Delaware Public Media

Coastal Zone update bill seeks to balance economy, environment

May 26, 2017

At the old Claymont Steel site in northern New Castle County, some 425 acres of land sits empty and derelict, dotted with piles of brick and the rusting remnants of the Evraz steelworks that operated there until it closed in December 2013.

A portion of the site, crossed by Philadelphia Pike, lies within Delaware’s Coastal Zone, an area that has been designated off-limits to new industrial development since the eponymous Coastal Zone Act was passed by the state legislature in 1971 to protect the natural environment at the Claymont location and a string of other sites along the Delaware coast.

With nearby road, rail and port links to markets and its location in the heart of the huge U.S. northeast market, the Claymont site is among those that would have been sought by industrial developers if not for the ban on new heavy industry, and the chemical contamination that requires cleanup by any new owner.

The former Claymont Steel site, part of which is in Delaware's Coastal Zone, could be redeveloped if new Coastal Zone legislation becomes law.
Credit Jon Hurdle / Delaware Public Media

After years of pressure from the business community to ease restrictions on the Coastal Zone, unused or under-used sites like Claymont Steel may now be in play again, thanks to new legislation that would allow new industrial development for the first time in almost half a century.

The Coastal Zone Conversion Permit Act (HB190), introduced on May 18, would allow the potential redevelopment of 14 sites for industrial uses that have not been permitted under the existing law. All but one of the sites are in New Castle County, and all were contaminated to some degree by their previous occupants.

The bill’s two Democratic sponsors, Rep. Ed Osienski (D -Newark) and Sen. Bryan Townsend (D -Newark), argue that reopening sites like Claymont Steel to industrial developers would generate badly needed jobs while ensuring that the natural coastline – nearly all of which would not be covered by the legislation – remains protected.

“This legislation attempts to ensure the proper balance between environmental protection and economic growth,” Sen. Townsend said in a statement. “There is no question that the 1971 Coastal Zone Act was a landmark piece of legislation but the unintended consequence has been abandoned, polluted sites that were always intended to be in operation – regulated, clean, remediated, but in operation.”

The 14 sites were chosen because they already had industrial activity when the current law was passed in 1971. Osienski said he resisted calls by the business community to add other sites to the list because he wanted to strike a balance between the economy and the environment.

“I was afraid we would get a bill that opened it up too much,” he said. “I wanted to give industry an opportunity to open up on the 14 sites that were active back in 1971, and also protect our coast.” Together, the sites represent about 2 percent of the overall Coastal Zone, he said.

“There was no way we were going to open up virgin property to heavy industry,” Osienski said. “We have 14 sites that are basically brownfields, that are sitting there barren and no activity. If we are going to allow heavy industry in, we want a responsible business to help clean this stuff up, and that they are going to stick around and create some jobs.”

Osienski predicted that the bill will become law because it has backing from both parties, as well as from the business community, including the Business Roundtable and the construction industry.

“They were really getting some support there and I believe they might have strong support from my colleagues, so I wanted to make sure we ran something that struck that balance,” he said.

He hopes the bill will get a special committee reading on June 5 or June 7 and said it could be voted on by the full House of Representatives as early as June 8.

The legislation would strengthen environmental protections by requiring developers to assess the environmental and economic impacts of previous, existing or proposed heavy industry, and to show that they will comply with a law requiring the cleanup of hazardous sites.

In a state that is exceptionally vulnerable to rising ocean levels, any developers of the 14 sites would also face a new requirement – beyond that set by the existing law -- to submit a plan to deal with sea-level rise, such as showing that facilities such as tanks would be resilient to flooding.

The bill would also allow the transfer of bulk materials at nine sites – removing a ban under the current law – but would retain a prohibition on new refineries, pulp and paper mills, and incinerators in the Coastal Zone.

Rep. Osienski said the bill aims in part to fully remove contaminants from the sites – as opposed to the current “cap and contain” technique overseen by state officials that leaves toxic material vulnerable to disturbance by development, or by future sea-level rise, which could result in contaminants leaking into the Delaware River.

He said the reform would require a higher standard of cleanup than that currently being overseen by either the Department of Natural Resources and Environmental Control or the U.S. Environmental Protection Agency. Private companies would be required to remove any sources of contamination such as leaking tanks or “hotspots” in the soil that they may find while redeveloping a site, he said.

Late Thursday, DNREC released a report on the status of cleanup operations at the 14 sites. It said that it is usually cost-prohibitive for state or federal authorities to return a remediation site to a ‘pristine’ condition. Therefore, remedies may include restrictions on future use such as banning residential development, or requiring future soil-cap inspection.

