site as park land. We presented this site cleanup and reuse plan to the Army and secured its agreement. Finally, we presented this plan to EPA and persuaded EPA to propose this plan to the community as the site remedy. As a result of these efforts and those of the team’s consultant, the proposed site remedy was selected by EPA and cleanup costs dropped by approximately 70 percent.

In the meantime, using our knowledge of government documents and record keeping, Spencer Fane obtained access to and searched historical government records including government contracts that demonstrated the Army’s past site uses. Spencer Fane was thus able to show that the Army had significant liability for environmental conditions. Further, Spencer Fane was able to work effectively with staff and managers from various governmental agencies to persuade the Army to sign an administrative cleanup agreement with EPA, the City, and the manufacturer. Pursuant to this agreement, the Army agreed to fund a major portion of the reduced remedial costs. Spencer Fane’s client then stepped forward to conduct the cleanup in partnership with the City. The cleanup was paid for by significant federal, state, and local funds in addition to the private funds contributed by our manufacturing client.

Spencer Fane worked with our client’s team to establish a strategy for this project and identified the steps that would implement that strategy for our client’s benefit. We used our knowledge of the applicable law, regulations, and policies to persuade the various project stakeholders to accept and participate in the implementation of the strategy. We persuaded participating parties to contribute financially, and we persuaded regulators and public entities to support our approach in cost-effective and pragmatic ways.

If you are aware of an environmental cleanup or a redevelopment situation in which the other potentially responsible parties refuse to be realistic about their liabilities or government agencies cling to positions that are not results-oriented, ask Spencer Fane’s Environmental Practice Group for an independent assessment of potential opportunities and strategies.