…it’s like balancing a chemical equation to get the right answer.
SCS Engineers works with insurance firms, and we understand the insurance industry’s involvement in environmental and engineering projects. Our professional staff, located according to their knowledge of regional and local geography, regulatory policies, and industrial or scientific specialty, are available nationwide. SCS professionals are sought after as technical experts, admitted as expert witnesses, and support legal counsel in a variety of environmental and regulatory litigation matters.
Rising to meet the needs of insurance companies, SCS has the resources and professionals to assist commercial, industrial and municipal clients with a wide range of environmental and engineering issues and scenarios that can occur in the course of business operations. As a result, SCS also assists clients who have the need for, and exposure to, environmental insurance policies, assisting with coverage-related matters and claims. For our engineering and environmental clients, SCS has the depth of insurance experience and technical expertise to provide the guidance needed to help with environmental claims and can act as a liaison to facilitate a more straightforward claim process.
Environmental insurance can cover regulatory agency-required cleanups, bodily injury, property damage, and associated legal expenses that may result from a contamination event. Contamination and the mitigation process are expensive, often more expensive than prevention. Contamination is usually accidental, such as a spill, but may transpire over time or be a pre-existing condition. Environmental insurance protects companies by covering the expense of assessing contamination and performing remediation, thus restoring the environment and helping to keep the business operating safely. Our experience includes a wide range of environmental claim scenarios (i.e. gasoline/service stations, transportation accidents, the oil and gas industry, manufacturing and industrial facilities, asbestos, mold), which dovetails extremely well with SCS’s own numerous business sectors.
Partial Reprint of EPA Press Release
Over the past three years alone, EPA has assessed 6,572 properties, completed cleanups at 638 properties, and made 2,900 properties ready for anticipated reuse. Over this same period, more than 43,000 jobs have been leveraged as a result of Brownfields’ actions.
EPA recently announced the selection of 155 grants for communities and tribes totaling over $65.6 million in EPA Brownfields funding through the agency’s Assessment, Revolving Loan Fund, and Cleanup Grant Programs. Many of the communities and tribes selected can potentially assess or clean up brownfield sites in census tracts designated as federal Opportunity Zones.
“Without redevelopment opportunities, urban and rural communities – even those with deep historic roots – can eventually wither,” said OLEM Assistant Administrator Peter Wright. “Brownfields remediation and revitalization support communities by investing in the redevelopment of existing properties in the community.”
Since EPA’s Brownfields Program began in 1995, it has provided nearly $1.6 billion in Brownfield funding to assess and clean up contaminated properties and return blighted properties to productive reuse. EPA’s Brownfields funding has leveraged more than $32.6 billion in cleanup and redevelopment from both public and private sources, which in turn has produced more than 167,000 jobs. This is an average of nine jobs per $100,000 of EPA investment and more than $17 in private funding for each dollar of EPA Brownfield grant funding.
Brownfields grants have been shown to:
A Brownfield is a property for which the expansion, redevelopment, or reuse may be complicated by the presence or potential presence of a hazardous substance, pollutant, or contaminant. The Brownfields program empowers local leaders and communities to transform underused and distressed properties into community assets across America. Brownfields funds assess and cleanup vacant, underused, and potentially contaminated properties so that property can be reused as housing, recreation, and open space, health facilities, social services, or commercial sites. There are estimated to be more than 450,000 Brownfields in the United States.
For more information on successful Brownfields program applications, site revitalization, and success stories nationwide visit Brownfields and Voluntary Remediation. If you’d rather jump right into a few success stories, click on these below:
Locate a Brownfields and remediation expert near you – SCS Staff
Blighted properties are common in many urban areas, and with due diligence often present cost-effective and profitable redevelopment opportunities. Redevelopment of these types of projects is often referred to as Brownfield projects if considering the presence or potential presence of contaminants in the subsurface. Brownfields redevelopments can present great benefits and advantages to the surrounding community.
