Redeveloping Contaminated Properties: What Brownfield Developers Need to Know

Brownfield redevelopment remains one of the most effective paths to converting underused, contaminated land into productive assets — warehouses, housing, mixed-use developments, and industrial facilities. But the legal landscape governing these projects has shifted significantly over the past two years. The federal designation of PFAS compounds as hazardous substances under CERCLA, evolving RCRA proposals, a recent D.C. Circuit decision upholding those designations, and new state funding commitments have all changed the calculus for developers evaluating contaminated properties.

This Client Alert outlines the key legal issues facing brownfield developers today and the practical steps you should take before, during, and after acquiring and redeveloping a contaminated site.

1. The PFAS Designation: A Paradigm Shift for Brownfield Projects

On May 8, 2024, EPA finalized a rule designating perfluorooctanoic acid (PFOA) and perfluorooctanesulfonic acid (PFOS) as hazardous substances under Section 102(a) of CERCLA. The rule became effective on July 8, 2024. In September 2025, EPA confirmed it would retain these designations, and in August 2026, the D.C. Circuit denied all petitions challenging the rule in Chamber of Commerce v. EPA, No. 24-1193.

What this means for developers:

i.  PFOA and PFOS are now subject to CERCLA’s strict, joint, and several liability framework. Any person who is a current or former owner or operator of a facility where these substances were released, or who arranged for their disposal or transport, is a potentially responsible party (PRP).

ii.  Releases of PFOA or PFOS that meet or exceed the reportable quantity of one pound (454 grams) within a 24-hour period must be reported to the National Response Center within 24 hours.

iii.  PFAS contamination is pervasive. These chemicals were used in firefighting foam, manufacturing, food packaging, and countless industrial applications. Sites that were never considered “contaminated” may now have reportable conditions.

iv.  Brownfield grant recipients must demonstrate they are not potentially liable under CERCLA Section 107 for PFOA or PFOS contamination in order to use EPA funds for cleanup of those substances. This adds a new gating requirement to every brownfield grant application where PFAS may be present.

2. CERCLA Liability: The Framework Every Developer Must Understand

CERCLA imposes strict, joint, and several liability on four categories of parties:

i.  Current owners and operators of a facility where hazardous substances have been released or are threatened to be released.

ii.  Past owners and operators who owned or operated the facility at the time of disposal.

iii.  Arrangers — persons who arranged for the disposal, treatment, or transport of hazardous substances.

iv.  Transporters who accepted hazardous substances for transport and selected the disposal facility.

Liability is strict (no fault required), joint and several (one party can be held responsible for the entire cleanup), and retroactive (applies to contamination that occurred before CERCLA was enacted). For a developer acquiring a contaminated site, the single most important question is: which liability defense applies, and can I qualify for it?

3. The Three Landowner Defenses

CERCLA provides three defenses that can shield a developer from liability for pre-existing contamination. Each requires specific actions before, during, and after acquisition.

3.1 Bona Fide Prospective Purchaser (BFPP)

The BFPP defense, codified at CERCLA Sections 101(40) and 107(r), is the primary shield for brownfield developers. To qualify, a purchaser must:

i.  Acquire the property after January 11, 2002.

ii.  Conduct “all appropriate inquiries” (AAI) into previous ownership and uses before closing — typically through a Phase I Environmental Site Assessment meeting the ASTM E1527-21 standard, and where warranted, a Phase II investigation.

iii.  Not be affiliated with any liable party through a familial relationship, contractual or corporate relationship, or reorganization of a business entity.

iv.  After acquisition, comply with all land-use restrictions and institutional controls, not impede any ongoing or future response action, provide cooperation and access to EPA, comply with information requests, and exercise appropriate care with respect to hazardous substances found on the property.

v.  Provide all legally required notices regarding the discovery or release of hazardous substances.

Critical point: BFPP status is not a one-time qualification. It can be lost at any point if the purchaser fails to exercise appropriate care, impedes a response action, or fails to comply with institutional controls. Maintaining the defense is an ongoing operational obligation.

