In 2016, the Contaminated Property Redevelopment Act authorized the Kansas Department of Health and Environment (KDHE) to issue Certificates of Environmental Liability Release (CELR) to certain prospective purchasers of contaminated properties. This policy was developed to encourage redevelopment of contaminated property for more productive use, by allowing buyers to avoid state cleanup liability.
Blackstone has assisted multiple clients with successful CELR applications. Properties have included commercial sites, former gas stations, and former manufacturing facilities. For one client, a Phase I ESA identified the possible presence of a historical gas station on the property in the early 1960s, and a subsequent Phase II ESA confirmed the presence of hydrocarbon impacts in soil and groundwater above residential risk-based concentrations. The liability release provided by the CELR obtained for this site allowed the property transaction to take place.
For another client, Blackstone completed a Phase I ESA at a former manufacturing facility previously used for metal fabrication. The Phase I ESA identified one Historical Recognized Environmental Condition (REC) related to the removal of a waste oil tank and one REC related to a leaking underground storage tank (LUST) incident associated with the removal of a septic tank used as sediment trap for a wash bay at the facility. Although the LUST incident was considered closed by KDHE, Blackstone determined through review of available historical reports that potential environmental impacts related to this incident were not fully characterized. As a result, Blackstone recommended additional site characterization activities and provided support to the client for their CELR application.
Blackstone assisted another client in obtaining a CELR for a site located downgradient of a groundwater plume from a former dry cleaner. The groundwater plume is currently being monitored as part of the KDHE dry cleaner program. Additionally, although the site had been previously redeveloped as a car wash, prior to this redevelopment, it was the location of a former gas station. Petroleum hydrocarbon impacts had been delineated and the site was closed under the KDHE Tanks Program; however, residual petroleum impacts remained in groundwater and soil at the site in excess of KDHE risk-based concentrations. The presence of residual petroleum impacts posed a concern for future redevelopment at the Site related to excavation of soils and the potential for vapor intrusion resulting from the migration of petroleum impacted groundwater into indoor air in an underground structure/basement. Therefore, Blackstone recommended that our client apply for a CELR to provide environmental liability relief for potential future development.
For a property to qualify under the CELR, the property must be contaminated. However, impacts do not have to exceed risk-based standards. In order for an applicant to qualify for a CELR, the applicant cannot be the responsible party for the identified contamination and cannot currently own the property.
A CELR must be issued prior to ownership unless current owner meets criteria in which the applicant:
Has not exacerbated the contamination;
Has no direct or indirect familial relationship with the owner or the party responsible for the contamination;
Has no contractual, corporate, or financial relationship with the owner or the party responsible for the contamination;
Has not provided indemnification or release of environmental liability to any other party; and
Is not the subject to a contract, agreement, or order with the intended purpose of performing investigation or remediation of contamination at the property.