The Gowanus Canal, located in northwest Brooklyn, New York is connected to the Gowanus Bay in Upper New York Bay. The canal borders the neighborhoods of Red Hook and South Brooklyn to the west and Carroll Gardens to the east.

Kenneth Acks directed the research which reviewed the literature on the effects of potential Superfund designation upon property values, and determined that the evidence indicates that Superfund designation will generally increase risk associated with a site and surrounding properties -- and thus diminish property values. The designation will reduce values beyond diminution levels expected from the contamination absent placement on the list. The report also noted that the current economic crisis increases the likely diminution from Superfund designation. In a buyers’ market developers and homebuyers will be able to easily find properties at affordable prices that do not face the risks posed by Superfund designation. In addition, risks tend to be multiplicative, and the combination of greater financial risk, market risk, economic risk, environmental risk and regulatory risk is likely to prove devastating.

The Gowanus neighborhood was originally a tidal inlet of navigable creeks in original saltwater marshland and meadows. The first gristmill patented in New York was built in Gowanus after1635. On May 29, 1664, several residents were granted permission to dredge a canal at their own expense in order to supply water to run the mill.

In 1849, the New York Legislature authorized the construction of the Gowanus Canal by deepening Gowanus Creek, to transform it into a mile and a half long commercial waterway connected to Upper New York Bay. After exploring numerous alternative (and some more environmentally sound) designs, the final was chosen for its low price tag. The canal was essentially complete by 1869.

Despite its relatively short length, the Gowanus Canal was a hub for Brooklyn's maritime and commercial shipping activity. Factories, warehouses, tanneries, coal stores, and manufactured gas refineries sprang up as a result of its construction. Much of the brownstone quarried in New Jersey and the upper Hudson was placed on barges with lumber and brick and shipped through the canal to build the neighborhoods of Carroll Gardens, Cobble Hill, and Park Slope. In addition, the industrial sector around the canal grew substantially over time to include: stone and coal yards, flour mills, cement works, and manufactured gas plants, tanneries, factories for paint, ink, and soap, machine shops, chemical plants, and sulfur producers, all of which emitted pollutants.

Thriving industry brought many new people to the area but important questions about wastewater sanitation had not been properly addressed to handle such growth. All the sewage from the new buildings drained downhill, into the Gowanus. The building of new sewer connections only compounded the problem by discharging raw sewage from neighborhoods even farther away into the Canal. By the turn of the century, the combination of industrial pollutants and runoff from storm water, fortified with the products of the new sewage system, rendered the waterway a repository of rank odors, euphemistically called by wise-cracking locals "Lavender Lake". After World War I, with six million annual tons of cargo produced and trafficked though the waterway, the Gowanus Canal became the nation's busiest commercial canal.

The US Army Corps of Engineers completed their last dredging of the canal in 1955 and soon afterward abandoned their regular dredging schedule, deeming it to be no longer cost effective.

In 2002, the U.S. Army Corps of Engineers entered into a cost-sharing agreement with the DEP to collaborate on a $5 million Ecosystem Restoration Feasibility Study of the Gowanus Canal area to be completed in 2005, studying possible alternatives for ecosystem restoration such as dredging, and wetland and habitat restoration. The DEP also initiated the Gowanus Canal Use and Standards Attainment project, to meet the City's obligations under the Clean Water Act.

Toll Brothers has vowed to abandon plans to build 460 condos and townhouses along the waterway if it becomes a Superfund site, saying the stigma attached to the program will make it impossible to finance the project or sell the homes.

Shortly after the report was issue Mayor Michael Bloomberg came out against Superfund Designation (We have no evidence, however, of a causal connection, or even that Mayor Bloomberg saw the report).

According to an April 20, 2009 press release (http://www.tollbrothers.com/homesearch/servlet/HomeSearch?app=IRhome) Toll Brothers, Inc. is the nation's leading builder of luxury homes. The Company began business in 1967 and became a public company in 1986. Its common stock is listed on the New York Stock Exchange under the symbol "TOL". The Company serves move-up, empty-nester, active-adult and second-home home buyers and operates in 21 states: Arizona, California, Colorado, Connecticut, Delaware, Florida, Georgia, Illinois, Maryland, Massachusetts, Michigan, Minnesota, Nevada, New Jersey, New York, North Carolina, Pennsylvania, South Carolina, Texas, Virginia and West Virginia. It was ranked #1 in five of the nine rating categories among Home Builders in Fortune magazine's recently released list of World's Most Admired Companies 2009.