Advantages of the redevelopment of these properties include: revitalizing a property and surrounding properties, creating jobs, rejuvenating businesses, adding much-needed housing, increasing tax revenue, reducing crime, and increasing the efficiencies and quality of life for residents and workers.
Redevelopment of blighted properties does come with challenges, such as density, parking, financing, city approvals, and more. Blighted properties can have environmental issues that are best addressed proactively to reduce the risk of cost and schedule overruns as future liability issues during redevelopment.
These issues should start to be addressed during due diligence and before construction activities commence to reduce the uncertainty on potential project costs and timeline implications. Environmental issues can sidetrack the development process of some properties but most sites, if handled correctly, can present significant upside if these issues are identified during the due diligence and integrated into the development processes.
Common environmental concerns include:
Identifying environmental risks before the acquisition of properties is critical, as is assigning potential costs to these risks. Depending on the nature of the transaction, these items are often useful as leverage during negotiations.
A Phase I Environmental Site Assessment is a good starting place for identifying whether environmental issues may exist at a property. If a Phase I identifies potential risks, these reports may recommend additional investigation (Phase II) in the form of soil, soil vapor, and groundwater sampling. Phase II is used to identify whether contamination is present (i.e., from fuels, solvents, pesticides, toxic metals), and with enough sampling can determine the extent and magnitude of contamination.
Resolving these impacts can include leaving and managing impacted soil in place as much as possible since the significant cost from impacted soil is digging it up and paying to dispose of it. Regulatory agencies such as the local health departments, if approached under voluntary cleanup assistance programs, can accommodate leaving all or a good portion of impacted soil in place if the risks to human health and the environment are identified and resolved in a mitigation plan.
For more significant contamination issues, such as extensive soil and groundwater contamination from a gas station or dry cleaner releases, funding in the form of State or Federal grants can be available. Obtaining a grant with the help of a qualified environmental consultant can be the difference-maker in acquiring, cleaning up, and redeveloping a blighted property. These grants don’t typically cover all the costs associated with these cleanups but can cover the majority of these costs with some additional time required to do a cleanup.
Developers can also take out an environmental insurance policy to console a nervous lender or investor. Environmental insurance can cover clean-up requirements, third-party claims for bodily injury and property damage, and associated legal expenses resulting from pollution or contamination. Policies with various term lengths and deductible amounts are available to satisfy the concerns of lenders or equity investors.
The redevelopment of blighted urban properties is a necessary part of the life cycle of a property and a community. It’s critical to identify potential environmental risks during the due diligence process – before you choose to purchase the site. With proper planning, the mitigation or remediation of these impacts can be incorporated into the development process and result in a vibrant, profitable project that protects human health and the environment, and help owners, lenders, investors, and users of these properties sleep well at night.
Luke Montague is a professional geologist (PG) and licensed contractor with 19 years of experience primarily in environmental consulting, as well as in the areas of geotechnical engineering, general contracting, commercial and residential development, and property and asset management.
Wednesday, December 11, 10:45 am – 11:45 am, Room 403A
Track 2: Financing Options, Real Estate, & Economic Development
This interactive panel will discuss the nexus between brownfields development and affordable housing and will explore various policy, funding and incentive programs that have been successfully deployed in the US, including a forgivable loan and grant program in California, with an emphasis on creating affordable housing. A case study focused on Comm 22, an award-winning affordable housing project complements the policy and funding conversation. Dan Johnson, Evans Paull, and Jeff Williams share the complexities of tax credit based affordable housing finance of a 200 unit affordable housing and brownfield redevelopment project and the role that brownfields funding played. The premise is that if early-stage project funding were more widely available, combined with informed policy and regulatory approach, that the housing stock in California and elsewhere could be expanded, possibly significantly.
