April, 2015
For more than 15 years, the Illinois EPA’s risk-based program has issued No Further Remediation (NFR) letters for thousands of sites that allow residual contamination to remain in-place by relying upon engineered barriers and institutional controls to minimize exposure to soil and/or groundwater impacts. While this has proven to be a very practical and effective approach to achieving regulatory closures, it has also created some confusion within the real estate community as many people misinterpret the letter to signify that the site is “clean” (“…See, here’s my NFR letter.”). Whereas if the NFR letter was issued after 1997, it is more likely that the site is still contaminated, but just not dirty enough to warrant further action from a regulatory standpoint. Therefore, it is important to understand this distinction when evaluating potential cost considerations in the transfer of real estate with existing NFR letters.
A NFR letter provides the best form of state certification available to demonstrate that a site is in compliance with environmental regulations and does not represent a threat to human health or the environment. A site may be issued a “conditional” NFR letter with an industrial/commercial deed restriction, a groundwater use prohibition, or the requirement to maintain engineered barriers such as concrete and asphalt pavement, or 3-feet of clean soil in unpaved landscaped areas. All these Illinois EPA-approved risk-based options are common components of NFR letters issued since 1997 and directly imply that some degree of contamination still remains on the site. While, at the end of the day, that may not make a substantial difference in your ability to use the site as-is or to get financing from a lender, it may have a significant impact on the redevelopment of the property. An understanding of this important aspect of regulatory closures is key to a proper evaluation of the practical considerations of buying (or selling) real estate with a conditional NFR letter.
Over the past 25 years, Pioneer has successfully obtained nearly 500 NFR letters (ranking as one of the top 2 in the entire state out of over 700 total firms) for its clients through the Illinois EPA and its work on environmental remediation and underground storage tank (UST) closure projects. To view a sample NFR letter, please click the link below: