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onnecticut's industrial history has left behind a legacy of contaminated sites, known as brownfields, which require environmental remediation to be redeveloped. Streamlining this process is crucial for the state's economic growth.
The commercial and industrial real estate industry in Connecticut has been waiting for the Transfer Act to sunset, as many stakeholders believe it hinders the transfer and redevelopment of contaminated properties. However, a new threat looms: Perfluoroalkyl and Polyfluoroalkyl Substances (PFAS), also known as "forever chemicals," which can persist in the environment for over 1,000 years.
The Transfer Act is expected to sunset in 2025, replaced by a release-based cleanup program. This new approach will focus on cleaning up properties only when hazardous substances are released or historical releases are identified. The transition has been delayed due to challenges in drafting comprehensive regulations, but the Regulation Review Committee appears close to approving them.
The real estate industry is eagerly anticipating the change, which is expected to be a net positive. However, there may be implementation issues and unintended consequences. Meanwhile, PFAS pose a significant threat to the market, with potential impacts on property values and due diligence costs.
Regulations are being implemented at the federal level, including designating nine PFAS chemicals as hazardous constituents and setting drinking water standards for several compounds. This will affect the value of properties contaminated by PFAS and increase the cost and time required for due diligence. The widespread migration of PFAS means many properties will be identified with some level of contamination, necessitating more extensive assessments.
The uncertainty surrounding PFAS toxicity levels and regulation at extremely low concentrations (parts per trillion) may lead prospective purchasers to walk away from properties where PFAS are detected. Establishing comprehensive cleanup standards and remediation guidelines is complicated by the lack of robust toxicological data and scientific consensus on safe exposure levels.