4:30 pm – 6:00 pm, Exhibit Hall, West Hall A
Jim Ritchie and Amy Dzialowski present on the City of West Sacramento and the SCS Brownfields Toolbox that helps take advantage of economy of scale to improve both cost and schedule outcomes, and can result in better buy-in from regulatory agencies, due to an emphasis on an overall vision rather than just a transactional approach. Flexibility is another key concept for reuse planning and as a tool for brownfields sites. SCS demonstrates their expansive experience with an array of brownfields tools including, grant funding and leverage, environmental insurance, and other risk-shifting tools such as “CLRRA” agreements.
At the SCS booth 417, meet Mike McLaughlin, SCS Engineers’ Senior Vice President of Environmental Services and a National Specialist on Brownfields & Landfill Redevelopment and Electric Utilities. He is a licensed engineer and attorney with over 30 years of professional experience providing advice on environmental matters. He is an expert on environmental compliance, remediation, and allocation of response costs.
Mr. McLaughlin advises developers, contractors, lenders and land development professionals on the technical and regulatory requirements for construction on Brownfields’ sites nationwide. His combined engineering and legal background provides an unusual perspective on land development where hazardous wastes or other environmental challenges are present. Redevelopment of closed landfills is an area of special interest; he worked on his first such project in 1976.
Mr. McLaughlin has worked at some three dozen Superfund National Priorities List sites in 17 states, and on scores of regulatory compliance, voluntary cleanup, and remediation projects for commercial, industrial, municipal, and military clients.
Thursday, December 12, 3:30 pm – 4:45 pm, Room 411
Track 1: Sustainability, Livability, Resiliency
This 75-minute clinic provides a fun and engaging hands-on experience that will inspire you to tackle the challenges of stormwater flooding using GSI on brownfields. Experts, including Jonathan Meronek, will explain the applications, techniques, and benefits of using GSI on any project site, including the challenges of implementing GSI on Brownfield Sites. During the guided exercise, participants will break into small think tanks, and each think tank will have an opportunity to design their own solution. Come to this session to soak up information on techniques and strategies for integrating GSI into your community’s overall planning efforts.
Per- and poly-fluoroalkyl substances (PFAS) are receiving increasing attention from regulators and the media. Within this large group of compounds, much of the focus has been on two long-chain compounds that are non-biodegradable in the environment: PFOS (perfluorooctane sulfonate) and PFOA (perfluorooctanoic acid). Long detected in most people’s bodies, research now shows how “forever chemicals” like PFAS accumulate and can take years to leave. They persist even when excreted through urine. Scientists have even tracked them in biosolids and leafy greens like kale. Recent studies have linked widely used PFAS, including the varieties called PFOA and PFOS, to reduced immune response and cancer. PFAS have been used in coatings for textiles, paper products, cookware, to create some firefighting foams and in many other applications.
Testing of large public water systems across the country in 2013 through 2015 found PFAS detected in approximately 4 percent of the water systems, with concentrations above the USEPA drinking water health advisory level (70 parts per trillion) in approximately 1 percent (from ITRC Fact Sheet.) Sources of higher concentrations have included industrial sites and locations were aqueous film-forming foam (AFFF) containing PFAS has been repeatedly used for fire fighting or training.
Source identification is more difficult for more widespread low-level PFAS levels. For example, in Madison, Wisconsin, PFAS have been detected in 14 of 23 municipal water supply wells, but the detected concentrations were below the USEPA’s health advisory levels for PFOA and PFOS. A study of potential PFAS sources near two of the Madison wells identified factories, fire stations, landfills, and sludge from sewage treatment plants as possible sources, but did not identify a specific source.
With the EPA positioned to take serious action on PFAS in late 2019 and 2020, regulators in many states have already started to implement their own measures, while state and federal courts are beginning to address legal issues surrounding this emerging contaminant. State actions have resulted in a variety of state groundwater standards for specific PFAS compounds, including some that are significantly lower than the USEPA advisory levels. These changes mean new potential liabilities and consequences for organizations that manufacture, use, or sell PFAS or PFAS-containing products, and also for the current owners of properties affected by historic PFAS use.
