Hemenway & Barnes AUTHORED LITERATURE

The Challenge of Future Development Rests in Environmental Balance
Women's Business, Vol. 2
January 2000

One of the foremost challenges of the 21st century requires achieving a fair balance between protecting our limited and diminishing environmental resources on the one hand and meeting the real estate demands of an exponentially growing population with increased business, technological and transportation needs on the other.

The sheer number of environmental regulations at the national, state and even local level has resulted in cost increases and time delays for even modest commercial and residential projects and imposed a whole strata of planning steps for large developments.

In addition, the potential for development of so-called Brownfields or other partially contaminated sites frequently requires the drafting of complex restrictions on use (AULs), negotiation of risk allocation agreements among the parties and the obtaining of environmental insurance coverage.

These added elements have increased both the cost and the complexity of the business deal and the demands on counsel for the developer, who must be familiar with a broad range of issues from environmental permitting and title considerations to the drafting of purchase and loan documents.

Although environmental regulation impacted large development projects as early as the 1960s, it is only within the past 25 years that addressing environmental issues has played a significant role in almost all real estate development.

Prior to the mid-'70s, addressing whether a particular parcel of land was "developable" or "buildable" primarily required analysis of local zoning ordinances and bylaws and the constraints imposed by planning board. Today, the same question requires consideration of whether the site is or has been contaminated, whether it contains wetlands, whether proposed parking areas will result in reducing air quality in a large metropolitan area and a host of similar issues.

The three-volume treatise of Massachusetts Environmental Law published by Massachusetts Continuing Legal Education contains a 24-page appendix listing state and federal environmental regulations and a glossary of 385 environmental law acronyms ranging from ACEC ("area of critical environmental concern") to ZEV ("zero emission vehicle").

The difficulty of addressing the multitude of environmental regulatory issues is exacerbated by the fact that for any given area or resource that is regulated, it is likely that multiple layers of regulation exist and that permits need to be obtained from federal, state and local agencies that have overlapping jurisdictions.

By way of illustration, assume that Danielle Developer wants to construct a modest, 15,000-square-foot, mixed office and retail use complex in Our Town, Mass. She has selected a six-acre site, one of the few developable sites remaining in Our Town, and has had the site surveyed and a topographical map prepared.

Although environmental regulation impacted large development projects as early as the 1960s, it is only within the past 25 years that addressing environmental issues has played a significant role in almost all real estate development.

The survey shows a perennial stream located in the north-west corner of the site and also indicates that approximately one-third of the site consists of bordering vegetated wetlands. Danielle's access to the site will require crossing the stream at one point and will also require construction within 200 feet of the perennial stream and within 50 feet of the bordering vegetated wetland.

Our Town's conservation commission has indicated that its consultants have identified the stream banks as a significant wildlife corridor and Our Town's local wetlands bylaw has imposed both no-build and no-disturb zones as buffers to any bordering vegetated wetland.

In analyzing the feasibility of a prospective development, Danielle will need to consider the requirements of the state Wetlands Protection Act, Massachusetts General Laws Chapter 131, §40; Our Town's local wetlands protection by-law and its requirements; and whether a Section 404 permit from the United States Army Corps of Engineers needs to be applied for under the Federal Clean Water Act, 33 U.S.C. §§1251 et seq.

The task of conducting these three separate reviews is complicated by the fact that the method of wetlands delineation may not be consistent among the federal, state and local regulators.

Add to the mix the possibility of a MEPA filing in the event that state or agency funding is involved and Chapter 91 licensing and/or Coastal Zone Management review in the event of a coastal property, and there is a significant cost premium for what began as a relatively modest development.

It is urged that this cost premium is justified by the need to ensure that future development of our limited land resources is environmentally sensitive, particularly in those areas providing habitat to endangered plant and other wildlife species.

Balancing the real estate needs of a growing population against preserving out limited environmental resources for the next millennium will continue to define the battlefield of environmental and land use litigation for the next several decades.

The heroes will be those developers and regulators alike who can envision and shape creative approaches to striking and maintaining an equitable and enforceable balance between these frequently opposing tensions.

Diane C. Tillotson is a partner in the Boston firm, Hemenway & Barnes. She concentrates her practice in the areas of zoning and environmental permitting and real estate litigation, and has recently concluded her term as president of the Massachusetts Conveyancers Association.