Business groups seek Coastal Zone Act revisions

Bruce Patrick, general manager of Tidewater Utilities, stands in a soybean field his company is still leasing. The company had planned a wastewater treatment plant there, but the Coastal Zone Act permitting process took so long that Tidewater's prospective customers built their developments without them.
Bruce Patrick, general manager of Tidewater Utilities, stands in a field his company is still leasing. The company had planned a wastewater treatment plant there, but the Coastal Zone Act permitting process took so long that Tidewater’s prospective customers built their developments without them. // Photo by Brian Harvath

By Kathy Canavan

Tom Drye runs manufacturing plants in seven states, but Delaware’s Coastal Zone Act still knocked him for a loop.

“The Coastal Zone Act permitting process sort of came out of nowhere and hit us,” said Drye, who wanted to move 50 research, technical and light manufacturing jobs to Delaware.

First, he found the information on the state website confusing. Then he had to pay $10,000 for an environmental firm to prepare all the paperwork. Then, it took so long to get the permits that he had to extend the lease on his old Pennsylvania factory and push back the opening of his New Castle operation.

Businesses want change and seemingly unlikely allies like the director of the state Department of Natural Resources & Environmental Control and the president of the National Wildlife Federation say they are open to changes that still protect the environment.

“I think a conversation about the non-conforming uses that were once heavy industry and how they possibly could be repurposed into new heavy industry is a worthy conversation,” DNREC Director David Small said. “Initially I’d take a look at the non-conforming uses — those 13 to 14 grandfathered sites. I think you could throw other abandoned ones in there too. That’s a conversation worth having.”

“There are things we can do to reduce the uncertainty of the regulatory process,” said Collin O’Mara, president of the wildlife federation and a former DNREC director. “I mean to still be very thorough, but have a more timely appeals process. The review process is pretty long.”

Some appeals stretch for years. The poster child for stalled projects: A man who said he was acting on behalf of the nesting birds and other flora and fauna, which were unable to speak, filed an appeal that went to the Delaware Supreme Court in 2013.

Jerry Esposito, president of Tidewater Utilities, said he waited so long for a permit to build a wastewater treatment plant in Angola that his potential customers found other hookups. He said the state can’t limit a citizen’s right file court appeals, but it could limit the time the Coastal Zone Industrial Control Board has to rule on appeals before they go to the courts. He said the board typically takes three to nine months to rule. “I’m not sure the Coastal Zone Industrial Control Board provides the value it was intended to,” he said.

Business groups — from the Delaware Chamber of Commerce to the Committee of 100 — hope to update the landmark Coastal Zone Act signed into law by Gov. Russell Peterson 45 years ago this month.

“We recognize any changes would have to be limited and focused,” Paul H. Morrill Jr., president of the Committee of 100, said. “The act serves a good purpose and always has, but we would argue that Gov. Petersen never intended to create an industrial wasteland, and that’s what happened.”

“The Coastal Zone is kind of a weird animal because, while you’re allowed to manufacture automobiles there some other things are not permitted and some things are allowed but require a permit,” said Jeff Bross of Duffield Associates.

“Folks who might be interested in investing get turned off when they find they have to go through this coastal zone process,” said James DeChene, lobbyist for the Delaware State Chamber of Commerce. “Site selectors go to a meeting or two and they find out what the process is going to be like for them both in cost and in time, and you just don’t hear from them again.”

Jim May, co-director of the Environmental Law Center at Widener University, said businesspeople say regulations drive job creators away, but they never give names. “It would be interesting to hear if there are named businesses with real people who chose to elsewhere,” he said. “Industry comes here because it’s a tax haven and because corporate laws are advantageous for business. To single out the Coastal Zone Act is a canard.”

Attorneys and real estate agents said they can’t drop names because they sign confidentiality agreements. “If it weren’t real, we wouldn’t be turning ourselves upside down to get regulations changed,” said attorney David Swayze, a lobbyist who was chief of staff to Gov. Pierre S. du Pont IV in the 1970s.

David Carter, conservation chair for the Delaware Audubon Society, said he believes the business community doesn’t have a good vision for the economy and they’re using the Coastal Zone Act as a scapegoat.

“I knew Russ Petersen well,” Carter said. “He told me to be vigilant because as soon as he’s gone the business community is going to go after the Coastal Zone Act.”

Heather Dunigan, principal planner for WILMAPCO, stands on the edge of the old Claymont Steel site.
Heather Dunigan, principal planner for WILMAPCO, stands on the edge of the old Claymont Steel site.

AFL-CIO President Jim Maravelias says the Peterson and others who supported the act then would see the need for change now: “I’m sure those people would roll over in their graves if they knew Dupont pulled out or what happened at Astra Zeneca or Hercules or Chrysler or GM. I don’t believe they would have thought anything like that would have ever happened in Delaware – that that tax base and those jobs would be gone.”


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Carter said he wishes the business groups would share their plans. “What would be helpful to me is if someone could give a clear list of what they want to do that would be excluded.”

