Hartford Business Journal

8 HARTFORDBUSINESS.COM | NOVEMBER 21, 2022 Deal Watch Hartford developer Carlos Mouta said more than $250,000 has been spent trying to clear this Arbor Street property through an ongoing Transfer Act review that began with his 2006 purchase of the building. PHOTO | GOOGLE MAPS Measure Twice, Cut Once Two years in, effort to replace burdensome Transfer Act not expected to be completed until 2024 By Michael Puffer mpuffer@hartfordbusiness.com T here was a big round of applause as Department of Economic and Community Development Commissioner David Lehman assured a Nov. 9 gathering of brokers that progress is being made in a two-year-old effort to design a replacement for the much-criticized Transfer Act. "I think the business and brokerage community is really happy this process is in motion," said Samuel Haydock, a principal with Meriden-based engineering and environmental consulting firm BL Companies and an attendee at the event. "I think everybody is frustrated it's taking as long as it's taking. But that's reality." State officials assure a Hercu- lean effort is underway to design a replacement for the 37-year-old system governing environmental cleanups, which many brokers and developers say significantly stifles property transactions and redevelopment opportunities. Learning from past setbacks, Department of Energy and Environ- mental Protection (DEEP) staff are working closely with a group of nearly 60 commercial brokers, licensed environmental professionals, industry attorneys, environmental activists and other stakeholders. Graham Stevens, chief of DEEP's Bureau of Water Protection and Land Reuse, said staff and volunteers on the Transfer Act Working Group have logged thousands of hours researching and designing a new "release-based" system governing environmental cleanup. Stevens cautions much work remains but he is hoping to debut the new regulations in mid-to-late 2023, and see them in force by the close of 2024. "I think this is a pretty complicated system we are building," Stevens said. "The last system has served us since the 1980s and we want the new system to serve us for even a greater length of time." The system Connecticut is one of only two states that uses property transfers as a trigger for environmental assess- ment and cleanup. Under the Transfer Act, property that produced or stored more than 100 kilograms (220 pounds) of hazardous waste in any given month is subject to a lengthy and costly state review to prove the property was not a hazard. In October 2020, as Gov. Ned Lamont signed the law requiring the Transfer Act's eventual sunset, it was estimated Connecticut had about 4,200 properties subject to the law, and that around 1,000 had been cleared through the program's 35-year history. Real estate brokers and investors have long complained the system is too easy to slip into, and far too hard to exit. Detractors said this has left many property owners reluctant to sell, and prompted many investors to shy away from Connecticut. The Connecticut Economic Resource Center (CERC) — the precursor organization to the state's current nonprofit economic develop- ment arm AdvanceCT — published a study in 2019 that concluded the Transfer Act's impacts were wide- spread, with over 470 filings under the law between 2014 and 2018. CERC's report concluded that dozens of property sales were either delayed or halted over that five-year period as a result of the Transfer Act, costing Connecticut at least 7,000 direct jobs and $178 million in tax revenues. Carlos Mouta, a prolific developer in Hartford's Parkville neighborhood, gets upset when he talks about his experience with the Transfer Act. He bought a shuttered pay-phone factory on Hartford's Arbor Street in 2006 and then renovated the 120,000-square- foot building into loft apartments. Only a 3,000-square- foot section of the building had a history of contamination, which has since been cleaned, Mouta said. The seller signed off as the respon- sible party for cleanup to Transfer Act standards and has spent more than $250,000 on attorneys and environmental specialists, Mouta said. But the Arbor Street property has still not cleared state review, which means Mouta can't sell it, even though it's not something he is currently contemplating. "It's like your cancer never goes away, you still have cancer there," Mouta said. "They made it for attor- neys and environmental people to make money. They must have had a good lobbyist." Some skepticism Tom Hill III, a Waterbury-based commercial and industrial broker, said he appreciates the monumental reform effort underway, but has heard some skepticism among the regu- lated community. He is personally concerned the new system could be similarly costly and difficult. "I'm thinking that it's not going to be hunky dory, that it's going to be very complicated and expensive, just like it has been," Hill said. "I'm not meaning any disrespect to DEEP, I'm just worried about my clients, many of whom were in small business and have gotten caught for a small fortune in trying to satisfy the over- testing and complications because the average cost of a Transfer Carlos Mouta Graham Stevens Tom Hill

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