According to its website Sive, Paget & Riesel (http://www.sprlaw.com/thefirm/index.html) has been a leader in Environmental Law and Litigation since the early 1960's. More than four decades ago, Sive, Paget & Riesel lawyers led the administrative and judicial proceedings that followed after the initial landmark Storm King Mountain litigation in New York's Hudson River region. Their attorneys also led the successful fight to stop the Hudson River Expressway, which resulted in an opinion that is the first reported decision contained in the Environmental Law Institute’s Environmental Law Reporter http://www.eli.org. The Storm King Mountain disputes preceded the first Earth Day in 1970, the enactment of the National Environmental Policy Act and the creation of the United States Environmental Protection Agency. Sive, Paget & Riesel continues to be a leader in this field, having been selected by two independent ranking agencies – Chambers and Partners USA and Who’s Who Legal – as the leading firm for environmental law and litigation in New York http://www.chambersandpartners.com/us/, http://www.whoswholegal.com.

According to their website Environmental Liability Management of New York, LLC (ELM - http://www.elmofny.com) is an environmental, engineering and risk management firm. ELM's professional staff has demonstrated expertise in assisting you in the management of multimedia environmental concerns. They combine in-depth regulatory knowledge along with project management expertise and technical insight to control costs while meeting in-house objectives, and obtaining any necessary agency approvals. ELM's services range from simple consultations to the management of day-to-day operations for multimillion dollar environmental compliance and remediation programs.

For emotional distress most adult plaintiffs in the suit received $500,000 in non-economic damages, plus $50,000 in non-economic damages for their children for emotional distress resulting in a total award of about $71 million. ExxonMobil was also held responsible for lifetime medical monitoring, which is expected to cost nearly$14.5 million.

Each family also received the full appraised value of their home resulting in total property damages of more than $61 million. The Maryland Daily Record reported “The fact that plaintiffs were, for the most part, compensated for the full value of their homes, some of them worth as much as $1.3 million, was surprising and cathartic to many homeowners.”

On December 30th and 31st 2008 Ken Acks CEO of the Cost-Benefit Group testified before the jury regarding the diminution in property values resulting from the underground gasoline storage tank leak. Jacksonville is an affluent community about 20 miles north of the City of Baltimore. The tank spilled about 26,000 gallons of gas over 37 days until it was discovered on February 16, 2006. Jury selection began October 1st 2008, and the trial started on October 14th. Several environmental and health experts, and most plaintiffs testified before Mr. Acks.

Mr. Acks directed the valuation estimates for 91 properties. As part of the process Richard Kern, SRA, a local appraiser, estimated property value as uncontaminated at the time of the spill, The average property value was determined to be about $690,000. Mr. Acks then used a variety of techniques to estimate expected diminution levels, based upon contamination probabilities provided by Whitman Associates and other environmental consultants, an extensive search of academic literature, surveys, interviews, investigations of real estate activity in the area, and other research..

Mr. Acks had been deposed over four days by attorneys for the defendant, ExxonMobil, in the year prior to the spill. Robert Weltchek a name partner at Snyder, Weltchek & Snyder, the attorneys for the plaintiffs, directed questions to Mr. Acks on December 30th. He then faced cross examination from attorneys for the defendant, and a redirect by Mr. Weltchek.

Mr. Acks has been assessing the economic impacts of environmental factors, conducting financial analyses, valuing real property, providing litigation support, and producing cost-benefit analyses for more than 30 years. He has estimated property damages from nuclear power plants, oil spills, dry cleaners and numerous toxic chemicals. In conjunction with the NASA-Goddard, Columbia University he produced a cost-benefit analysis of green roofs in New York City and presented a Cost-Benefit Analysis of a Green Brownfield Redevelopment Project at the Society for Benefit-Cost Analysis in June 2008.