Carter probably would have had it months ago — if it weren’t an election year.

The chamber leaders thought this legislative session was a perfect time to introduce the bill: As DeChene put it, “Personal income tax revenues are really down because the jobs that we used to have — the GMs and Chryslers and Claymont Steels — are gone. This would bring good-paying jobs to areas that have none.”

The chamber wanted to change only the portion of the act that pertains to former industrial sites north of the C&D Canal, but DeChene said they were advised not to try it in an election year.

“We were told in no uncertain terms don’t even bother this year. To dismiss it out of hand because it’s an election year was not what we had hoped for,”

DeChene said. “ These issues don’t go away because you don’t want to deal with them.”

People involved with the process said Rep. Debra Heffernan, a 6th District Democrat, might submit a bill in the waning days of the legislative session, but Heffernan said she has no plans to do that.

A researcher familiar with coastal management laws across the country recommended keeping the act intact but tweaking the regulations. Charlie Cogan, director of research at the Center for the Blue Economy in Monterey, Calif., said it’s important to distinguish between regulatory standards and the regulatory process.

“A lot of businesses don’t have problems meeting standards as long as the standards are clear,” Colgan said. “What they don’t like is uncertainty and a drawn-out process where everybody can appeal any part of it simply to further their own agendas. It’s reasonable on the part of businesses to want the regulatory process to provide a decision about what can and can not be done.”

Since the 1972 Coastal Zone Management Act of 1972 was enacted, all states, including neighboring New Jersey and Pennsylvania, have state regulations on top of federal ones, Colgan said. He said Delaware’s standards are not as strict as California’s, Massachusetts’ or Connecticut’s.

“If you talk to business people, every state is convinced that their program is the worst, but, of all the other coastal management programs I’m familiar with, Delaware’s has rarely been mentioned as on of the strictest, if you’re talking to people familiar with the rules,” Colgan said. “I do believe it’s up to policymakers to design a process where everybody can see what can and can’t be done. That’s a reasonable expectation.”

Morrill of the Committee of 100 said a big step forward would be clearer regulations. “It’s a big turnoff for any prospective employer to be faced with hundreds of thousands of dollars of expense and no certainty of outcome,” he said.

Stephanie Herron, spokeswoman for the Delaware Sierra Club, said the members obviously want to see the act retained, but they’d like to have a clearer process. “There are certain things that are specifically prohibited in the act, but there are gray areas, “ she said. “Every time the secretary makes a determination, he explains that determination, but there are no really clear, objective standards. That would just make the whole process a lot clearer.”

DNREC officials said they routinely meet with applicants. They have had no complaints about the explanations on their website but they’d be willing to make them clearer if any applicants brought the issue to their attention and they would be willing to talk about regulatory streamlining, but the current process was designed by a consortium of representatives from business and environmental groups. Small said he’s confident emissions and discharge and storage of hazardous waste could be monitored with current tools.

“I think any change in the act needs to be done in a very deliberate way,” Cherry said. “This act is Delaware’s hallmark environmental legislation. Whether it’s a change in the act or a change in the regulations, we ought to be doing it in a very collaborative, transparent and deliberative way.”

DeChene promoted the chamber’s push as a win-win that would bring jobs and new owners who would remediate sites where polluters have gone bankrupt. Visitors to one used words like “Hiroshima” and “Beirut” to describe it. “Nobody’s going to want to do it out of the goodness of their own heart,” DeChene said.

Brett Saddler, executive director of the Claymont Renaissance Development Corp., said Claymont has an industrial heritage so people don’t mind industry that provides solid blue-collar jobs for former steel workers who are now scrambling to start their own fix-it businesses or pouring paint at a big-box store. “People in Claymont want industry,” he said. “What people don’t want is they don’t want a big, spewing heavy industrial use there.”

Collin O’ Mara, the former DNREC secretary who now heads the National Wildlife Federation, summed it up: “We have a series of abandoned facilities that we need to clean up. The problems that stem from these facilities are pretty significant. A lot of them are owned by entities that are bankrupt. The jobs are long gone, but the pollution remains, and it’s leached into the soil. If there’s a way to clean up these sites’ soil and improve the water quality through the Brownfields Program, it is a win-win. Any type of new facility would have to meet the standards of the Clean Water Act, the Clean Air Act and other state and federal statutes. Having a cleaner site with some jobs on it is preferable to having an abandoned site with some pollution on it.”

Drye, who opened his Techmer Engineered Solutions in March, said Delaware’s permitting process was more difficult than even California’s, but the state officials were extremely helpful, especially DNREC’s Secretary Small and Division of Energy and Climate Director Phil Cherry, who arranged for him to meet with about 20 representatives in one session to save time, Barbara DeHaven of the Delaware Department of Economic Development, who acted as his personal consultant through every step in the process.

“I have all good things to say on their support once we figured out what level of permitting was needed,” Drye said, adding that he hopes to bring another 25 jobs to the state.

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