Questions for manufacturers, property owners, and property purchasers include:
If remediation is required, a number of established options to remove PFAS from contaminated soil and groundwater are available, including activated carbon, ion exchange or high-pressure membrane systems. On-site treatment options, including the management of reject streams where applicable, are also available.
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Use these resources to explore more about PFAS each is linked to helpful articles and information.
An environmental insurance claim is simply the response and mitigation of an environmental issue or event paid for by an environmental insurance policy. Similar to an auto or home insurance claim, a company or individual purchases this type of policy to protect them in case a matter arises about their facility, operations, or property resulting in a regulatory requirement for investigation and remediation; forming the basis for a submitted claim. Such responses cost money, often a lot of it, and the environmental insurance policy is there to pay for the costs associated with the investigation and remediation of any environmental issues.
Any environmental issue can result in an environmental claim, so it is essential that you have the right policy in place to cover a particular claim. Typical issues or events include:
Insurance clients submit notice to the insurance company that an environmental issue occurred or was discovered which requires investigation and corrective action. The onus is on the client to provide sufficient information to substantiate a claim submittal. The insurance company reviews this information in their evaluation of coverage for the issue under the policy.
When a new claim is submitted to the insurance company, the client must provide information that substantiates that an issue exists and that further investigation and corrective action is required. Often their substantiation consists of the initial technical details about the nature and extent of the environmental problem. Claims analysts generally have a strong legal background but may lack technical environmental expertise; this is when insurance support services become valuable. The following paragraphs summarize each step in the process and how SCS insurance support assists claims analysts through the process.
Once the insurance company receives a notice of claim, they determine whether the client’s policy provides coverage for the specific issue or event that constitutes the claim. A claims analyst evaluates the specifics of the claim to determine if the associated details and circumstances fall within the specifics of the client’s policy. If so, coverage is usually accepted. If not, coverage is generally denied.
SCS’s role is to provide an evaluation of the technical aspects of the claim so that the claims analyst can take the distilled facts and compare them against the specifics of the policy; often called a “Source and Timing” evaluation. Take, for example, an underground storage tank (UST) release at a gasoline station. In this example, free product (gasoline) is observed in an on-site monitoring well where no free product has previously or recently been identified.
The station owner or their environmental consultant reports the apparent new release to the regulator, and a confirmed discharge is recorded. The property owner than notifies the insurance company of a gasoline release to the environment.
As part of the “Source and Timing” evaluation, SCS’s insurance support reviews tank system leak detection and inventory records, tank system tightness testing records, previous groundwater monitoring data, reports of any earlier releases at the facility, and any other information or data about the facility and the subject release. The goal is to identify:
If enough information is available to make these determinations, then the claims analyst compares the SCS report to the coverage specifics and exclusions included in the policy; determining if the event is covered. The claims analyst will usually try to make a coverage determination on their own if the facts are relatively straightforward, but often that is not the case, and the assistance of insurance support services is necessary.
This process can be straightforward, such as in the case of a tanker truck rollover or industrial facility chemical spill, but is often more complicated when insufficient information is available to make a source and timing determination. In the latter case, the claims analyst issues a Reservation of Rights letter, stating that the insurer is not accepting or denying coverage at this time as the circumstances of the claim are still under evaluation and investigation.
Claims can be denied if the incident occurs before or after the policy period; if the source or type of incident are not included or are specifically excluded under the policy; or if the incident occurred because of the client’s negligence. If coverage is denied no further actions are generally necessary on the part of the insurance company. Whether a claim is accepted or denied is often more complicated than what we’ve discussed here.
The claim is accepted; undoubtedly good news for the client. What happens now is that the claim becomes “Active,” requiring among other things for the claims analyst to set reserves. A reserve is an estimate of what the claim is going to cost the insurance company. Your insurance support consultant can provide a rough approximation of the estimated costs to achieve regulatory closure, which includes all expenses incurred from investigation through remediation, post-remediation monitoring and reporting.