3.2 Innocent Landowner Defense

Available to a purchaser who acquired the property without knowledge or reason to know of contamination, despite having conducted AAI. This defense is harder to sustain in practice because the “reason to know” standard is objective and courts interpret it strictly.

3.3 Contiguous Property Owner

Protects an owner whose property is contaminated solely by migration from an adjoining or nearby facility, provided the owner did not cause, contribute to, or consent to the release and satisfies the AAI and continuing-obligations requirements.

4. Due Diligence: The Non-Negotiable Foundation

No brownfield acquisition should close without a structured environmental due diligence sequence:

4.1 Phase I Environmental Site Assessment (ESA)

Conducted under ASTM E1527-21, the Phase I identifies recognized environmental conditions (RECs) through records review, site reconnaissance, and interviews. It is the minimum threshold for satisfying the AAI requirement. A Phase I that is stale (more than 180 days old at closing, or with components older than one year) will not satisfy AAI.

4.2 Phase II ESA

When a Phase I identifies RECs, a Phase II investigation involving soil, groundwater, and/or soil-vapor sampling is necessary to characterize the nature and extent of contamination. In 2026, every Phase II on a brownfield site should include PFAS sampling — even if historical use does not suggest PFAS sources — because background PFAS contamination from biosolids, atmospheric deposition, and firefighting foam is now widespread, and the CERCLA designation makes any detection above reportable-quantity thresholds a compliance issue.

4.3 PFAS-Specific Diligence

Developers should specifically investigate:

i.  Whether the site or neighboring properties were used for firefighting training, manufacturing, chrome plating, semiconductor fabrication, or other PFAS-intensive operations.

ii.  Whether biosolids or treated wastewater were applied to the land.

iii.  Whether the site is within the plume of a known PFAS source.

iv.  Current and proposed drinking water sources near the site, given EPA’s Maximum Contaminant Levels for PFOA (4 parts per trillion) and PFOS (4 parts per trillion) under the Safe Drinking Water Act.

5. RCRA: What Is Coming Next

While no PFAS compound is currently listed as a RCRA hazardous waste, EPA proposed in February 2024 to add nine PFAS compounds — PFOA, PFOS, PFBS, HFPO-DA (GenX), PFNA, PFHxS, PFDA, PFHxA, and PFBA — and their salts and structural isomers to the list of RCRA hazardous constituents. EPA indicated it intended to finalize this rule in April 2026.

In May 2026, EPA withdrew a separate companion rule that would have extended RCRA corrective-action authority to non-listed substances, but the withdrawal did not affect the PFAS listing proposal, which remains pending.

What developers should watch:

i.  If finalized, the RCRA listing would trigger corrective-action obligations at facilities subject to RCRA permits and could expand the universe of sites requiring PFAS investigation.

ii.  Disposal costs for PFAS-impacted soil could increase dramatically if PFAS-containing soil must be managed as hazardous waste rather than solid waste.

iii.  Developers acquiring sites with RCRA permits or interim-status facilities should model worst-case disposal costs assuming PFAS listing is finalized.

6. EPA Enforcement Discretion — and Its Limits

EPA’s PFAS Enforcement Discretion and Settlement Policy directs enforcement resources toward entities that significantly contributed to PFAS releases — primarily PFAS manufacturers, entities that used PFAS in manufacturing processes, federal facilities, and major industrial dischargers. The policy generally extends leniency to “passive receivers” such as municipalities, water utilities, municipal landfills, municipal airports, and local fire departments.

Developers should understand two critical limitations:

i.  The policy is non-binding. It reflects current EPA priorities, not a legal safe harbor. A future administration could revise or withdraw it.

ii.  It does not shield against private contribution claims. Even if EPA declines to pursue a brownfield developer, other PRPs, neighboring property owners, or successor entities can bring cost-recovery or contribution actions under CERCLA Sections 107 and 113. Private-party PFAS litigation is accelerating, and enforcement discretion does nothing to prevent it.

