Exec: NJ's Shift of Remediation Burden Speeds Redevelopment

HOBOKEN, NJ—The shift of environmental remediation responsibilities from state government to the private sector is quickening the pace of site remediation in the Garden State, making it more feasible for developers to reclaim environmentally challenged sites for new uses, especially in the industrial sector, says Michael Novak, president of Atlantic Environmental Solutions, a Hoboken-based remediation firm.

The Site Remediation Reform Act, which went into effect in 2009, shifted the responsibility for initiating and completing most remediation projects from the New Jersey Department of Environmental Protection to private sector Licensed Site Remediation Professionals.

“Since the LSRP program was fully launched in May 2012, more contaminated sites across the state are being cleaned up and returned to quality, productive use faster than ever before,” says Novak, who spoke in an exclusive TV interview with GlobeSt.com. “In the past, the generic system was to do an assessment to see if there’s any concerns, then sending that assessment in to the DEP, waiting for some time to see if the DEP agreed with your consultant, and then proceed to the next step.”

Watch the complete video interview with Michael Novak in the player below.

SRRA speeded up the process dramatically, Novak says, and it appears that streamlining the remediation process has proven to be effective.

From the time the LSRP program was fully implemented in 2012 to the end of 2015, NJDEP reported that the number of cases closed rose from 1,200 to 7,500. This number surpassed 10,000 in 2017 and is on pace to reach 12,000 this year.

“Under the new system, the borrower and developer and lender can look the LSRP straight in the eyes and say, ‘OK, if we do this this, this, and this, and as long as the results add up in the way that we hope, this case will be closed.’ There’s really no third party to stop and second-guess that process,” he says. “Something that would take multiple months or multiple years is now getting cut down to less than 30 percent of the time that a deal would normally have to wait for the environmental to get resolved.”

New Jersey’s history as an industrial center has left a legacy of liabilities for real estate owners and developers. As a result, buyers and sellers of a wide range of properties encounter serious environmental concerns, from leaking underground storage tanks to buried industrial waste, poor quality fill material, improper handling of hazardous materials, historic PCB usage and spills. The volume of contaminated sites coupled with increased demand for efficient cleanup has led to sweeping changes in the way site remediation is handled throughout the state.

Novak was one of the first LSRPs in New Jersey. “As transaction-based environmental consultants, our firm was accustomed to performing remediation and consulting services on a rapid basis to facilitate a deal, and we had success interacting with the NJDEP on fast-turnaround projects,” Novak says. With multiple LSRPs on staff, he and his team have closed 147 LSRP matters with Response Action Outcome letters. AESI currently has 327 LSRP projects, ranking it high among environmental firms statewide.

Approximately 60 percent of AESI’s workload is generated by environmental due diligence and soil and groundwater remediation services. The firm’s LSRPs work with clients to investigate and remediate properties, and Areas of Concern must achieve full compliance with the NJDEP Technical Requirements, multiple guidance documents and Remediation standards. Transaction speed is a key consideration, and AESI is committed to expediting site cleanup as quickly as possible without compromising quality.

“Helping our customers rapidly attain full compliance is our top priority,” says Novak.

Demand for new warehouse space is driving demand for environmental site remediation, he says.

“The properties that are being traded are large and industrial in urban areas and tend to have minimally just contaminated fill material that doesn’t need to be really remediated and removed from the property,” he says. “It can be managed in place but there’s a lot of investigation and reporting and documentation regarding the quality of the soils at the property.”

Groundwater contamination on a site can extend the complexity of the remediation process, Novak says.

“The real challenge to a real estate transaction is when we find groundwater contamination and that’s something that can’t be resolved normally within months and it would otherwise slow down or kill a deal,” he says. “What we’re good at is kind of forecasting how long it will take to get to finality with remediation, how much it will cost, and then help the buyer and seller work together on an escrow agreement that helps either the buyer to take over the clean-up post-closing, or to allow the seller to come back to the property post-closing and complete the remediation.”

Transit villages are a substantial source of work for AESI as well, under the LSRP program. Soil and groundwater contamination are common issues for residential or mixed-use development projects built along rail lines and on sites that historically served non-residential or industrial purposes. Remediation plans are tailored to specific site conditions, and remedies include traditional excavation and disposal programs as well as subsurface injections with amendments that destroy contaminates in ground.

“By utilizing the knowledge and expertise of environmental professionals, the NJDEP is returning contaminated sites to beneficial use and providing assurance to owners that the work meets complex rules and regulations,” says Novak. “Most importantly, firms like AESI are helping to protect our state’s natural resources and improve the quality of life for businesses and residents.”