Brightfields: The Convergence of Green?

Contaminated Site, Toronto

Everyone knows the electronic convergence of the computer, internet and television is happening right before our eyes. But there is a lesser-known environmental convergence developing in North America, called 'Brightfields'. 

Brightfields are environmentally contaminated properties that are used for clean energy production, usually solar or wind. Solar or wind production can be an ideal long-term use for sites that are highly contaminated and may require many years to clean-up or remediate. 

Recent and rapid advancements in clean energy technologies are what make this convergence possible

City Solar Project, Chicago

The Brightfield sector is more established in the United States than Canada, with many large projects in full production, including Chicago’s Solar City 10-megawatt solar installation located on a 41-acre brownfield. However Canada’s Brightfield sector does already have some significant players and supporting funding channels. 

Most Canadian banks will finance costs related to establishing qualified Clean Energy projects, and the Federation of Canadian Municipalities’ Green Municipal Fund will consider additional financing related to characterizing and remediating the property. 

Several companies like ArcStar Energy based in Toronto will finance, design, build and manage large-scale green energy projects for both Greenfield and Brownfield sites. With a multinational coverage ArcStar looks for sites that suitable for utility and large scale industrial power delivery, and for sites that are eligible for green energy incentives, such as Ontario’s Feed In Tariff or ‘FIT’ program. 

The percentage of Brownfields sites that are suitable for renewable energy projects is quite small. However the large number of Brownfields in North America, over 1,000,000 by some estimates, means that there are likely 10,000 - 20,000 sites that are ideal candidates for a Brightfield devlopment. 

Links:

Ontario Power Authority
Federation of Canadian Municipalities
ArcStar Energy 

New Website Announcement

Fisher Environmental is excited to announce the launch of their newly designed Website at: www.fisherenvironmental.com 

Fisher Environmental - home page

The site welcomes visitors with bold colours and a clean easy-to-read layout. Full of topical content and videos, our aim is to share our knowledge and expertise on environmental due diligence and how environmental issues impact real estate. 

The new site is divided into relevant sections including:

1. Environmental Site Assessments - the industry's most recognized due diligence report.
2. Indoor Air Quality - a growing human health concern.
3. Site Remediation - dealing with environmentally contaminated properties.
4. News Releases - topical articles from a variety of national publications.
5. Social Media - links to Associations and Fisher's other sites: Fisher Labs and Fisher Drilling.

The Website will be updated on a regular basis with new content.

Ontario courts rule against victims of off-site contamination (again)

Property development is a risky business. However those risks increase considerably when redeveloping a "Brownfield" site. Beyond dealing with on-site remediation costs, if pollutants have migrated to a neighbouring property, there is the potential for costly regulatory clean-up orders and civil lawsuits. 

Not surprisingly off-site liability concerns are often a significant stumbling block to Brownfield redeveloped. After all what developer would purchase a property with known clean-up costs on-site, but unknown off-site liabilities?

However two recent court rulings in Ontario cases involving off-site contamination, resulted in decisions going against the innocent property owners, whose sites were contaminated by the activities occurring on nearby sites. While it is unlikely that these cases will result in more Brownfields being redeveloped in the province they have caught the attention of many in the industry.

1. In October 2011 the Ontario Court of Appeal overturned an earlier decision by the Ontario Superior Court in Smith vs Inco Limited, which had awarded $36,000,000 in damages to 7000 property owners in Port Colborne, Ontario, due to soil contamination caused by nickel particles emitted from Inco’s refinery. (see my blog post from October 18, 2011)

Kawartha Lakes, Ontario

2. In June 2012 the Ontario Divisional Court upheld a Ministry of Environment (MOE) order requiring the City of Kawartha Lakes to clean-up city owned property contaminated by a residential homeowner's furnace oil spill. The MOE's order deemed that protecting the environment took precedent over the innocent victim's (the City's) rights. (see Dianne Saxe's blog for an excellent analysis)

Is a Record of Site Condition based on a Risk Assessments risky? Toronto, Ontario

Consider this situation: Your client wants to develop a large real estate parcel in a trendy transition neighbourhood in Toronto.  The problem is the Phase II Environmental Site Assessment has determined the site is contaminated with a mix of petroleum hydrocarbons, PCBs, dioxins, and heavy metals. On top of that the estimated costs to remediate, if done, would kill the project.