DNREC’s list of cleanup sites included Delaware City Refinery where there is a “large plume of petroleum hydrocarbons” beneath the site; soil contamination has been found, and chlorinated volatile organic compounds have been identified in ground water but are likely from off-site sources.

The previous owner, Motiva Enterprise, is the financially responsible party for corrective action under the Resource Recovery and Conservation Act, DNREC said.

At the General Chemical site in New Castle County, the EPA is leading a cleanup of arsenic, lead, and other contaminants, which have been found in soil, groundwater, and Delaware River sediments, the report said.

DNREC is leading the cleanup at the Chemours Edgemoor site, where financial responsibility is held by the Diamond State Port Corp.

The bill also contains a new provision that would require an applicant to post a financial surety to ensure that remediation continues even if the new owner abandons the site.

Gov. John Carney (D -Delaware), who signaled a new effort to update the law when he spoke to state lawmakers in March, said the law would “open up these sites for additional redevelopment and job creation while maintaining a commitment to environmental protection.”

Some environmentalists supported the plan to combine economic growth with environmental protection. “We are supportive of reasonable amendments to the Coastal Zone Act,” said Richie Jones, director of The Nature Conservancy in Delaware, before the bill’s details were published. “We see a net positive in cleaning up toxic sites, and it’s our understanding that the bill contemplates business taking on that responsibility, which we think is sensible.”

But other environmentalists attacked the bill, saying it would endanger the environment and the health of people who live near redeveloped sites.

“During an era when protecting clean water is a priority for Senator Townsend, he places the integrity of the Delaware River and its tributaries at risk,” said Mark Martell, Conservation Chair of the Delaware Audubon Society, in a statement. “He is essentially fouling the Delaware Estuary with this bill, thinking somehow that financial guarantees and offsets could mitigate the loss of critical habitat for birds and the ecosystem that they rely on to survive.”

Business leaders have long argued that the existing law is a major deterrent to investors.

James Dechene, senior vice president of government relations for the Delaware State Chamber of Commerce, welcomed the bill as a “first step” toward creating more favorable conditions for industrial investment on the coastal sites.

He said business leaders had proposed that the legislation include “a few more” sites, and would like to have seen a streamlined appeals process for applications that are initially rejected, but he said the business community is generally encouraged that the bill proposes a long-overdue update to the law.

“This is the first real revision for almost 50 years of the legislation,” Dechene said. “We’re hopeful that it’s not going to be another 50 years to create worth.”

He predicted that the bill will pass the legislature given that it has support from both parties, and that the plan offers the best chance of cleaning up toxic sites that would not otherwise be remediated by the state because of prohibitive cost.

“It falls to the business community to remediate these sites and to put new business on them,” he said.

But as of May 25, support for the bill was weighted toward the Republican side of the aisle. 14 Republicans have signed on as cosponsors compared to only five Democratic backers, suggesting that it may be a heavy lift to get it through the legislature, a prospect that Gov. Carney acknowledged in his March speech to lawmakers.

“There is going to be legislative pushback from the environmental community, but I do think there is strong support for the bill,” Osienski said.

Rep. John Kowalko, (D-Newark South), said he would likely vote against the bill because he is a strong defender of the existing law, and argued that investors are unlikely to pay the large sums needed to remediate the sites to the higher standard that would be required by the bill.

“I don’t believe there is anybody out there that is going to be interested in making that investment,” he said.

Asked how the sites might be cleaned up in the absence of more private money, Kowalko argued that more federal money should be provided.

Kowalko said the Chamber of Commerce had “fabricated” the argument that easing restrictions on the Coastal Zone would boost the economy, especially in the proposed bulk-transfer operations which he said would not create jobs.

“It’s mind-boggling to me that they would present this as a creator of jobs,” he said. “There are no jobs in bulk transfer.”

Advocates for an update to the law argue that allowing redevelopment on the sites would attract industrial clients, and the jobs that come with them, but it’s not immediately clear who those clients might be.

David Swayze, an attorney, represents both D2 -- an investment group that owns a New Castle County site formerly occupied by General Chemical – and Sunoco Logistics, the transmission arm of the oil giant whose Marcus Hook terminal across the border in Pennsylvania adjoins some 40 acres of Sunoco-owned land that is part of the Coastal Zone.

If the bill becomes law, D2 will be looking for one or more tenants in addition to Braschem, which already makes polypropylene at the site, Swayze said. He predicted strong demand for the site’s dock; the availability of pipelines and rail links, and its proximity to suppliers.

“There’s a great deal of interest in it,” he said.