25014_Erwin Terrace Apts_Corr_20211123

�% CAPITAL
November 23, 2021
Via Federal Express and E-Mail
(bruce.nicholsongncdenr.gov and sharon.eckardgncdenr.gov)
Bruce Nicholson
Sharon Eckard
North Carolina Brownfields Program
Division of Waste Management
North Carolina Department of Environmental Quality
217 W. Jones Street
Raleigh, North Carolina 27603
Re: Response to Determination of No Eligibility and Withdrawal of Brownfields
Application for Erwin Terrace Apartments, 806 Lambeth Circle & Erwin Road,
NCBP #25014-21-032
Dear Bruce and Sharon:
As you know, SLI Capital has been a strong advocate of the North Carolina Brownfields Program and
has worked with your Program to successfully redevelop numerous hindered properties over the years.
Like those, SLI was excited to partner with DEQ on the Erwin Terrace Apartments, a planned multi-
family residential complex serving the Durham and Duke University (particularly Duke Hospital)
communities. We were disappointed to receive your September 24, 2021 letter determining that the
project is not eligible to receive a brownfields agreement. The letter states that your Program does not
believe the property is sufficiently hindered by the contamination caused by the historical underground
storage tank release on site.
We appreciate the explanation provided in the letter. However, we are especially disappointed in the
approach DEQ used in reaching its decision, and in DEQ's determination that the property was not
hindered within the meaning of the Brownfields Property Reuse Act. During a lengthy review process,
we provided additional information to demonstrate hindrance based on actual and possible
contamination through our several conversations and communications on the topic, our provision of
additional information confirming our investor's position on the risk posed by the site's environmental
history, and subsequent conversations between our attorneys regarding the meaning of "hindrance"
under the Act. Yet, DEQ did not waver from its initial position.
This project has great public benefit. It is in a qualified federal Opportunity Zone and has the support
of the Durham and Duke communities. The placement, design, and financial strategy (OZ investment
requirements) for this project were put together with the full anticipation of working within the
Brownfields Program. This expectation was based on well -established precedent of sites with similar
(in many cases almost identical) circumstances being accepted into and completing the brownfields
process. The length of this process and DEQ's ultimate decision not only excludes the project from a
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Bruce Nicholson
Sharon Eckard
November 23, 2021
Page 2
key component of our development plans, but also exacerbates the risks of the project that this Program
was designed to help abate.
DEQ's decision not to grant eligibility to this project is inconsistent with its previous decisions, and
we strongly object to the framework used by DEQ in reaching its decision and the length of time the
process has encompassed. However, after carefully weighing the costs (and the fact DEQ timing
continues to move at a pace that is unreasonably slow) and benefits of requesting a judicial
determination as to the meaning of "hindrance" under the Act, we have decided not to file a contested
case petition with the Office of Administrative Hearings and hereby withdraw our brownfields
application. Moving forward, however, we lack confidence in DEQ's consistency in applying the
standard against which projects are being measured on this and related topics. We encourage DEQ to
formalize its metrics for eligibility evaluations to help the development community accurately plan
for its engagement with the Program.
We appreciate the time and effort your staff put into conversation with our team about this project,
and we regret that we are not able to move forward. Please place a copy of this correspondence on
Laserfiche as public record of SLI's position, along with other relevant correspondence discussed
above.
Sincerely,
Bryan Kane
cc: Mary Katherine Stukes, Moore & Van Allen PLLC
Darin McClure, Mid -Atlantic Associates
Jay Osborne, NCDEQ
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