Dead deal, right? Not necessary.



Brownfield site in Toronto



For sites such as these a Modified Generic Risk Assessment (MGRA) may be an option.  Risk Assessments (RA), which are detailed studies of the risks to human health and the ecology caused by exposure to contaminants at a particular site, have been around for years.  However amendments to Ontario Regulation 153/04, include the new MGRA model, which promises to be a quicker and more cost-effective approach to getting a Record of Site Condition (necessary for redevelopment) on a contaminated property.

Risk Assessments are detailed studies of the risks to human health and the surrounding ecology caused by exposure to environmental contamination at a site.

While this is good news, the Ministry of Environment reserves the right to place a Certificate of Property Use (CPU) on a Record of Site Condition based on any risk assessment. CPU’s are limitations on how a site can be used (in order to protect human health) and are registered on title. An example of a CPU would be a provision prohibiting basements if it is deemed there is a risk of noxious vapour intrusion from contaminates in the soil. 

Certificates of Property Use can limit how a site can be developed and are registered on title.

So are Risk Assessments, risky? While it is true both traditional RA’s and MGRA’s are somewhat subjective, the strength of any Risk Assessment ultimately lies in the ability of the Risk Assessor, who does the analysis of the scientific data and submits the report.

Consider though: The hypothetical real estate parcel I referenced above does exist: It is the 80-acre West Don Lands site in downtown Toronto, which is currently being developed as the Athletes’ Village for the 2015 Pan Am Games. After the Games this site will ultimately have 6,000 new residential units and 23 acres of parks and public space, all on environmentally contaminated land, but with on-going risk management measures in place.

It’s a brave new world.

Toronto's West Don Lands - 2015

Next 2 blogs: Things to remember about Ontario’s new environmental legislation

Environmental Site Assessments – Phase 3 – The Site Clean-Up

In the last blog we discovered that a Phase II Environmental Site Assessment (ESA) is used to test the soil and groundwater at a property to determine the “location and concentration” of suspected contamination.  If contamination is found and it is over the legal limit, a property owner may elect to clean-up or remediate the site. This clean-up process is call Phase III or Site Remediation.

Site remediation technologies can be divided into 2 categories:

1. “In Situ” – Latin meaning ‘On Site’
2. “Ex Situ” – Latin meaning ‘Off Site’

On site “In Situ” treatment methods involve treating the contamination right at the site. While “Ex Situ” methods involve physically moving the contaminated material to an “off site” location for treatment, then backfilling with a clean-fill material.

There are many factors to consider in choosing the best treatment method including: type of contamination and its concentration, soil conditions, time available, and budget. Depending on the situation, the best treatment method may not be the most effective or cost-efficient.

Consider the following example:  You own a commercial property and receive an offer to purchase for $2,000,000 but your site is contaminated.  Using "in situ" Bioremediation (using natural microbes which digest the contaminants) would cost approximately $20,000 but it will take 18-24 months to complete.  But if your sale closes in 90 days you will be forced to remove the contaminated soil using a more expensive “ex situ” method.  While you may remediate the site and complete your sale, the final clean-up cost could be closer to $250,000.

When it comes to dealing with environmental contamination it is better to be pro-active. Remember even if your site is found to be contaminated, you are the client, and the engineering firm is under no legal obligation to report their findings to any government body, unless it is believed that the contamination seriously endangers the safety or welfare of the public.

If you suspect contamination, have it tested.  Don’t ignore it. If it contamination does exists, it is often under the limits. If it happens to be over the limits then at least you have bought yourself time to explore cost-effective options.