Early in the life of a claim, these are preliminary estimates that are refined as a project progresses, often requiring the claims analyst to adjust their reserves; important to the insurance company as future reserves impact financial forecasts. Insurance support services will develop the cost-to-closure estimate based on all available information and data, as well as their professional experience on similar projects. The insurer wants the most experienced environmental consultants and engineers on the case because their estimates are more likely to be on target and identify potential regulatory issues or risks.
From the insurer’s standpoint, the primary goal is to maintain a high level of responsiveness to their clients and process requests for reimbursement against the claim. The role of your insurance support team can continue by managing quality control and evaluation of site-specific activities; ensuring that the investigation and cleanup are reasonable and appropriate given the environmental conditions at the site, all applicable regulatory requirements, and costs consistent with industry standards for recovery. The client and their environmental consultant are required to provide the insurer and the insurance support consultant documentation of the work as follows:
Over the life of a claim, insurance support may correspond with the project consultant on behalf of the insurer, conduct site visits, and be asked to participate in meetings, conference calls, and mediations. The overall goal of your insurance support consultant is to assist claims analysts in closing a claim in the most time-efficient, cost-effective manner possible within all regulatory rules and guidelines.
Once an active claim−environmental project has achieved regulatory closure, the claims analyst begins the administrative process of closing the claim. From SCS’s insurance support standpoint, all that remains is to obtain the appropriate documentation from the regulator confirming that the subject project is approved for closure and that no further actions are required.
There are other circumstances which may result in closing a claim, such as exceeding the maximum total cost that can be paid out by the policy, non-compliance with policy requirements, or new information coming to light which results in a change in coverage position by the insurer. In some cases, such as when there is a change in coverage position or the cause of the issue can be attributed to a third party equipment failure, the insurer may seek to recover costs expended from the client and third-party policies. That process, called subrogation, may require the expertise of your insurance support specialist and at times their testimony as an expert witness.
There are several ways that SCS helps our insurance clients and other clients. The involvement of insurance companies is becoming more pervasive throughout environmental consulting and engineering in all business sectors. The combination of SCS’s industry expertise, contacts associated with our insurance support services, and our Federal, State, and local level regulatory expertise brings more knowledge and efficiency to each project. SCS offers a wide range of engineering and environmental services, a national presence, and a positive established industry reputation.
Our clients appreciate being able to draw upon our insurance-related expertise to assist them with their submittals, interpreting insurance requirements, and liaising with insurance companies as part of our core capabilities.
Mr. Michael Schmidt is an accomplished industry leader with nearly 30 years of progressively responsible experience in the environmental consulting and environmental insurance industries. He has specific expertise focusing on the evaluation of environmental risks and liabilities associated with insurance claims and underwriting, site investigation and remediation, due diligence, and project management.
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On October 19, 2018, the Treasury issued proposed guidance related to the new Opportunity Zone tax incentive created by the 2017 Tax Cuts and Jobs Act. Opportunity Zones are communities where new investments may be eligible for significant tax incentives. The incentive is designed to spur economic development and job creation.
New tax code Section 1400Z-1 provides the rules for designating Opportunity Zones and Section 1400Z-2 allows a taxpayer to elect to defer certain gains based on timely investment in Qualified Opportunity Fund (QOF) and excludes post-acquisition gains on investments in QOFs held for at least 10 years. The proposed guidance under Section 1400Z-2 addresses the gains eligible for deferral, types of taxpayers who are eligible, the type of eligible interest, the timeframe to invest in the QOF, and the requirement to include previously deferred gains. The proposed regulations also provide rules for self-certifying as a QOF, valuation of QOF assets (90% test), and guidance on qualified businesses. The proposed rule would permit an investor making an investment as late as the end of June 2027 to hold the investment in the QOF for the entire 10-year holding period plus another 10 years through 2047.