The conference was entitled “Valuing Environmentally Toxic Assets”. The program of the conference follows:

I. Welcome – Howard Apsan/Jerry Atlas (9 AM – 9:15 AM)
II. Introduction – Jeffrey Teitel, EHS Consultant (9:15 – 9:30 AM)
A. "Toxic Assets" – Financial community borrows a term from the EHS world
B. Greater role for the EHS Auditor – Discovering and Valuing Impaired Assets
III. How and Why The Financial Crisis Has Changed the Role of the EHS Auditor: The Legal Perspective - Holly Cannon, Principal, Beveridge & Diamond PC (9:30 – 10:30 AM)
Coffee Break (10:30 – 10:45 AM)
IV. Discovering and Valuing Environmental Liabilities - Muriel Robinette , CEO, New England EnviroStrategies Inc. (10:45 – 11:45 AM)
Lunch (11:45 AM - 1:00 PM)
V. Economic Impact of Environmental Liabilities on Real Estate Values – Kenneth Acks, CEO, Cost-Benefit Group, LLC (1:00 – 2:00 PM)
Auditing Roundtable Announcement – Jerry Atlas, Consolidated Edison
VI. Environmental Considerations Impact Banking Industry – Eric Rothenberg, Partner, O'Melveny & Meyers LLP (2:15 – 3:15 PM)
Q & A (3:15 – 4:00 PM)
ADJOURNMENT

The presentation was prepared using OpenOffice's www.openoffice.org "Presentation" Software and converted into a "PowerPoint"

The Auditing Roundtable is a Professional Organization for Environmental Health and Safety (EHS) Auditors. For more information on the Auditing Roundtable go to:
http://www.auditing-roundtable.org
For more information on The Cost-Benefit Group, LLC go to:
http://www.costbenefitgroup.com

According to AWSTATS, in 2008 Environmental Valuation & Cost-Benefit News, located at http://www.envirovaluation.org edited and published by Kenneth Acks, CEO of the Cost-Benefit Group, welcomed an average of 20,742 unique visitors per month. During the year these visitors paid a total of 660,956 visits and viewed 3,064,462 pages; and 115,039 spent at least 5 minutes on the site. The Hit Count was 5,305,351.

The site has achieved top, top five or top fifteen Google Search status for such keywords as cost-benefit, environmental economics, cost-benefit analysis, and cost-benefit green buildings/brownfields/green roofs/environment/environmental, ...

Among those linking to the site and its affiliated web portal www.costbenefitanalysis.org have been

The U.S. Environmental Protection Agency (EPA) National Center for Environmental Economics http://yosemite.epa.gov/ee/epa/eed.nsf/webpages/Publications.html and http://yosemite.epa.gov/ee/epalib/eelinks.nsf/e3539284c59a3f548525675a006180b6/59a36469b7f7ac39852568f3006f2acb!OpenDocument;

The United National Development Program - Economics Toolkit http://www.undp.org/gef/05/documents/ld/Economics_toolkit_2edition.pdf;

The U.S. EPA’s Guidebook of Financial Tools http://www.epa.gov/efinpage/publications/GFT2008.pdf; Sustainable Development Online via EnviroWindows - the European Environment Agency Platform for Knowledge Sharing and Development, http://sd-online.ewindows.eu.org/Tools/URL_94/index_html?prettyprint=1;

The Association of Environmental and Resource Economists http://www.aere.org/resources/research.html; Resources For the Future http://rfflibrary.wordpress.com/;

The National Association of Business Economists http://www.nabe.com/publib/links/maclink.htm; the Australian Association of Resource and Environmental Economics http://www.aares.info/links;

The Society for Risk Analysis http://sra.org/resources_nonprofit.php;

The Kyoto University Graduate School of Economics http://www.econ.kyoto-u.ac.jp/~ueta/link.html;

--The Indian Institute of Sciences;
--Wikipedia-Cost-benefit analysis;
--The American Economics Association’s Resources for Economists on the Internet;
--New Jersey Future;
--Environmental Economics Blog - Whitehead and Haab;
--Inomics;
--The Environmental Health & Safety (EH&S) Management Systems / ISO 14000 Center;
--Wikipedia-Contingent valuation;
--A Contract with the Earth;
-University of Cal. at Santa Barbara Economic & Environmental Sciences Electronic Resources

For more hyperlinks go to http://www.cost-benefit.com/LinksLinkers.htm

Mr. Acks directed the valuation estimates for 91 properties. As part of the process Richard Kern, SRA, a local appraiser, estimated property value as uncontaminated at the time of the spill, The average property value was determined to be about$690,000. Mr. Acks then used a variety of techniques to estimate expected diminution levels, based upon contamination probabilities provided by Whitman Associates and other environmental consultants, an extensive search of academic literature, surveys, interviews, investigations of real estate activity in the area and other research.

