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BUSH SEEN AS RECEPTIVE ON ENVIRONMENT

By Dave Bodamer

Whitman

Six months into President George W. Bush’s term, shopping center industry leaders say they are optimistic about working with his administration on environmental issues.

They cite several examples of industry-friendly moves by the Bush White House: o its backing of a Supreme Court ruling on wetlands permitting o its work with the Senate in getting an ICSC-backed brownfields reform bill passed o its likely nominee to head the Army Corps of Engineers. In one of the first actions of his term, the president and the Environmental Protection Agency (EPA) voiced support for a Supreme Court ruling regarding isolated wetlands. The high court ruled in the case of Solid Waste Agency of Northern Cook County vs. the U.S. Army Corps of Engineers that the Corps cannot require a property owner or developer to obtain a permit on isolated wetlands. Previously, the Corps required developers to obtain permits on all construction that affected wetlands, but the ruling lifted that requirement on isolated wetlands — or wetlands not connected with any navigable surface water.

"I would characterize the change as saying that we are seeing much more of a common-sense approach to environmental policy," said Charles Grizzle, a Washington, D.C.-based consultant on environmental issues who has worked with ICSC for the last half-dozen years. Grizzle was a former systems administrator at the EPA before becoming a consultant.

"Overall there will be a more balanced approach, and it will be less tilted toward an activist agenda, but having said that, it’s not going to be what I would characterize as a rollback in environmental protection."

Shopping center industry officials are confident that wetlands permitting could be eased through congressional action and regulatory adjustments.

The second positive sign for the shopping center industry is that the Senate passed a brownfields reform bill unanimously and the House, at press time in June, was working on a similar measure. President Bush and EPA Administrator Christie Whitman have both pledged support for the bill, which will reduce the liability risks in such projects. "It appears at this stage that the administration and the EPA are willing to look at policy in a more holistic manner in regard to cost to private companies and the business community and benefits to the business community and environment," said William H. Hoffman, ICSC’s manager of environmental issues.

The bill releases developers from liability stemming from contamination that was not caused on-site, or in the case that worse contamination than the developer thought is discovered. Those risks have dissuaded developers in the past from remediating and redeveloping brownfield sites. But the bill is just a first step. Further legislation may be needed.

"Some of the specifics are less than ideal," said Ned Abelson, chair of ICSC’s Toxic Waste Task Force. "For example, there is an effort to provide liability clarifications concerning contiguous properties, but it’s almost written from a lawyer’s point of view rather than a commonsense one. There are places where the wording is so vague where things could be more favorable to real estate owners and developers. É It leads to uncertainty and that’s contrary to what people are trying to get at."

The surprise defection of Sen. James Jeffords from the Republican Party in May could have some effect on the industry. After the Senate moved into Democratic control, Jeffords was handed the chairmanship of the Environment and Public Works committee, which is in charge of issues such as brownfields and wetlands. However, because the original brownfields legislation passed the Senate by a 99-0 vote, industry officials feel confident that the change will not affect that legislation when it comes time for the Senate and House to resolve any differences between the bills.

"Because S.350 passed 99-0, Jeffords taking over chairmanship of the Public Works committee won’t affect legislation," Hoffman said. "The bill is something that the whole Senate wants to get done this year.

"As far as other environmental issues go, right now we don’t anticipate that his assuming the chairmanship will change the dynamics of the committee or what the committee wants to do. But it’s too early to tell right now for sure." A bigger obstacle could be the battle in the House. As of press time, two different brownfields reform bills were expected to be introduced. One bill, backed by Paul Gillmor (R-Ohio), chairman of the House Environment and Hazardous Materials Subcommittee, would be similar to the Senate bill, only with more provisions to protect developers. But insiders also expect a Democratic-backed measure, about which few details are known.

In terms of wetlands, shopping center industry officials are confident that the wetlands permitting could be eased both through congressional action and regulatory adjustments ordered by President Bush, Whitman or the Army Corps of Engineers. However, any reform on wetlands permitting is at least a year away, if not more.

The issue is important because securing permits to construct on wetlands takes at least a year, if not longer. For example, The Mills Corp. has been trying for more than two years to get a permit to build its Meadowlands Mills project in New Jersey.

"The wetlands permit is the first one I put in for and the last one I get on any project," said ICSC Divisional Vice President James E. Maurin, chairman and CEO of Stirling Properties, a New Orleans-based development firm.

Right now the permit most often used by shopping center owners is Nationwide Permit 26, which went into effect in June 2000. However, large regional malls often need to go through a more lengthy permitting process. ICSC research estimates that the cost of permitting is more than $300 million annually because of the delays and extra work the Corps does to authorize projects. Current regulations mandate that any project that affects more than a half acre of wetlands must be permitted — and virtually every project falls into that category.

According to several sources, President Bush is leaning toward former Rep. Michael Parker (R-Miss.) as his nominee for the position of assistant secretary of the Army for civil works, which would put him in charge of the Army Corps of Engineers. Parker’s appointment would be welcomed by the industry. Having a sympathetic party in charge of the Corps could have a marked effect on its policy, which is important because the Corps is in charge of issuing permits for all construction affecting wetlands in the United States.

Parker served five terms in Congress and mounted an unsuccessful bid for governor of Mississippi. He served three as a Democrat and then won two more elections after switching his party affiliation to Republican. During his time in Congress, Parker served on the Transportation and Infrastructure Committee and has had a lot of firsthand experience dealing with issues affecting the Mississippi River and its delta.

"In terms of the shopping industry, he would be a very welcome change," Grizzle said. As a whole, ICSC members said they feel fairly optimistic about making further headway in both the wetlands and brownfields issues.

"It’s always such a crystal ball sort of thing, but there seems to be a fair amount of momentum," Abelson said.

"I think that this administration is more sensitive to some of the concerns that business in general has in regards to environmental regulation. Their focus is more heavily weighted toward commercial interests than environmental groups. In previous administrations, those groups struck a different balance."

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