The Polanco Redevelopment Act

Why do redevelopment agencies need the Act?

Old factories, vacant lots, defunct gas stations, abandoned warehouses . . . these are common images in many of California’s cities. The threat of toxic contamination literally drives developers away from former industrial sites—and pushes growth into greener pastures in the suburbs.

If we are to reverse this trend and revive our inner cities, redevelopment agencies must step forward and play an important role. Agencies, like developers, are wary about incurring liability under state and federal environmental laws. The result is that many of these mildly contaminated sites which could be put to productive use sit idle, draining the local tax base and contributing to blight.

In recent years, the U.S. Environmental Protection Agency and state regulatory agencies have attempted to tackle this problem by actively promoting brownfields redevelopment on a site-by-site basis. The regulatory initiatives seek to limit liability by contract for parties who did not cause site contamination. These agreements, however, can be quite time-consuming and expensive to execute.

California’s Polanco Redevelopment Act, available only in redevelopment project areas, overcomes this problem by eliminating the need for site-specific negotiated agreements. Broad immunity provisions (for parties that did not cause the contamination), as well as extensive cost recovery provisions, are written into state law.

Vital statistics of the Act

Allows a redevelopment agency to order parties responsible for contaminating property in the redevelopment project area to perform the necessary cleanup.
If the responsible party does not cooperate, the redevelopment agency can perform the cleanup itself or arrange for a third party to clean up the property.
The redevelopment agency can require a property owner to provide all environmental information related to the property, including Phase 1 assessment or subsequent environmental tests.
The redevelopment agency can perform cleanup on property owned by the agency as well as property owned by another party.
The Act can be found at Health and Safety Code Section, 33459 et seq.

How does the Act work?

The redevelopment agency performs all necesary environmental assesments (or requires the responsible party to) and then prepares a remedial action plan (RAP)
The RAP must be approved by the California EPA's Department of Toxic Substances Control, the applicable regional water quality control board, or a local agency (e.g., County Department of Health).
When the cleanup is complete, anyone who enters an agreement to redevelop the property, any subsequent purchaser and any lender for redevelopment of the site, may obtain immunity from any liability for the contamination cleaned up under the Act.
The person who was responsible for site contamination is not given immunity under the Act. Thus, the law promotes site cleanup and reuse without reducing the liability of parties who actually caused the contamination.
Importantly, the law does not make state funds available for redevelopment agencies to use for the cleanup. Instead the Act provides for cost recovery provisions that the redevelopment agency can use to recover its cleanup costs from the party(ies) responsible for the contamination.

Who is using the Act?

San Diego - In 1988 the Centre City Development Corportation, acting on behalf of the redevelopment agency, advertised for development proposals for the Marina Project Area. In the process of evaluation, it was discovered that a large underground toxic plume existed. Development was halted until an acceptable remediation process was agreed upon. Once the Act was signed into law in 1992 and implemented for the project, this area was transformed from an aging commercial/industrial district to a thriving, high-density residential neighborhood of the Centre City.

Emeryville - The redevelopment agency is using Polanco Authority to expedite the cleanup of a 12-acre industrial site contaminated with pesticides, heavy metal, and volatile organics. A process that frequently takes five to 10 years will be completed in under three years. Polanco's immunity provisions will facilitate financing for the $200 million redevelopment project, and the Act's cost recovery provisions shifted the cleanup costs to the responsible parties.

San Leandro - To speed up the contruction of a new Post Office on a three acre property formerly used for trucking and fuel distribution, the redevelopment agency, U.S. Postal Service, and property owner, are working together with the Regional Water Quality Control Board (RWQCB) to clean up contaminated soil and groundwater. Under the terms of a OPA, the redevelopment agency expedited the preparation and implementation of an RWQCB-approved, Polanco complaint, work plan for site cleanup activities, funded by the site owner.

Redwood City - The use of the Act by the redevelopment agency was the key element that broke a "development stalemate" at a former gas station and asphalt manufacturing facility site. Through the cooperative use of the Polanco process by all project stakeholders, including the San Mateo County Health Services Department and the RWQCB, construction of the mixed-use residential and retail City Center Plaza development was completed in 1997.