Mr. Acks had been deposed over four days by attorneys for the defendant, ExxonMobil, in the year prior to the spill. Robert Weltchek a name partner at Snyder, Weltchek & Snyder, the attorneys for the plaintiffs, directed questions to Mr. Acks on December 30th. He then faced cross examination from attorneys for the defendant, and a redirect by Mr. Weltchek.

Seperately, we valued a 12,000 square foot building and excess land on a 3.286 acre site occupied by an environmental services firm in Deer Park, NY

On June 25, 2008 Kenneth Acks, CEO of the Cost-Benefit Group, LLC chaired a Session at the Annual Meeting of the Society for Benefit-Cost Analysis entitled: States, Localities, and Benefit-Cost Analysis. He also presented a paper entitled “The Costs and Benefits of a Green Mixed-Use Brownfield Redevelopment Project in New York”.

Kenneth Acks, CEO of the Cost-Benefit Group, LLC testified before a New York State Supreme Court in Dutchess County on June 5, 2008 regarding property value diminution arising from MTBE contamination.

State Supreme Judge Christine Sproat ordered the owners of a Gulf station in Fishkill to pay a Hopewell Junction family about $150,000 in damages for a gasoline spill that contaminated the family's water supply with a suspected cancer-causing chemical, a gasoline additive called methyl tertiary butyl ether, or MTBE.

Judge Sproat ruled the MTBE contamination diminished the value of the 6.5 acre property] by one-fourth of its assessed value - or about $140,000. The judge also ordered the Gulf station owner to reimburse the family for all of the bottled water purchased since 2001 - about $11,000. The Gulf station owner was also ordered to pay the Conklin-Stewart family's attorneys' fees.

Attorneys for the plaintiff questioned Mr. Acks, who included a powerpoint presentation describing the situation at the subject property, valuation techniques, and estimated diminution. He then faced cross examination from attorneys for the defendant, and a redirect.

The subject property consisted of a 6.59 acre site with 340.5 feet of frontage on Route 52 zoned R-1. The site is improved with a two-story two-family wood-frame home constructed circa 1790 containing 3,872 square feet; two one-bedroom, one bath wood cottages - one constructed 1930 containing 568 square feet the other constructed in 1830 containing 454 square feet with a 102 square foot finished attic; two small wood storage buildings containing 144 and 247 square feet constructed circa 1930; and a 576 square foot swimming pool installed circa 1930.

On or about June 19, 2000 a gasoline spill (NYS DEC Spill # 0004155) occurred at a nearby Gulf gasoline station located at Route 52 and Lake Drive approximately 200 yards west of the subject. According to that report 150 tons of contaminated soil was removed from the gas station site.

According to an October 2001 fact sheet from the New York State Department of Environmental Conservation (NYS DEC) the agency was working with the owner of the Gulf Service Station to address contamination since November 1999. As of September 2001, 124 water samples were collected from 32 private wells. The primary contaminant of concern was Methyl Tertiary Butyl Ether, or MTBE, a gasoline additive. Through October 2001 the migration of MTBE in groundwater was generally to the north of the station. Sample results showed eight wells with MTBE levels above 10 parts per billion (ppb) and 6 wells with MTBE less that 10 ppb. Beginning in October 2000, whole-house activated charcoal filter systems were installed in 8 homes and businesses with levels of MTBE at 10 ppb or higher and a tanker truck provided drinking water for businesses in the Archway Plaza on Route 52. On May 22, 2007 Conklin Services & Construction Inc. obtained water samples from the subject (19 Locust Lane)_which detected MTBE in the samples collected at the influent and middle of the treatment system at 18 and 24 μg/l. MTBE was not detected in the effluent. Prior samples reportedly registered MTBE readings of 77 parts per million with spiking occurring periodically. Conklin Services & Construction planned to change the carbon in the treatment system. This has not occurred and strong gasoline smells have been observed.

The defendant hired a local appraiser. The decision regarding diminution was within 5% of Mr. Acks' estimate, 20% higher than that of the defendant's expert.