A bill that specifies guidelines for the development of environmentally impacted sites in California was signed into law last week. The bill aims to give developers incentive to clean up urban properties, called brownfields, and put them back into use.

Uncertainty over potential cleanup costs often gives builders less incentive to build on brownfields. The California Land Reuse and Revitalization Act of 2004 gives new guarantees that developers won’t be pressured to clean properties after they’ve already been cleaned to state standards. The liability protection does not extend to additional contamination discovered after the agreement is reached.

“Previously, developers had to negotiate with agencies on a project-by-project basis to get the liability protections they needed, and those protections were often quite limited,” said Shiraz Tangri, an environmental attorney with Los Angeles-based Greenberg Glusker Fields Claman Machtinger and Kinsella, LLP. “Now that the state has codified the terms and conditions for redevelopment of these contaminated sites, developers will have a better understanding of the financial and legal risks going in to a proposed transaction.” 

According to reports, there are approximately 1,200 brownfield sites in California. The new statute generally applies to redevelopment of sites in urban infill areas impacted by the presence or potential presence of a hazardous substance.

“The new law is not a total avoidance of governmental liability, but a trade-off that grants certain liability protections to a developer who signs an agreement to assess and clean up the site,” Tangri said. “Developers should feel more comfortable going forward knowing the limits of their liability once they fulfill their commitment to the state.”

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