7. State Voluntary Cleanup Programs: A Parallel Path

Every state operates some form of voluntary cleanup program (VCP) or brownfield program that provides an alternative to federal CERCLA cleanup. For developers, state programs offer several advantages:

i.  Liability protection. Most state VCPs issue a covenant not to sue, no-further-action letter, or certificate of completion upon successful cleanup, providing protection against future state enforcement.

ii.  Risk-based cleanup standards. State programs typically allow risk-based corrective action tailored to the site’s intended use (residential, commercial/industrial, restricted), which can significantly reduce remediation costs.

iii.  Regulatory certainty. Working within a VCP provides a defined process, agency oversight, and a clear endpoint — all of which improve project financing and timelines.

Key state developments in 2025-2026:

i.  Ohio — Since 2021, the General Assembly has committed $900 million to support brownfield assessments and cleanup, reflecting strong bipartisan support for brownfield redevelopment.

ii.  Michigan — The fiscal year 2026 budget includes $77.6 million for the Renew Michigan program supporting brownfield redevelopment, site remediation, and sustainability projects.

iii.  New York — The Brownfield Cleanup Program issued 43 Certificates of Completion and accepted 64 new sites in 2025, with a growing focus on affordable-housing development on remediated brownfields.

iv.  Missouri — The Brownfields/Voluntary Cleanup Program under MoDNR continues to accept sites and issue letters of completion, with particular relevance for sites within Superfund administrative boundaries.

Important caveat: State VCP protections generally do not preempt federal CERCLA liability. A state no-further-action letter protects against state enforcement but does not bind EPA or prevent federal cost-recovery actions. Developers need both state and federal liability strategies.

8. Transaction Structuring and Risk Allocation

Environmental risk does not disappear at closing — it gets allocated. Effective brownfield transaction structures include:

8.1 Environmental Representations and Warranties

The seller should represent the known environmental condition of the property, disclose all environmental reports, identify all permits and regulatory actions, and warrant compliance with environmental laws through closing. These representations should survive closing for a defined period (typically 3-7 years, or longer for environmental matters).

8.2 Indemnification

The seller should indemnify the purchaser for pre-existing contamination, third-party claims arising from historical releases, and any regulatory enforcement related to conditions predating the sale. Indemnification provisions should address:

i.  Whether the indemnity is capped or uncapped.

ii.  Whether it covers response costs only or also includes diminution in value, lost profits, and consequential damages.

iii.  Whether the seller has the financial capacity to stand behind the indemnity — or whether a parent guarantee, escrow, or environmental insurance is needed.

8.3 Environmental Insurance

Pollution legal liability (PLL) policies can backstop transaction risk by covering:

i.  Pre-existing unknown contamination discovered after closing.

ii.  Third-party bodily-injury and property-damage claims.

iii.  Cleanup cost overruns beyond the remediation budget.

iv.  Regulatory reopeners — situations where a completed cleanup is later deemed insufficient.

For PFAS-impacted sites, confirm that the policy does not exclude PFAS or “emerging contaminants” — many legacy policies do.

8.4 Purchase-Price Adjustments

Negotiate environmental remediation costs into the purchase price through credits, escrow holdbacks, or seller-funded remediation obligations with defined scope and completion criteria.

9. Construction-Phase Compliance

Redeveloping a contaminated site triggers a distinct set of regulatory obligations during construction:

i.  Materials Management Plans (MMPs) — Required for most brownfield construction projects, MMPs govern how contaminated soil and groundwater are handled, stockpiled, reused on-site, or disposed of off-site. Compliance is typically a condition of the site’s regulatory approval and, on institutional projects, a contractual obligation to the property owner.

ii.  Health and Safety Plans (HASPs) — OSHA HAZWOPER training (29 CFR 1910.120) may be required for workers in contact with contaminated media. The general contractor is responsible for ensuring all workers and subcontractors comply.

iii.  Waste Manifesting and Disposal — Contaminated soil removed from the site must be profiled, manifested, and transported to an approved facility. Generator status, which determines who signs the manifest and bears generator liability, is a critical allocation issue between the property owner, developer, and general contractor.

iv.  Stormwater and Erosion Controls — Construction on contaminated land amplifies the risk that contaminants migrate off-site via stormwater runoff, creating new releases and potential CERCLA liability.

v.  Dust and Air Monitoring — Particularly relevant for PFAS, metals, and volatile organic compounds, dust suppression and air monitoring protect both workers and the surrounding community.

