Developers fear stricter IDEM cleanup rules

State environmental regulators are catching an earful for what some businesses complain is a rush to aggressive new rules
for remediating land contamination.

Developers worry the Indiana Department of Environmental Management’s proposals, which could require comprehensive site cleanup,
will discourage brownfield redevelopment, especially the reuse of tainted-but-valuable land in urban areas.

Environmental remediation firms, on the other
hand, see a potential windfall.

"A lot of them are saying, ‘This is a freaking boon-cha-ching,’" said a member of a group of stakeholders IDEM has
assembled to comment on changes in its guidelines for so-called Risk-Integrated System of Closure, or
RISC.

The source, who
asked to remain anonymous to avoid being expelled from the group, said working group participants were surprised
when IDEM suddenly shifted gears to rule-making before a number of issues had been discussed.

"It seems to have created quite a stir with some folks," acknowledged Bruce Palin, assistant
commissioner for IDEM’s Office of Land Quality.

Starting last fall, IDEM began reviewing in earnest its RISC rules, which cover remediation of
such things as leaking underground storage tanks.

IDEM Commissioner Thomas Easterly and others have expressed concern about what has become common
practice when it comes to remediation: essentially isolating the contaminated soil and placing an environmentally
restrictive covenant on the property deed.

It’s better known as "pave and waive."

"Some folks have gone to jumping right to, ‘I’ll put a parking lot over it and put a restrictive
covenant on it,’" Palin said.

While such a solution might ultimately be determined to be the best way to address a particular
contaminated site, such a knee-jerk default approach "is not necessarily good public policy,"
Palin added.

According
to the draft policy still undergoing scrutiny, contamination above a certain level would be addressed, in preferential
order, "by removal or treatment" first, followed by containment, engineered controls and institutional controls,
such as deed restrictions.

In certain instances, the IDEM is signaling, there’s "a preference for active remediation, unless
it’s technically impracticable," said Brent Dayharsh, director of technical services at Indianapolis-based
Quality Environmental Professionals Inc., a remediation firm.

John Kyle and Dave Gillay of the law firm Barnes & Thornburg, which is representing businesses
interested in the outcome of IDEM’s rule-making process, have questioned the potential fiscal impact
of the proposals under discussion. But they acknowledged the process is in early stages and that outcomes
are subject to change.

Complete removal of contamination could be costly and impractical, some businesses argue. RISC-based rules now in place often
result in the most cost-effective reuse of contaminated land, such as the use of barriers or caps over tainted land.

"IDEM has raised legitimate concerns with
the use of engineered barriers and institutional controls [covenants] and the effect these could have
on future generations who are left to maintain and monitor these sites," according to a statement from the
Barnes & Thornburg legal team.

Some firms argue that digging up contaminated soil can cause more harm than good.

Restoring a site to "pristine" condition is often too costly for a developer, said Geoffrey
Glanders, co-founder of Indianapolis-based August Mack Environmental.

Glanders credits IDEM for attempting to make its rules more consistent.

One problem, however, is the uncertainty that
discussions over rule changes have caused among IDEM’s field staff. Glanders said he has a number of
client projects in the pipeline, but IDEM managers are uncertain how to treat the proposals, "and
you can’t blame them."

"The biggest issue is uncertainty. … From our perspective, that drives our clients nuts."

Among the proposals IDEM is considering is requiring
the creation of an escrow account so money will be available for cleanup later, such as in the event
the developer of the project goes bankrupt.

IDEM said it would continue to have talks with industry officials and yet try to complete its rule process without undue delay.

"It doesn’t serve the state to bring cleanup
to a halt," Palin said.

Remediation of certain properties is already challenging enough–particularly abandoned gas stations.

Although they’re often in desirable locations,
such as at key intersections, cleanup costs can run into six figures. That’s often too high a premium
relative to the purchase price of a former gas station site.

There is funding to assist in the redevelopment of contaminated sites. The state-administered
Indiana Brownfields Program, for example, has shelled out more than $22 million in Indiana, including
more than $3 million for about 100 sites in Marion County.