Periconi, LLC

Recent Decisions from the New York State Supreme Court on Brownfield Cleanup Program Eligibility- Part II

In following our previous post concerning judicial review of DEC decisions to deny proposed developments entry into the Brownfield Cleanup Program, we discuss the New York County Supreme Court decision of HLP Properties, LLC v. New York State Department of Environmental Conservation, No. 08-115969, __ N.Y.S.2d __, 2008 N.Y. Slip Op. 28337 (N.Y.Sup.Ct. New York Cty. Sept. 12, 2008).

In HLP Properties, the court overturned the DEC's decision to exclude the subject development from the Brownfield Cleanup Program and held that the development would be included in the program, rather than remanding to the agency for a re-determination. HLP Properties sought to develop a 1.75 parcel on the lower west side of Manhattan which was previously owned by Con Edison and its predecessor, the Manhattan Gas Light Company. Unabated gas production occurred at the site for over sixty years. It is currently being used as a parking lot, but the proposed project is to develop the property into two residential and commercial high-rise towers.

DEC denied entry determining that the site was not a brownfield because the property was neither unattractive for development or reuse due to the presence of contamination nor was it idled, abandoned or underutilized, all factors set forth in DEC's internal guidance, but not in the statute or regulations.

The court held DEC's reliance on its own guidance was "erroneous in that it constitutes an impermissible attempt to legislate, and is inconsistent with the Legislature's intent to encourage remediation." Since the agency engaged in the "proscribed activity" of legislating by adding "'guidance requirements' not authorized by statute", the DEC's decision was declared null and void.

In dicta, the court addressed the issue of whether a developer may reap the benefits of the Brownfield Cleanup Program when a third party has already agreed to voluntarily clean up the site (Con Ed, a non-party, in this case). It determined that a developer's application should not be denied on this ground alone because the tax credits available under the statute (the benefit to inclusion in the program) are inextricably linked with the amount expended by the parties responsible for the actual cleanup.

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