10. Institutional and Engineering Controls

Most risk-based cleanups do not restore a site to pristine condition. Instead, residual contamination is managed through:

i.  Institutional controls — Legal mechanisms such as deed restrictions, environmental covenants, and activity and use limitations (AULs) that restrict future land use to prevent exposure to residual contamination.

ii.  Engineering controls — Physical measures such as caps, vapor barriers, sub-slab depressurization systems, and permeable reactive barriers that contain or treat contamination in place.

Developers must understand that institutional and engineering controls are not one-time installations — they carry perpetual monitoring, maintenance, and reporting obligations that run with the land and bind successors. Failure to maintain them can void BFPP status and reopen regulatory liability.

11. Emerging Contaminant Risks Beyond PFAS

While PFAS dominates the current regulatory landscape, brownfield developers should be aware of other contaminants receiving increased scrutiny:

i.  1,4-Dioxane — A solvent stabilizer that is highly mobile in groundwater, resistant to natural degradation, and subject to tightening state standards.

ii.  Radionuclides — Particularly relevant at sites with historical oil-and-gas brine disposal, where Radium 226/228 may be present in soils.

iii.  Vapor intrusion — Not a new contaminant, but vapor-intrusion investigation and mitigation requirements continue to expand, affecting both pre-acquisition diligence and post-construction obligations.

iv.  Microplastics — An area of emerging regulatory interest that could affect sites with historical waste-management or industrial operations.

12. Federal and State Funding Opportunities

Brownfield developers can access substantial public funding to offset assessment and cleanup costs:

12.1 EPA Brownfields Grants

In June 2026, EPA announced nearly $250 million in FY2026 Brownfields Multipurpose, Assessment, and Cleanup grants to more than 190 recipients nationwide. The program has leveraged more than $40 billion in private investment since inception. Available grant types include:

i.  Assessment Grants — up to $1 million for site inventories and planning.

ii.  Cleanup Grants — up to $4 million for direct remediation of owned sites.

iii.  Multipurpose Grants — up to $1 million combining assessment and cleanup activities.

Critical deadline: Without Congressional action, the EPA Brownfields program will run out of funding on September 30, 2026. Developers should apply for current-cycle grants immediately and monitor legislative developments.

12.2 State Incentives

Most states offer brownfield tax credits, tax increment financing (TIF) districts, and direct grant or loan programs that can be layered with federal funding.

13. Action Items for Developers

Developers evaluating or actively redeveloping contaminated properties should take these steps now:

i.  Include PFAS in every Phase II investigation, regardless of historical site use.

ii.  Confirm BFPP eligibility before closing — and build ongoing compliance obligations into your project management and operational plans.

iii.  Budget for PFAS remediation uncertainty. Cleanup standards are set at parts-per-trillion levels, technically feasible remediation options are limited, and disposal costs are rising.

iv.  Negotiate environmental indemnification and insurance as core deal terms, not afterthoughts.

v.  Engage state VCPs early. Regulatory certainty accelerates project timelines, improves financing, and provides state-level liability protection.

vi.  Apply for EPA Brownfields grants before the September 30, 2026 program sunset.

vii.  Monitor the RCRA PFAS listing proposal. If finalized, it will materially increase the cost of managing PFAS-impacted soil and groundwater.

viii.  Retain environmental counsel before signing a purchase agreement. The liability allocation, due diligence scope, and regulatory strategy decisions that matter most are made at the front end — not after you own the site.

For questions about how these developments may affect your brownfield redevelopment or acquisition plans, contact Michael Blumenthal or any member of Frantz Ward’s Environmental Practice Group.

This Client Alert is provided for informational purposes and does not constitute legal advice. The information contained herein is current as of the date of publication and may be affected by subsequent legal or regulatory developments.