After Kent leaders in October decided not to rezone almost 12 acres near the center of the city, the proposed buyer backed out, but the land is still in play.
Grey Fox Capital had proposed to build a residential rental community on the property and had asked the city to rezone the acreage from Industrial to R-3 high density residential....
Read moreSo will Hometown Bank pay back the taxpayers when they sell their cleaned up and much more valuable land? Didnât think so.
I would be interested in better understanding your argument. Can you elaborate as to the principles on which you are basing it? Should those principles also apply to programs supporting low income residents?
@Jeff_Schrecengost Iâm also interested in @J_Randall_Nyeâs questions.
Iâm just saying that Hometown Bank presumably knew the condition of the property when they assumed ownership. Now that the taxpayers are cleaning it up for them and the value and salability of the property will be increased I thought they might do the right thing and reimburse the taxpayers.
What this has to do with programs supporting low income residents I have no idea what youâre talking about. This is a Corporation and I thought Corporations were bad according to liberals.
@Jeff_Schrecengost Iâm not one to defend corporations out of hand, but Hometown Bank didnât contaminate the soil. If they had been aware of the state of the contamination and the responsibilities associated with that, they probably wouldnât have bought the parcel, and likely the cleanup would still fall to the tax payers. I donât know the history of the parcel but I wouldnât be surprised if Hometown Bank held the loans on the land and repossessed the land when the companies that did the polluting moved or went bankrupt.
It would be nice if we held polluters accountable and made them pay for the damage they do to our land, water, and air. But our current legal frameworks make it far too easy for companies to get out of those obligations. Seeing as we have no realistic way to do that right now, I would say this is more a matter of making the land useable again so it can be developed and pay the tax base back with future tax revenue, rather than worrying if hometown bank might make some money off of the sale of this land.
It is my understanding that Hometown Bank gained ownership through foreclosure. If so, does that still make them âguilty?â
Hometown Bank is a community bank with local shareholders. It lends to local consumers and small businesses as well as providing fundamental banking services. What sort of âliberalâ holds the position that a community bank is âbad?â I participate in discussions concerning the Public Banking Movement. That is âhigh endâ liberal (but it should be favored by everyone that is opposed to Crony Capitalism). And they really love the idea of community banks partnering with a Public Bank.
You expressed a concern about âtaxpayers.â So, if the taxpayers are important to you I was wondering if your concerns were consistent across the spectrum.
There are those in the community that have never paid taxes that cover the welfare system transfers they receive from the taxpayers at large. And it is likely they never will. Aside from some unique circumstances relating to Medicaid recovery that I am aware of (there may be others), nobody ever talks about clawing back government transfers to these folks.
The grants associated with Brownfield cleanup exist for the benefit of communities. If the risk-takers have to pay the taxpayers back, why not across the board when their fortunes change?
To communicate this better than I could, I asked Chat GPT for a couple of sentences that convey that liability for environmental issues is extensive for owners who may not have been the polluters:
âUnder CERCLA (Superfund), âcurrent owners and operatorsâ can be potentially responsible parties for cleanup costs, even for contamination that happened under prior ownership (strict liability framework). EPA summarizes these landowner liability pathways and defenses.â
@J_Randall_Nye yes, the laws can hold current owners responsible for the cleanup of contamination. Iâm sure there are some reasons for the language and cases where it would make sense. Say speedway buys an old BP gas station, when Speedway is done with the site youâre not going to parse what contamination Speedway is responsible for and only expect them to clean up 50% of the contaminated soil.
What I was referring to regarding how easy it is for companies to avoid responsibility for polluting was the recent attacks on the EPAâs ability to regulate polluters, and creative business practices, like the Texas two step bankruptcy. This practice allows a company to split into multiple entities, allocating toxic assets, lawsuit liabilities, etc to the subsidiary, then bankrupting the subsidiary which triggers bankruptcy protections that make it difficult for individuals or the government to sue the company for damages.
Welp, while not a litigator I am a lawyer and have participated in splitting some very fine hairs in litigation support. So, letâs see if we can reach a standard that leaves anyone following this back and forth better informed.