In a nutshell, the new law allows a taxpayer who would otherwise owe capital gains tax on an investment to roll-over the proceeds into an Opportunity Zone and thereby defer (or eliminate) capital gains taxes provided certain conditions are met. As many of the Opportunity Zones will be designated in areas containing Brownfields redevelopment opportunities, SCS expects many of our clients will be interested in this opportunity to do well by doing good. If you are interested in investing in a potential brownfield site, contact SCS Engineers to help you evaluate and manage environmental concerns associated with your site. Visit www.scsengineers.com to learn more.
The following are links to the press release and proposed guidance:
The Treasury plans to present additional guidance before the end of the year, and a public hearing is scheduled for January 10, 2019. Taxpayers may submit comments by 60 days (around the third week in December 2018) after the publication of the proposed guidance in the Federal Register at www.regulations.gov. Additional guidance is expected to include the meaning of “substantially all”; transactions that may trigger the inclusion of gain that has been deferred; the reasonable period for a QOF to reinvest without paying a penalty; administrative rules regarding the investment standard; and, information-reporting requirements. SCS will provide an update when the additional guidance becomes available.
For additional information, you may contact SCS Engineers at or the blog Author, Christine Stokes.
SCS Engineers is working with Manchester Financial Group on the $1.5 billion, 3 million square foot development named Manchester Pacific Gateway. “This iconic development on San Diego’s waterfront will consist of four double-size blocks and include a 17-story, 372,000-square-foot Navy headquarters as well as office space, hotels, retail, parking, plazas and green space,” said Perry Dealy, Project Manager.
The complex will add 2,500 underground parking spots and provide pedestrian and vehicle connections between downtown San Diego and San Diego Bay. The hotels alone will generate more than $12 million a year in Transient Occupancy Tax revenue and more than $10 million annually in property taxes. Pacific Gateway is expected to add more than 2,400 construction jobs and nearly 4,000 permanent jobs to the region.
Manchester Financial Group recently celebrated its groundbreaking on June 1st with plans for mass excavation to commence on August 1, 2018. Manchester Pacific Gateway is sited on the Navy Broadway Complex, which covers eight blocks of Downtown San Diego, bordered by Pacific Highway, Broadway and Harbor Drive.
SCS will provide environmental engineering and oversight of the soil excavation project. The plans include excavating approximately 700,000 cubic yards of soil, which is the entire site footprint down 30 feet. During the grading, SCS will direct the removal of soil for beneficial reuse or proper disposal ensuring the health and safety of workers, the community and eventually tenants.
“We supported the redevelopment since its inception and during the intricate planning years,” said Dan Johnson, SCS Vice President and a National Expert on Brownfields and Landfill Redevelopment. “It’s exciting to be part of such a transformative project for San Diego.”
Duluth, GA – SCS Engineers, a leader in environmental and solid waste engineering, recently relocated from Alpharetta to a larger, more strategically located office in Duluth, Georgia. The new office supports SCS’s continued development in the Southeast, our client success-driven growth, and accommodates our growing professional staff.
SCS is always on the lookout for talented senior level professionals in the environmental consulting community. The Atlanta Environmental Services (ES) group is seeking experienced, humble, hungry, and smart senior level consultants with client relationships and business development capabilities to join our team.
SCS Engineers – Atlanta
3175 Satellite Blvd
Building 600, Suite 100
Duluth, GA 30096
If you are interested or know anybody who is interested, reach out to . You may also review our open positions on the SCS Careers Page.
Innovative projects have sprung up over the years that house retail, apartments, golf courses, conference centers and hotels. Engineers in the solid waste space are applying several structural design techniques that other industries have leveraged for years like building on piles, which has historically been done on marshlands and other unstable ground. They’re also designing floating foundations that allow for movement and making adjustments when differential settlements happen.
Over the years, SCS has designed landfill-related systems for dozens of projects, mainly apartments, business complexes, entertainment complexes, hotels, parks and golf courses. In the past three years,SCS has fielded calls from developers looking into options, resulting in projects moving into the development stages. From small to the largest landfill redevelopment project in the nation , this article gets you started and leads to more information.