Stormwater regulations are a major issue for the commercial real estate industry, as illustrated by a recent legal battle in Massachusetts.
In July, NAIOP Massachusetts filed a Motion to Intervene in Conservation Law Foundation, Inc., et al v. United State Environmental Protection Agency, et al. The plaintiffs in that case, the Conservation Law Foundation and the Charles River Watershed Association, sought to compel EPA to impose a new regulatory program that would have required owners of commercial, institutional, industrial and high density residential properties in the Charles River watershed (an area that includes 35 communities and covers 310 square miles) with one acre or more of impervious area (parking lots, roofs, sidewalks) to apply for a stormwater discharge permit and potentially undertake costly retrofits to comply.
NAIOP Massachusetts decided to intervene in the case given the significant impact this duplicative and burdensome regulatory program would have had on its members.
On April 28, the plaintiffs filed a complaint in federal court alleging that nutrients, including phosphorus, in runoff from a number of “commercial, industrial, institutional, and high density residential” properties were polluting the Charles River. The goal of the lawsuit was to force EPA into using its rarely implemented “Residual Designation Authority” (RDA) to create a new stormwater permitting program.
This proposed program would be in addition to the recently issued stormwater permitting program for municipal separate storm sewer systems (MS4s), which collect and manage a substantial portion of the stormwater discharged into the Charles River from developed properties.
NAIOP Massachusetts believes the RDA approach is simply not the right tool. This perspective is based in part on the chapter’s experience with an RDA pilot program that was proposed in three Massachusetts towns in 2010.
The pilot program would have required property owners to construct costly, retrofitted stormwater treatment systems. EPA funded a study to determine the potential costs to comply with its proposed permitting program. Though the pilot program targeted sites with two acres or more of impervious area, compared to the one acre threshold being considered in the lawsuit, the total cost in the three communities to comply with the draft permit was astronomical. EPA’s own consultants estimated that the costs would be at least $180 million for the three communities.
Expanding such a program to all 35 communities in the Charles River Watershed would move that number into the billions. Costly and substantial retrofits of privately owned property would be immediately required if such a program were implemented and it would apply to all existing properties – not just those redeveloping or renovating property.
Therefore, NAIOP Massachusetts filed the Motion to Intervene. It was the first time the chapter had intervened in a lawsuit. However, given the potential impact of the decision and the fact that there was no opportunity for stakeholders other than the plaintiff environmental groups and EPA to influence the decision, the choice was clear. In addition, NAIOP Massachusetts also successfully lobbied the Congressional delegation and state regulators to oppose such an effort. In late August, the plaintiffs voluntary dropped the lawsuit without prejudice.
While NAIOP Massachusetts applauds this decision, it does not prevent EPA from moving forward with some type of program in the future. It does, however, ensure that such a massive regulatory program will not be rushed through and negotiated behind closed doors without input from affected stakeholders.
Moving forward, NAIOP Massachusetts will continue to support the overall objective of improving water quality while urging EPA to ensure that any regulatory program developed to achieve that objective must be cost-effective, feasible and fairly allocate the regulatory burdens and costs. By focusing on alternative, yet effective approaches such as public education, source control and Best Management Practices, rather than costly retrofits, the goal of a clean and vibrant watershed can be achieved.
NAIOP Massachusetts is grateful to NAIOP Corporate for its financial support on this issue.
Tamara Small is senior vice president of government affairs with NAIOP Massachusetts.