Based on my experience with retirement plans exploring investments in real estate, your Speedway example comically understates legal liability of subsequent owners that had no involvement with polluting the property. Not 50% contribution. 0% contribution. Its called strict liability. Speedway, in your example, was a polluter and so my understanding is that it will be jointly and severally liable with any other owner (but likely solely liable for all practical purposes). Speedway did not fall into any âtrap for the unwary.â
My recollection is that the investigation a completely innocent buyer normally would undertake when acquiring a property is deficient and will result in strict liability and the buyer will be jointly and severally liable for others also on the hook. Responsible even though zero culpability. There are paths to take. Basically, an enhanced due diligence process that is likely to kill the deal if a hint of contamination is found absent very unique circumstances. Itâs been too long and I was an ERISA lawyer at that time and not an environmental lawyer. An amendment to the original environmental law that creates strict liability in the mid â80s were the source of âstrugglesâ with investors like retirement plans during my time at âbig lawâ in the late â80s.
Regarding attacks on the EPA, I am not sure to what you are referring. But I would point out that the legal system is purpose built as an adversarial system in order to allow the âtrier of factâ to reach conclusions about the truth. And the EPA may take hits, but it also dishes them out. But what I assume your are referring to is coming from the political advocacy of activists and that type of give-and-take does not follow the same rules. In this situation, one needs to seek out the âbest opposing argumentsâ in order to avoid being propagandized. So, one opposing argument is illustrated by the case where a regional environmental head of the EPA was caught on film boasting about his strategy of targeting companies for crucifixion. An interesting use of terms. Someone arguing for strict enforcement in order to deter violations does not need to use this term. But it would be used by someone with a personal agenda to have an impact far beyond what the law requires. Whether Al Amenderiz, the Federal EPA regional administrator at issue, was pursuing such an agenda is hard to say. But keep in mind that enforcement does not evaporate under administrations that are more business friendly. So Olâ Al really had some âsplaininâ to do.
My prior response failed include my comments on an important issue; that is, there is nothing âeasyâ about the âTexas Two-Stepâ and the strategy does not warrant the conclusion that dodging environmental liability is, therefore, easy.
My distant familiarity with the concept was that it was connected to huge cases with $ Billions at stake and the army of lawyers that demands. A brief inquiry with AI confirmed this (if it wasnât hallucinating). Apparently, according to AI, it has been attempted roughly 15-20 times. The majority of cases involved liabilities incurred by a subsidiary where the litigation was attempting to exceed the boundaries of the subsidiaryâs limited liability. The sense I got was that when the strategy succeeded it was something of a âbelt and suspendersâ approach to nail down that the subâs liabilities would not jump to the parent organization. So, not really a loophole. Also, there were few cases of these 15-20 that involved pollution liabilities.
If this summary is inaccurate, I would welcome the correction.
@J_Randall_Nye I appreciate your perspectives, experience, and expertise. I am neither a lawyer nor litigator so Iâm happy to learn more about the situation from your vantage point.
I think you are correct, I got most of my information about âTexas Two stepâ from wikipedia which agrees with what AI reported to you that it hasnât been used in that many cases. My referencing the Texas two step was more to epitomize the great lengths to which some of these companies will go to avoid paying for the pollution they have caused.
The âattacksâ to the EPA Iâm referring to are administrative. In the interest of not sensationalizing, most of the things Trump EPA made headlines for last year were proposals, not actual changes to rules. To say that the proposals signal a âbusiness friendlyâ EPA are an understatement. As we turn into the new year we will start to see more of those proposals become rule changes. This past Monday the EPA published changes rules for gas turbines that will cut the reduction of nitrogen oxides (NOx) expected under the prior set of rules.
To bring this all back to the Hometown bank situation, I think we agree that Hometown bank isnât the bad guy in this situation. I think because of the way that our corporate and legal system is set up, it is highly likely that âthe taxpayerâ would be the one paying to clean up the land whether Hometown Bank was the owner, or otherwise. The faster we can get that land rehabilitated and contributing to the community the better.