The Polanco Redevelopment Act By: Richard G. Opper (619)

Opper & Varco LLP Contaminated Property: Is there a Doctrine in the House?

Opper & Varco LLP Guiding Principle: “The owner of condemned property is entitled to be put in as good as position pecuniarily as if his property had not been taken” - BUT -

Opper & Varco LLP Guiding Principle: However, an owner has no property right to pollute. Under nuisance law, “the right to make any use of the property that would create a hazard... was excluded from title at the onset.” US v. Virginia Electric & Power Co. 365 US 624, 633 (1961)

Opper & Varco LLP Contaminated Property: “A survey of approaches to assessing damages to contaminated private property” By: Kenneth F. McCallion Fordham Environmental Law Report

Opper & Varco LLP Contaminated Property: “Society no longer has the luxury of permitting individuals and corporations to exploit land... without being fully accountable for the environmental degradation caused.” 3 Fordham Environmental Law Report - 125, 126

Opper & Varco LLP Nichols on Eminent Domain, Matthew Bender, 1996 The “Non-Intersection” of Eminent Domain and Condemnation Dr. Gavin Erasmus “The Taking of Environmentally Contaminated Property”

Opper & Varco LLP Contaminated Property: A) All evidence of contamination should be excluded from the valuation trial B) “Just” compensation makes no offset

Opper & Varco LLP Contaminated Property: “Contamination is a separate matter and should be tried separately. [Therefore]... the submission here is a “non- intersection”. Nichols, Matthew Bender § 13B.01

Opper & Varco LLP Contaminated Property: If “just compensation” equals fair market value - isn’t the question one of how the “market” values contaminated property?

Opper & Varco LLP California Redevelopment: Employs statutory solution Polanco Redevelopment Act

Opper & Varco LLP Brief History: Proposed by San Diego Downtown Development Agency (CCDC) in 1990 Proposed by San Diego Downtown Development Agency (CCDC) in 1990 Amended on several occasions Amended on several occasions 1998 amendment at the request of California Redevelopment Association (CRA) 1998 amendment at the request of California Redevelopment Association (CRA) Legislated “sunset” removed; SB 1684 September 27, 2002 Legislated “sunset” removed; SB 1684 September 27, 2002

Opper & Varco LLP Polanco Redevelopment Act Health & Safety Code § , et esq. Cost reimbursement Cost reimbursement Immunity from further state cleanup demands Immunity from further state cleanup demands

Opper & Varco LLP “An agency may take any actions that the agency determines are necessary... Consistent with... Law... To remedy or remove... A release of hazardous substances... Within a project area...” H&S § (a) H&S § (a)

Opper & Varco LLP Applies federal CERCLA liability framework to RDA Project Applies federal CERCLA liability framework to RDA Project Owners & operators Owners & operators Past owners or operators Past owners or operators Arrangers Arrangers Transporters Transporters “PRP”s (Potentially Responsible Parties)

Opper & Varco LLP How Does it Work: Authorizes RDA requests for Phase I and Phase II environmental information Authorizes RDA requests for Phase I and Phase II environmental information Authorizes reimbursement to RDA for investigations Authorizes reimbursement to RDA for investigations Authorizes RDA to send “60-day Notice” letter requiring to develop and approve a remedial action plan Authorizes RDA to send “60-day Notice” letter requiring to develop and approve a remedial action plan

Opper & Varco LLP Whither? City of Emeryville v. Elements Pigments, Inc WL (N.D. Cal. 2001) City of Emeryville v. Elements Pigments, Inc WL (N.D. Cal. 2001) SB 1684 SB 1684 San Diego RDA v. Salvation Army (Cal. Ct. App., 4th District. Oct. 21, 2002.) San Diego RDA v. Salvation Army (Cal. Ct. App., 4th District. Oct. 21, 2002.)

Opper & Varco LLP Salvation Army: What does “scope and standard of liability under CERCLA” mean? What does “scope and standard of liability under CERCLA” mean? Must Agency comply with the National Contingency Plan? Must Agency comply with the National Contingency Plan?

Opper & Varco LLP CERCLA Elements: 1)“Responsible Party” 2)At a “facility” 3)Where “release” of “hazardous substances” occurred 4)If the Government spent money 5)Not inconsistent with “NCP”

Opper & Varco LLP Polanco Elements: 1)Site within redevelopment area 2)“Release” of “hazardous substance” occurred 3) Defendant is “responsible party” - and -

Opper & Varco LLP Polanco Elements: 4)60 Day notice (required for remedial plan) 5)No (satisfactory) response 6)Clean-up implemented subject to approved plan 7)Agency incurred costs to implement plan

Opper & Varco LLP Salvation Army “Scope and Standard” of CERCLA Liable (responsible) parties Liable (responsible) parties Judicial “CERCLA standards” Judicial “CERCLA standards” Doesn’t include NCP Doesn’t include NCP

Opper & Varco LLP Salvation Army: City had prejudgment possession, City had prejudgment possession, Therefore Army not “owner” No. (Fleet Factors) No. (Fleet Factors)

Opper & Varco LLP Salvation Army: Army deserved new “60 day notice” for unknown release. Army deserved new “60 day notice” for unknown release. No. One notice is all Act requires. (Joint and several liability) No. One notice is all Act requires. (Joint and several liability)

Opper & Varco LLP Salvation Army: Army should not have Polanco “offset” considered for purpose of determining entitlement to litigation expenses. Army should not have Polanco “offset” considered for purpose of determining entitlement to litigation expenses. No. Fair Market Value is not blind to contamination. No. Fair Market Value is not blind to contamination.

Opper & Varco LLP Salvation Army: Expect to see more cities tackle tough brownfield sites!